The United States' domestic airlines would rather team up than compete against each other. Whether it's called an alliance, a collaboration, a codeshare partnership, or an out-and-out merger, it all spells consolidation. And consolidation means consumers and even communities suffer, due to higher fares, fewer flights, and less competition.
Which is why it's so troubling that the US Department of Transportation just gave its blessing to JetBlue and United Airlines forming the Blue Sky collaboration. I publicly expressed concerns that the DOT's review of Blue Sky was too brief, too opaque, and too silent. Before all interested parties had the chance to weigh in with public comments, the Department quietly pulled out its rubber stamp and without so much as a press release allowed JetBlue to hook up with United.
Consider that in the last two years JetBlue also attempted a "Northeast Alliance" with American Airlines and a merger with Spirit (both were struck down by federal courts). JetBlue has clearly chosen to speed-date with its competitors rather than battle them over service and price. And as I noted here in 2023, the domestic airline industry hasn't been this concentrated in over 100 years. We now have only 11 scheduled passenger airlines, with the Big Four oligopoly of American, Delta, Southwest, and United controlling 80% of the market.
This consolidation has led to higher fares, worse service, airport hub closures, massive lay-offs, and more Americans faced with fewer flight frequencies and nonstops. And make no mistake: The United-JetBlue Blue Sky deal may not be a merger, but it will have the same negative effects for travelers, especially in New York and New Jersey, the country's largest airline market.
Short-term enticements
Airline consolidation often comes wrapped in pretty paper designed to appeal to passengers. But the long-term harms will far outweigh extra miles or one-stop online shopping.Consider that Blue Sky is promising the following for United and JetBlue customers:
- Melding loyalty programs so members can earn and use miles on each other's flights.
- Publishing reciprocal schedules on their websites and apps.
- Sharing customer benefits like priority boarding, same-day ticketing perks, and complimentary extra legroom seats.
- Consolidating United's ancillary travel products--hotels, car rentals, cruises, trip insurance--on JetBlue's Paisly travel website.
We've heard all this before. As I noted here in 2024 with "Airline Miles Programs Are Essentially Pyramid Schemes Now," that mileage you're chasing is increasingly unlikely enough to score those elusive trips and upgrades. And which would you rather have: a shiny app allowing you to access both JetBlue and United flights at once? Or JetBlue and United bashing each other's brains out on fares and outperforming each other on customer service?
The two Blue Sky members assert they will continue to "manage and price their networks independently," and United's fine print also goes to great lengths declaring Blue Sky is not a "legal partnership." But don't be fooled. They may not technically be directly selling each other's flights (which would invite Department of Justice scrutiny), but they're sharing the same dealership showroom. That makes them partners, not rivals.
Monopolies = bad for travelers
The most disturbing aspect of Blue Sky is both carriers will swap takeoff and landing slots at two of the world's busiest airports. United--which departed New York's Kennedy International Airport in 2015 and again in 2022--gets seven daily round-trip flights out of JFK while JetBlue gains access at Newark Liberty International Airport. Note that both JFK and Newark are what the Federal Aviation Administration deems "slot-controlled airports," meaning they're closed to new-entrants due to congestion. (JFK is permanently limited, while EWR is temporarily restrained.)
Therefore, United's collaboration with JetBlue is a chance to sneak back into JFK, the nation's premier international gateway, which United abandoned after acquiring its Newark hub via a merger with Continental. Due to JFK slot controls, this "merger-that-isn't-a-merger" is a path to circumventing FAA rules. And the FAA's parent agency--the DOT--apparently thinks that's okay.
What does this mean for the millions of air travelers in the greater New York City region? They'll be paying higher fares because older airlines (like United via Continental at Newark) were grandfathered FAA slots to fly at airports where newer low fare airlines like Allegiant, Avelo, Breeze, Frontier, and Spirit can't access as many of those slots.
That's the real reason United is partnering with JetBlue, not so they can share apps. United screwed up by pulling out of JFK and has now found a way to do what low fare airlines can't do—use JetBlue to magically secure seven precious slots at JFK when JFK's slots are technically unavailable. And it's not just New York: Blue Sky will weaken competition in other key markets as well, from Boston to Florida.
Airline fortress hubs squash competition and raise fares for those dependent on flying out of them. The bigger the monopoly, the better it is for the Big Three hub-and-spoke carriers--American, Delta, and United. Together they control 70% or more of total flights at nine airports nationwide, including United at Newark.
And according to the DOT, Newark also has the highest average domestic fares among all six greater New York City airports:
- Newburgh $136
- Islip $260
- LaGuardia $338
- White Plains $361
- NATIONAL AVERAGE $397
- JFK $417
- Newark $429
Break up airline monopolies
Far too many airlines would rather acquire than compete. That monopoly thinking has made air travel a mess in the United States. Let's hope the next consolidation faces greater scrutiny than the DOT just gave to United and JetBlue's deal. There's nothing blue about those skies.