The big business jet, which Maduro reportedly used as his version of “Air Force One,” was flown by American officials from the Dominican Republic to Fort Lauderdale, Florida.

“This morning, the Justice Department seized an aircraft we allege was illegally purchased for $13 million through a shell company and smuggled out of the United States for use by Nicolás Maduro and his cronies,” Attorney General Merrick Garland said in a DOJ news release on Monday. 

DOJ said the plane was bought from an unnamed South Florida company. It is registered as T7-ESPRT, which is under the registry of the tiny landlocked country of San Marino, which is an independent state surrounded entirely by Italy in the northeastern area of the country. Registration data was not available from the San Marino authority. 

San Marino allows anyone from a “non-blacklisted country” to register an aircraft as long as they have a resident agent in the tiny country.

Editor’s Note: This article first appeared on AVweb.

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A DOJ news release alleges Nader was arrested Tuesday in California for exporting the parts, including components used on military aircraft, to Iran in violation of U.S. economic sanctions and other federal laws. 

The indictment alleges that, beginning in 2023, Nader and other associates conspired to purchase and illegally export four types of aircraft components totaling nearly three dozen individual pieces from the U.S. to Iran. The release states that some of these components are used on military aircraft operated by Iran’s armed forces, including the F-4 fighter jet.

After allegedly receiving purchase orders from customers in Iran, the indictment claims Nader coordinated to buy the parts with business associates in Iran. Nader and his Iran-based associates would allegedly reach out to U.S.-based suppliers of these parts. 

The release states in several instances that Nader falsely identified himself and his company, California-based Pro Aero Capital, to the U.S.-based suppliers as the end user of the items. No additional information could be found regarding Pro Aero Capital, though a search of Nader’s LinkedIn profile shows his association with “Pro Aero Parts Inc.” The business’ Long Beach, California, location is listed as “permanently closed” on Google Maps.

After obtaining the parts, the indictment alleges he attempted to export the items on several occasions to the United Arab Emirates. The items were then to be shipped to the ultimate customer in Iran. These items, however, were detained by a special agent with the Department of Commerce, and none were successfully exported from the U.S.

“This action demonstrates the Justice Department’s commitment to keeping military-grade equipment out of the hands of the Iranian regime,” said Assistant Attorney General Matthew Olsen of the Justice Department’s National Security Division. “We will aggressively investigate, disrupt, and hold accountable criminal networks that supply sensitive technology to hostile and repressive governments in contravention of U.S. sanctions.” 

DOJ said the FBI Washington Field Office and the Commerce Department’s Bureau of Industry and Security is investigating the case, with assistance provided by the FBI Los Angeles Field Office.

The case is being prosecuted by Assistant U.S. Attorney Steven Wasserman for the District of Columbia and Trial Attorney Sean Heiden of the National Security Division’s Counterintelligence and Export Control Section. 

The release stated that this prosecution is being coordinated through the Disruptive Technology Strike Force, an interagency law enforcement unit co-led by the departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nations.

“Iran has no business using U.S.-manufactured parts and components to keep their planes and drones in the sky,” said Matthew Axelrod, assistant secretary for export enforcement at the Commerce Department’s Bureau of Industry and Security, said in the statement. “Stopping these items before they get to our adversaries—like we did here—reflects the real-world impact we’re having through the Disruptive Technology Strike Force.”

The post California Man Indicted for Illegally Exporting Aircraft Parts to Iran appeared first on FLYING Magazine.

According to the DOJ, Boeing has agreed to plead guilty to a criminal fraud charge after the government determined the aerospace manufacturer had violated an agreement that protected it from prosecution.

Last week federal prosecutors gave Boeing a choice between entering a guilty plea and paying a fine or facing trial on the felony charge of conspiracy to defraud the U.S.

• READ MORE: DOJ Presents Boeing With Plea Deal in 737 Max Crash Cases

Federal prosecutors allege that Boeing misled regulators about the flight control system known as the Maneuvering Characteristics Augmentation System (MCAS), which was ostensibly designed as a flight stabilization feature on the 737. 

MCAS was implicated in the crash of Lion Air Flight 610 in Indonesia in October 2018 and the crash of Ethiopian Airlines Flight 302 in March 2019. In both events the aircraft entered unrecoverable dives shortly after takeoff.

The DOJ accused Boeing of deceiving the FAA to push through certification of the 737 Max despite concerns about the software connected to the flight controls and the additional training required for pilots who flew the airplane.

“We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department,” Boeing told FLYING, adding, “subject to the memorialization and approval of specific terms.”

The plea deal must be approved by a federal judge before it takes effect. It calls for Boeing to pay an additional fine of $243.6 million, which is the same amount the company paid in 2021 in the original settlement that the DOJ says the company breached, as it did not improve its safety and quality control processes.

• READ MORE: Boeing Crash Victim Families Seek $24.8B Fine From Company

The company maintained this had been achieved, then in January a Boeing 737 flown by Alaska Airlines lost a door plug midflight. The preliminary investigation by the National Transportation Safety Board (NTSB) revealed the door plug had been installed without four bolts designed to keep it in place.

As previously reported by FLYING, since the incident Boeing maintains that it has taken steps to improve quality control and safety culture at its manufacturing facilities, and the company is working with the FAA to improve communication and oversight.

According to Mark Lindquist, an aviation and personal injury attorney who represented several victim families in the two 737 Max 8 crashes as well as multiple passengers in the Alaska door plug blowout, Boeing had no choice but to accept the plea deal.

• READ MORE: FAA Head Vows Increase in Boeing Oversight

“Boeing’s guilty plea was inevitable,” Lindquist said. “Boeing can stall and postpone accountability, but justice has a way of catching up to defendants. While many of us would have preferred a more vigorous prosecution, a guilty plea to a felony is a serious step up in accountability from the initial deferred prosecution agreement with the Department of Justice.”

Lindquist noted that the families of the victims will be asking the judge not to accept the plea deal in its current form. One of the criticisms put forth by members of the victims’ families during congressional testimony and national media interviews is that Boeing has been fined before, yet the problems still persist.

“More than five years after 346 people died in two preventable crashes, it’s high time for Boeing to accept full responsibility, resolve pending cases, reform its culture, and rebuild,” said Lindquist. “Justice and accountability are important, but it’s also important to victim families—and the nation—that Boeing no longer sacrifices safety for profits. Next steps for the company should include accepting full responsibility in the civil cases filed by victim families. Many of us would like to see Boeing refocus on quality and return to its former greatness…

“A trial would have aired out all of Boeing’s negligence, misconduct, and dirty laundry. Additionally, the evidence was overwhelming. Therefore, Boeing had little choice but to plead guilty.”

The latest DOJ plea deal also requires Boeing to invest at least $455 million into its safety and compliance programs.

FLYING reached out to the DOJ but requests for comment were not returned by press time.

This is a developing story.

The post Boeing to Plead Guilty in DOJ 737 Max Crash Cases appeared first on FLYING Magazine.

The crashes—Lion Air Flight 610 in October 2018, and Ethiopian Airlines Flight 302 in March 2019—killed 346 people.

In January 2021, Boeing entered into a $2.5 billion settlement to avoid prosecution on a charge of fraud for misleading federal regulators who approved the aircraft for operations. On Tuesday, DOJ officials told a federal judge that Boeing had failed to make safety changes called for in the agreement.

The crashes were blamed in part on the aircraft’s maneuvering characteristics augmentation system (MCAS), a new automated flight control system. The pilots had not been informed that the system had been installed on the aircraft nor were they trained on its use. Shortly after takeoff, the MCAS activated and pushed the nose of the jet down in an unrecoverable dive.

• READ MORE: NTSB, Ethiopian Investigators Clash Over 737 Max Accident Report

After the second crash, the FAA ordered an immediate grounding of the 737 Max. 

During the investigation, Boeing downplayed the role of the MCAS, then later blamed two employees for misleading the FAA on the MCAS prior to certification.

During negotiations, the government agreed not to prosecute the aerospace manufacturer on a charge of defrauding the United States by deceiving authorities about the flight system. The agreement shielding Boeing from prosecution was contingent on the company developing and implementing policies and programs to improve its safety culture, quality assurance, and compliance programs.  

According to the Seattle Times, the settlement also included a $243.6 million fine, $500 million fund for victim compensation, and nearly $1.8 billion to airlines whose Max jets were grounded for nearly two years.

• READ MORE: Alaska Airlines Grounds 737 Max Fleet Following Explosive Decompression

Boeing was given three years to develop and apply the programs and had to prove it had made the changes. The deadline was the second week of January—days after a midair blowout of a door plug on Alaska Airlines Flight 1282, a Boeing 737-9 Max. No one was seriously hurt in that event, although several lawsuits have been filed on behalf of the passengers.

“We can confirm that we received a communication…from the Justice Department, stating that the department has made a determination that we have not met our obligations under our 2021 deferred prosecution agreement, and requesting the company’s response,” a spokesperson for Boeing told FLYING. “We believe that we have honored the terms of that agreement and look forward to the opportunity to respond to the department on this issue. As we do so, we will engage with the department with the utmost transparency, as we have throughout the entire term of the agreement, including in response to their questions following the Alaska Airlines 1282 accident.”

Meanwhile, family members of the 346 crash victims are hoping Tuesday’s development will open the door for prosecution against Boeing.

Boeing has until June 13 to respond to the government’s allegation, at which time the Justice Department will decide if prosecution should be pursued.

The post DOJ Accuses Boeing of Violating 737 Max Crash Agreement appeared first on FLYING Magazine.

According to statistics from Correctional Service Canada (CSC), obtained by the Canadian Broadcasting Corp. via a pair of access-to-information requests (the Canadian analog to the U.S. Freedom of Information Act), a single Ontario prison saw nearly 100 drones deliver drugs, weapons, cell phones, and other contraband to inmates in 2022.

Just five years ago, the same facility, Collins Bay Institution in Kingston, recorded just 10 such deliveries. But between 2018 and 2022, there were at least 247 recorded incidents, resulting in several major busts in recent years.

According to a CSC summary, there were roughly 600 drug-related and 250 weapons seizures at Collins Bay between January 1, 2020, and December 31, 2022. The summary said incident reports suggested “most contraband introduced into the institution” was via drone, adding that a single illegal delivery could net $100,000 in institutional value when seized.

But the worsening situation at Collins Bay is illustrative of a larger trend—one that has garnered the attention of Canadian prison authorities and correctional officers’ unions alike.

Interestingly, CSC data and correctional officer testimony point to significantly less illegal drone activity at the prisons surrounding Collins Bay. But several UCCO members claim drone deliveries of dangerous substances and weapons are becoming routine at prisons nationwide.

In just the past few months, Canadian law enforcement have suspected or discovered drones delivering contraband to facilities in Drumheller, Warkworth, Mission, Donnacona, and more. And those are just the flights authorities know of, causing experts and correctional officers to question whether CSC’s figures are underreported.

“To me, it’s an emergency,” said Jeff Wilkins, national president for the Union of Canadian Correctional Officers (UCCO).

According to a CSC chart provided to the UCCO, there were nearly 700 drone-related incidents in Canadian prisons between March 2020 and February 2022—the true number is likely higher.

Chris Bucholtz, UCCO’s Ontario regional president, added that the situation at Collins Bay in particular is “out of control” and more severe than it appears on the surface. And it’s not just the officers who are affected by these drone drops. Usually, he said, deliveries of drugs lead to upticks in violence, such as a 2015 fight at an Ohio prison. Overdoses may also rise after deliveries.

According to another regional president, right now about three-quarters of drug seizures in Canadian prisons can be attributed to drones.

So, what’s being done about it? According to the UCCO, not enough. In 2019, CSC pledged to spend $6 million Canadian dollars (about $4.5 million) on radar-based drone detection equipment at six facilities. Those installations were scheduled to be complete by March 2022.

Citing security concerns, CSC declined to tell the CBC how many facilities are using the technology. But so far, only one prison—Donnacona Institution in Quebec—has begun testing it, according to UCCO national vice president Frederick Lebeau. Corrections officers at Donnacona claim drones make two to three drops per day there.

One challenge in installing counter-drone measures at prisons is the rapidly advancing pace of drone technology. Per Lebeau, it can take a long time for prisons to procure, install, and test these systems, which gives criminals time to come up with creative work-arounds. Some facilities, meanwhile, simply don’t have the budget or financial support needed to install such systems.

A similar problem is arising in the U.S. Since 2022, major drone contraband busts have taken place at prisons in Texas, Ohio, Kansas, South Carolina, California, and elsewhere. 

According to 2020 data from the U.S. Federal Bureau of Prisons (BOP), there were just 57 drone-related incidents reported in 2019, though that represented a 50 percent rise year over year. The Department of Justice, meanwhile, reported 170 such incidents between 2015 and 2019.

Those numbers sound manageable—but there are a few caveats. For example, the BOP did not have a formal reporting policy for drone activity until 2018, the year before incident reports spiked. Another issue: Drone detection technology was not widely implemented between 2015 and 2019, tasking visual observers with spotting aircraft that often fly hundreds of feet in the air.

In short, the figures provided by federal agencies are likely significantly lower than the real numbers—a fact the BOP has admitted.

And in the U.S., preventing these deliveries may be tougher than in Canada. Several solutions—from jamming radio frequencies near prisons to counter-drone surveillance such as radar or cameras—have been proposed. But there is a gargantuan patchwork of U.S. laws around surveillance, security, and privacy that greatly inhibits what prisons can legally do to combat them.

According to the BOP’s 2020 audit, several correctional institutions nationwide have requested counter-drone technology such as radar. It’s difficult to say, though, how widespread the technology is. FLYING reached out to several prisons, but they were reluctant to share that information out of fear that drone smugglers might see it too.

The post Single Canadian Prison Sees Nearly 100 Illegal Drone Deliveries in 2022 appeared first on FLYING Magazine.

According to information supplied by the U.S. Attorney’s Office, a plea agreement and a one-count information charging Jacob, 29, of Lompoc, California, was filed Wednesday in U.S. District Court in Los Angeles. Jacob agreed to plead guilty to one count of destruction and concealment with the intent to obstruct a federal investigation. The crime carries a statutory maximum sentence of 20 years in federal prison. Jacob is expected to make his initial court appearance in a few weeks.

• READ MORE: FAA Investigates Former Olympian

According to court documents, Jacob, a YouTube personality described as an experienced pilot and skydiver, obtained a sponsorship from a manufacturer of a wallet. Jacob agreed to promote the company’s wallet in a YouTube video that he would post. Most of Jacob’s videos show athletic activities and garner about a thousand hits a day. The 13-minute video “I Crashed My Airplane” was uploaded to YouTube on December 23, 2021, and includes a promotion for the wallet. The video, which is still up on YouTube, has accumulated more than 3.1 million views.

In the plea agreement Jacob admitted he faked the engine failure in order to make the video. He also admitted lying to an FAA aviation safety inspector when he said the airplane’s engine had quit and, because he could not identify any safe landing options, he had parachuted out of the airplane.

The FAA revoked Jacob’s pilot certificate in April 2022.

Suspicious Details

As FLYING previously reported, on November 24, 2021, Jacob took off from Lompoc City Airport (KLPC) in his recently purchased Taylorcraft BL-65. According to multiple reports in local newspapers, the aircraft needed maintenance, and there is some question as to whether the aircraft was airworthy. Jacob did not obtain a ferry permit before the flight.

At first Jacob claimed the purpose of the flight was to travel to Mammoth Lakes (KMMH) to go snowboarding. He had outfitted the aircraft with multiple cameras—some were mounted inside the cockpit, others attached to the wings. Approximately 35 minutes into the flight when the aircraft was over the Los Padres National Forest north of Los Angeles, the engine “quit,” and Jacob, wearing a sport parachute, bailed out of the aircraft.

The video is edited to show Jacob’s reaction to loss of engine power, and although there is a camera mounted inside the cockpit that faces the panel, there are no shots showing the position of the throttle or mixture knobs, or the position of the magneto switch at the time of the power loss or after.

The video then switches to a view of the cockpit from the left wing, then the tail of the aircraft, then back to inside the cockpit. Jacob has a handheld camera mounted on a selfie stick that he grabs before he bails out. As he falls away from the aircraft, he keeps the camera pointed on his face.

• READ MORE: FAA Pulls Pilot Certificate of YouTuber for Intentional Airplane Crash

The video was posted to YouTube on December 23, 2021. Immediately it drew the attention of the aviation community and it was copied, shared, and scrutinized by millions of viewers.

Aviation professionals and law enforcement were immediately suspicious the event was staged. It was pointed out Jacob was wearing a sport parachute, something not normally worn by pilots on cross-country flights. As Jacob records himself hiking out of the brush after the bailout he talks about the benefits of wearing a parachute, stating he always wears one when he flies. However, a search of his other flying videos on YouTube contradicts this.

Investigators also noted that when the engine loss happened in the distance there can be seen a flat open area where Jacob could have ostensibly attempted an emergency landing instead of jumping from the aircraft. Also, there appears to be a significant amount of fuel in the header tank of the aircraft, as shown by the tube fuel gauge atop the cowling, and a freeze-frame of Jacob’s separation from the aircraft shows a cylindrical object strapped to his left calf—under his pant leg—that has the same dimensions as a fire extinguisher, a piece of equipment usually not carried as part of a pilot’s personal gear.

In the plea agreement, Jacob stated that after he touched down he hiked to the wreckage location and recovered the data containing the video recording of his flight and crash.

On November 26, 2021, four days after the event, Jacob informed the National Transportation Safety Board (NTSB) about the crash. Although the NTSB does not normally investigate unscheduled off-airport landings of vintage light aircraft unless there is a failure of a flight-control system, damage to something other than the aircraft in excess of $25,000, or serious injuries as the result of the accident, the agency made an exception in this case. The agency informed Jacob the crash was under investigation and that he was responsible for preserving the wreckage so it could be examined.

Three days later, the FAA launched its own investigation into whether Jacob violated FAR 91.13—careless and reckless operation of aircraft—and was flying an unairworthy aircraft without a ferry permit.

According to the plea deal, Jacob agreed to provide both the coordinates of the downed plane and videos of the crash to the NTSB. However, in the weeks following the crash, Jacob told investigators he did not know the location of the wreckage. This was a lie, according to the plea agreement, because on December 10 Jacob and a friend flew a helicopter to the wreckage site and retrieved the airplane. It was airlifted to Rancho Sisquoc in Santa Barbara County, where it was loaded onto a trailer attached to Jacob’s pickup truck and hauled back to KLPC.

The wreckage was placed in a hangar, and over the course of the next few days Jacob cut the airplane into smaller pieces that he then deposited into trash bins at the airport and other places. Jacob admitted this was “done with the intent to obstruct federal authorities from investigating the November 24 plane crash.”

The post YouTube Pilot Pleads Guilty to Federal Charge After Crashing Airplane appeared first on FLYING Magazine.

Shapour Moinian, 67, of San Diego, pleaded guilty in federal court Thursday to charges related to acting as an agent for a foreign government, selling aviation-related information that belonged to the U.S.-based defense contractor he worked for, and making false statements.

The DOJ did not identify the contractor.

“Moinian was a paid agent of the Chinese government who sold American aviation-related technology,” Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division said in a statement. “The Department of Justice has no tolerance for those who help foreign governments break the law to undermine American competitiveness and innovation.”

According to federal officials, Moinian’s Army service began in 1977. He left the service in 2000 and began working for defense contractors in the U.S. that were cleared for work on projects involving classified information.

It was while working for a cleared defense contractor that he was approached by a representative of the Chinese government claiming to be a technical recruiter who offered him an opportunity as an aviation consultant in China, the DOJ said.

According to the DOJ, Moinian traveled to Hong Kong in March 2017 and met with the recruiter, agreeing to sell materials and information regarding multiple types of aircraft designed in the U.S. During the meeting, he was paid between $7,000 and $10,000 for the information.

Moinian then returned to the U.S. and placed the proprietary information on a thumb drive. Months after the initial meeting—in September 2017—Moinian took another international trip. During a stopover in Shanghai, he gave the thumb drive to a Chinese government official. He then arranged to receive payment for the transaction through his stepdaughter’s bank account in South Korea.

“Moinian told his stepdaughter that these funds were payment for his consulting work overseas and instructed her to transfer the funds to him in multiple transactions,” the DOJ said.

In 2018, during a trip to Bali and before taking a new job with another defense contractor, Moinian met with the same contacts. That same year, Chinese officials again transferred thousands of dollars to the stepdaughter’s South Korean bank account, which she then wired to him in multiple transactions, the DOJ said. 

In 2019, he traveled to Hong Kong to meet with the contacts. During that trip, however, they paid him $22,000 in cash.

“Moinian and his wife smuggled this cash back into the United States,” the DOJ said. “According to his plea agreement, Moinian also admitted that he lied on his government background questionnaires in July 2017 and March 2020, when he falsely stated that did not have any close or continuing contacts with foreign nationals and that no foreign national had offered him a job.”

According to FBI officials, the case illustrates the lengths China will go to in obtaining proprietary information from the U.S. to boost its defense capabilities, as well as its use of social media as a means of identifying a potential mark.

“The People’s Republic of China remains determined to acquire our information and technology,” Alan E. Kohler Jr., assistant director of the FBI’s Counterintelligence Division, said in a statement. “In this case, we witnessed a former U.S. government employee acting as an agent of the government of China and Chinese intelligence officers’ extensive use of social media to identify willing targets.”

Moinian is scheduled to be sentenced in federal court on August 29.

“This defendant took the aviation materials of his American employers and sold them to China,” said Randy Grossman, U.S. Attorney for the Southern District of California. “This conduct was an outrageous breach of trust by a former member of the U.S. military. The United States will aggressively investigate and prosecute anyone who works at the direction of foreign governments to steal American technology and intellectual property.”

The post Ex-U.S. Army Pilot Pleads Guilty To Selling Secrets to China appeared first on FLYING Magazine.

Per Judge Cave’s warrant that found cause for seizure and forfeiture, authorities will now attempt to seize a Boeing 787-8 Dreamliner and a Gulfstream G650ER owned and controlled by Abramovich. Together, the jets are estimated to be worth $400 million.

The Boeing (pictured below), bearing tail number P4-BDL and manufacturer serial number 37306, is believed to be worth approximately $350 million pic.twitter.com/Y4bK3Vch0m

— US Attorney SDNY (@SDNYnews) June 6, 2022

The Gulfstream (pictured below), bearing tail number LX-RAY and manufacturer serial number 6417, is believed to be worth approximately $60 million pic.twitter.com/Op74ZRrif8

— US Attorney SDNY (@SDNYnews) June 6, 2022

In a statement announcing the warrant, U.S. Attorney Damian Williams said it demonstrates the Southern District’s commitment to enforcing the sanctions resulting from Russia’s illegal war actions.

“Our international partners—nations devoted to the rule of law—far outnumber those jurisdictions where these aircraft can safely hide. Our investigation of illegal exports violating U.S. law will continue unabated.”

Introducing Task Force KleptoCapture 

To seize the sanction items, the DOJ will rely on its Task Force KleptoCapture, established in March to enforce the sanctions against Russian oligarchs. At the time, Attorney General Merrick B. Garland said the interagency law enforcement task force would focus on implementing the sweeping sanctions, export restrictions, and economic countermeasures that the United States, allies, and partners have imposed in response to Russia’s unprovoked military invasion of Ukraine.

“The Justice Department will use all of its authorities to seize the assets of individuals and entities who violate these sanctions,” Attorney General Garland said. The task force is staffed with prosecutors, agents, analysts, and professional staff across the department who are experts in sanctions and export control enforcement, anti-corruption, asset forfeiture, anti-money laundering, tax enforcement, national security investigations, and foreign evidence collection. 

Moreover, Task Force KleptoCapture will complement the work of other international transatlantic task forces launched in the European Commission, among other places, with the mission of identifying and seizing the assets of sanctioned individuals and companies around the world. 

Focus on Seizing the Jets

According to the DOJ, Abromavich’s 787 is now located in the United Arab Emirates, while the Gulfstream is in Russia. They are operated through a series of shell companies in Cyprus, the Bailiwick of Jersey, an island state off the coast of France, and the British Virgin Islands. Task Force director Michael Driscoll said the potential seizures represented one way the U.S. government hopes to hold Russia accountable. These recent warrants were just the beginning of others to come.

Separately, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) also initiated proceedings against Abramovich in which it will seek penalties up to twice the value of the Boeing and the Gulfstream.

The post DOJ Issues Warrant To Seize Two Abramovich Jets Over Russia Sanctions appeared first on FLYING Magazine.

This means the DOJ will have its day in court against the two airlines come September 26, when they seek to have the companies unwind their Northeast Alliance, which the DOJ has said is anticompetitive. 

The alliance operates at four major airports:

• Logan International Airport in Boston (KBOS)
• John F. Kennedy International Airport (KJFK) and LaGuardia Airport (KLGA) in New York
• Newark Liberty International Airport in New Jersey (KEWR). 

Though the Department of Transportation approved the alliance in January 2021, antitrust regulators sued in September, saying American and JetBlue entered into an “unprecedented and anticompetitive pact,” and instead labeled it a “de facto merger.”

In a two-page order, Judge Sorokin said the concerns the DOJ and the attorney general brought up were valid enough to go to trial.

“The complaint alleges—plausibly and in a manner that is neither conclusory nor threadbare—that the alliance at issue between American and JetBlue is likely to harm competition in the relevant markets and that American and JetBlue control a significant share in an already concentrated market,” Judge Sorokin said in his order.

In February, JetBlue and American said the DOJ needed to prove that the alliance was harming consumer choice and that the DOJ was withholding evidence against them from its investigation. The DOJ responded that it had only begun the discovery process and would provide evidence as things proceeded.

JetBlue’s Other Focus 

Between now and September, JetBlue will have its hands full. The company has launched an unrelenting campaign to acquire Spirit Airlines (NYSE: SAVE), which Spirit has rebuffed. For its part, Spirit also cites the DOJ case against JetBlue as to why a combination between them would attract similar antitrust scrutiny. Instead, Spirit would prefer to merge with Frontier (NASDAQ: ULCC), which announced plans to acquire Spirit in February before JetBlue entered the negotiations.

After JetBlue sweetened its offer to Spirit shareholders this week with an extra $150 million, Spirit delayed its vote on the Frontier merger, which would’ve taken place Friday, to June 30.

The post Judge Refuses To Dismiss DOJ’s Antitrust Suit Against JetBlue and American Airlines appeared first on FLYING Magazine.