JetBlue Faces Ridiculous Anti-Competitive Lawsuit

Filed Under: JetBlue

As much as I’m generally all for calling out airlines when they act in an anti-competitive manner, I don’t think this qualifies.

I wasn’t going to write about this, but the PR & crisis management firm for Fareportal has emailed me three times in the past 24 hours to bring this to my attention, so I guess they really want me to cover this. As they wish… šŸ˜‰ While I’m no lawyer, I’ll gladly share my take.

Fareportal suing JetBlue under antitrust laws

Fareportal, which is an online travel agency (OTA) that owns CheapOair, is suing JetBlue under federal antitrust laws. JetBlue has forced Fareportal to remove flight and pricing information from its websites.

Fareportal claims that this is a scheme by JetBlue to block consumers from being able to comparison shop JetBlue’s fares with those of other airlines. Fareportal has partnerships with over 600 airlines globally, allowing consumers to comparison shop flights.

The company argues that “JetBlue has acted with intent to illegally acquire, enhance, and maintain its monopoly over passenger air travel in the JetBlue Dominant City-Pair markets.” The company believes that JetBlue is trying to increase profits by doing this, and that JetBlue is funding thisĀ anti-competitive strategy using COVID-19 relief funds from taxpayers.

As Fareportal wrote in its lawsuit:

ā€œAmidst the turbulence of the global pandemic, JetBlue is quietly pursuing a scheme to make it harder for American consumers to save money when they book air travel. JetBlueā€™s goal is simple: to make it difficult for consumers to comparison shop when they want to fly.”

Now, it’s important to clarify that JetBlue is refusing Fareportal access to displaying its flights even if the company isn’t getting a commission. The airline simply doesn’t want the OTA to be able to display pricing for its flights.

Why JetBlue wants you to book direct

Airlines have largely come full circle with online travel agencies (OTAs). Back before the internet, airlines had high costs associated with ticketing, given that the entire process of booking an airline ticket was manual, and large commissions were paid.

Then OTAs started in the 1990s, and they were great for consumers, as they gave us the ability to easily compare ticket prices across airlines. Airlines even liked OTAs, since in many cases they lowered distribution costs for airlines compared to the old system.

However, in the past few years we’ve seen a reversal of this, and airlines have gone great lengths to get consumers to book direct:

  • Distribution costs are generally lower when consumers book direct through the carrier’s website rather than through an OTA
  • Much more importantly to airlines, their ability to customize the experience and generate ancillary revenue is much better when people book direct, whether we’re talking about premium seating options, pre-purchasing checked bags, partnership and loyalty program opportunities, etc.

We’ve seen a countless number of airlines renegotiate their contracts with OTAs, or even cut their agreements altogether. Generally speaking airlines are back in the driver’s seat (or captain’s seat, if you will) when it comes to the terms of these contracts.

Southwest is perhaps best known for not playing nice with OTAs. The carrier’s entire distribution model is built around consumers booking directly via Southwest’s website.

Is there merit to Fareportal’s argument?

JetBlue claims that Fareportal’s allegations are “frivolous and wholly without merit.” The airline says it’s common industry practice for airlines to choose where to sell their products, and that JetBlue is one of several major airlines not selling via Fareportal’s platforms. It’s also pointed out that JetBlue’s fares continue to display with more than 10 OTAs.

While I’m not a lawyer, logically I agree wholeheartedly with JetBlue’s defense, and I have to shake my head at Fareportal’s argument that JetBlue is trying to “illegally acquire” a monopoly here.

A few further thoughts:

  • Understandably Fareportal isn’t happy about JetBlue removing flights from its websites, but that’s JetBlue’s prerogative
  • As a consumer I absolutely love when airlines make it easy to comparison shop, but I also don’t think that’s something we’re entitled to, especially when the airlines have the option of providing their feed to third parties
  • Fareportal is looking out for itself here, and somehow trying to make this about government subsidies, being anti-consumer, etc.

JetBlue may very well regret not even having its fares display through certain OTAs. The airline is hoping that the number of people who will go directly to JetBlue’s website to look up fares will outweigh the amount of business lost as a result of fares not being displayed through certain OTAs. That’s a gamble, but it’s one the airline is entitled to make.

There would be merit to Fareportal’s argument if the airline were somehow doing the work to display JetBlue’s pricing, but the reality is that the airline relies on JetBlue to provide that information.

Bottom line

JetBlue has chosen to withdraw its fares from Fareportal’s websites. In general airlines are doing everything they can to get people to book direct, because it reduces their costs and allows them to maximize revenue opportunities.

While I sure do like comparison shopping, I don’t think we’re entitled to having every airline display fares through all OTAs, even if the airlines aren’t getting a commission. Somehow that seems to be what Fareportal wants, all while arguing that this is an attempt at creating an illegal monopoly.

Is it a consumer unfriendly move on JetBlue’s part? Yes. Is this illegal and an attempt at a monopoly? I’d say no…

Ultimately this lawsuit is probably a negotiating tactic on Fareportal’s website. Whether or not this accomplishes anything remains to be seen.

What do you make of this lawsuit against JetBlue?

Comments
  1. @Lucky I donā€™t think they can force them to remove fare and pricing information (see skiplagged). They can just stop them from receiving commission, correct?

    Fareportal would be free to allow consumers to comparison shop (since itā€™s so important to them) by displaying the fare information, although not receiving a commission.

  2. Comparison sites should be mandated to show other relevant factors (seat pitch, on-time-performance, included baggage and catering on longer flights) with the same prominence as the price.

    This is the only way to stop the race to the bottom by giving customers a true choice.

  3. Is there an issue with jetBlue (or other airlines for that matter) allowing some portals access to their fares but restrict access for others assuming that the others don’t pay for access. I’m asking. this as someone who has no idea how travel portals (such google work)

  4. Airlines have every right to determine how their product is distributed. They are free to pick and choose any, all, or no venndors to show their product. This is no different than Google Flights not showing Southwest fares. Travel agents had a cow when airlines eliminated commissions, but their complaint didnā€™t go anywhere. This one wonā€™t go anywhere either. Fareportal only filed the suit for publicity, which may enjoy some success. The merits of their suit will go nowhere.

  5. I would have thought they have a right to display the prices, just as you have right to publish credit card fees, hotel reviews, hotel prices etc… So I would be surprised if JetBlue could force them to remove such prices but I’m not a lawyer.

    Do they have the right though to sap all the prices from Jetblue using a simple link to their databases – that I assume is down to Jetblue’s discretion.

  6. While JetBlue would rather everyone book direct, not everyone knows up front that they want to fly JetBlue. The OTAs have power because they have eyeballs, and they have eyeballs because most people don’t start out saying “I want to fly United” or “I want to stay at Hilton” they say “I want/need to travel.”

    Airlines want control over how their flights are sold. There have been regulatory and legislative fights over this. Airlines have sought laws requiring OTAs to display information that the OTAs would then be legally obligated to buy from the airlines.

    Under current law JetBlue may prevails, but let’s leave aside what the law is or even whether consumers are helped or harmed for a moment and ask a broader question: what should the law be?

    Shouldn’t an OTA be able to *display information that is publicly available* on its website, a JetBlue schedule? Let’s not get to the question of whether the OTA should be legally able to sell a product (JetBlue flight) that the airline doesn’t want them to. Let’s just ask about displaying schedules which are available to anyone. It seems to me that we don’t want to restrain internet speech like that. JetBlue may own the planes, but they do not own *the information*.

  7. @ Gary Leff — I don’t disagree with the spirit of what you’re saying, but:
    a) Southwest has been restricting this information for years, so why is JetBlue being singled out here? Is Southwest being monopolistic? This represents a general direction for the industry, rather than something that JetBlue specifically is doing.
    Ib) The problem with “the information” when it comes to airline tickets is that it’s not like pricing is static. If a product consistently costs X amount, any website can publish that price. The problem, as I understand it, is that Farecompare being able to display prices is contingent upon the company having access to JetBlue’s feed. That requires being synched to JetBlue’s system, and it seems reasonable that JetBlue should be able to control what third parties get access to that.

    To be clear, I don’t necessarily think this change is smart on the part of airlines. I do think comparison shopping is important. But ultimately I think the airline has the right to make that business decision. I also think airlines that are more “full service” (particularly Southwest, and to some extent JetBlue) have been at a disadvantage with OTAs. Yes, their base fares are more, but they also give you more, and that often hasn’t been properly reflected.

    I can understand why Southwest wants nothing to do with OTAs, since the airline knows it’s rarely going to be the cheapest.

  8. @Lucky, This is a financial based lawsuit from Fairpoint which acquired CheapoAir years back & diluted it as a Website of value concentrating on building their brand. They filed the lawsuit so reduce their payouts to carriers in this stressed out times.

    Speaking as a person who has flown from TPA to PR over 1k times, I will state from a person who is very close to 1k transits from TPA to all destinations in PR over the years, that JetBlue has the best & most cost effective service to PR. To San Juan & Ponce. American, Delta, & others in compare to JetBlue to PR are a true joke. That stated, I do commend the Delta pilot whoā€™s skills skirted Hurricane Marie on the last flight off the Island during that devastating atmospheric event.

    In short, a funding capital firm wants to reduce their liabilities & kudos to JetBlue for holding the line.

    So sad for CheapOAir..

    $0.02 submitted

  9. I am not sure I agree with you. If I go to a travel agent, I would expect them to show me all of the options. If they choose to only show some, I do appreciate that is their right as a business, however, for the provider to refuse to allow them to show those fares, it does seem highly anti-competitive. This allows the airlines to only work with the companies they like, and in turn creates an oligopoly. If this were merely about JetBlue not offering them more favourable rates, I would say that they should absolutely have more discretion, however, if JetBlue is telling them that they can not offer the customer the same rates the customer can find for themselves on JetBlue’s website, I can not see how or why that should be legal, unless there is some specific reason that is harming JetBlue’s brand.

  10. I think the race to the bottom is plaid by customers. No matter the on time performance, the seat pitch, or amenities. It is a price driven industry. I know many of my friends don’t even know what airline they are flying until the day of departure.
    There are perks you can purchase if you value them. Yet, people complain they aren’t free. Ticket prices have declined throughout time, and are not keeping up with devaluation.

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