American Airlines and JetBlue have been sued by the Department of Justice over their new alliance. The agency alleged that the alliance had resulted in increased prices and reduced choices for passengers traveling to and from major cities in the country's northeast region.

The DOJ antitrust lawsuit alleged that the two airlines used their "Northeast Alliance" to share information such as routes, schedules, and planes for flights out of four major airports in Boston and New York. This reportedly allowed them to dominate the northeastern region.

Acting Assistant Attorney General Richard A. Powers of the DOJ's Antitrust Division said that the consolidation had threatens the airline industry, which is already experiencing a critical shortage. Powers said the alliance will cost consumers hundreds of millions of dollars through higher fares and reduced choices.

American Airlines is currently the largest airline in the world. Along with United, Southwest, and Delta, the airlines control about 80% of the domestic travel market in the U.S., according to the DOJ. Before it decides to form an alliance with American, JetBlue had dominated a lot of the northeastern airports in the country.

The DOJ said that American and JetBlue are better off as fierce competitors rather than allies as it would be more beneficial for consumers. The DOJ added that the alliance has eliminated any incentive for the two companies to compete. In the suit, the agency alleged that the two companies had been sharing revenues earned from northeastern airports, while also pooling their gates and takeoff and landing authorizations.

American said in a statement that it "feels confident" that the DOJ case will not prosper as it lacks any evidence to prove that its alliance with JetBlue is harming consumers. JetBlue echoed the sentiment and added that it remains committed to providing customers with low fares.

JetBlue CEO Robin Hayes said the alliance is not like a merger and the two companies have completely different businesses models. He also denied that the two companies are working together on pricing fares within the northeastern region.

"It's also important that you have the full picture on benefits the [Northeast Alliance] is already delivering, and I want to reassure you that the DOJ's action will not affect our plans to continue implementing the [Northeast Alliance]," Hayes said.