American Adds Ultra Low Cost Carrier Jetsmart As New South American Partner

American Airlines will partner with and invest in South American ultra low cost carrier Jetsmart, which is owned by the same parent company as Frontier Airlines and Europe’s Wizz Air. Jetsmart operates coach-only densely configured Airbus A320 narrowbody planes from Chile and Argentina, serving 33 destinations.

Indigo Partners, which owns Jetsmart, is led by Bill Franke – the CEO of America West before current American Airlines CEO Doug Parker. Parker served as CFO for six years under Franke.

After American Airlines lost its pending joint venture with South American mega-carrier to Delta, they’ve been working to piece together new partnerships. They quickly partnered with Brazil’s Gol, which Delta was forced to walk away from in order to do their LATAM deal.

JetSmart began operations in 2017, and expanded to Argentina with the acquisition of Norwegian Air Argentina just before the Covid-19 pandemic.

American is the largest US carrier to South America, and these partnerships help provide connecting traffic for American’s flights as well as additional destinations they can sell to customers.

AAdvantage members will be able to earn and redeem miles on Jetsmart flights. However earning will be paltry, and the value of redemptions will be too, as the carrier is home to sub-$20 fares. To be sure, more options are better than fewer options, but this partnership is nothing to be excited about.

After receiving approximately $10 billion in direct taxpayer subsidies during the pandemic, American Airlines has approximately $20 billion in liquidity and they’re on a spending spree. They announced a billion dollars of electric aircraft. Now they’re taking a new stake in a foreign airline. Congress included stipulations on executive compensation and stock buybacks, but there are loopholes that continue to allow state-backed airlines to freely spend taxpayer cash. Money is fungible!

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. So AA’s solution for intra-South American travel is to expect paid J business travelers to connect to a ULCC? Not good enough.

  2. Makes me wonder whether American is looking at WizzAir as a potential partner to plug the hole that MALEV left when it went under?

  3. Love this. The value of the mileage redemption is to get the long haul and connecting flight on the same ticket, not on redeeming separately for a Jetsmart seat. I’d live to have one through award ticket to Ushuaia (Antarctica) or Bariloche (wonderful skiing) for example,

  4. Exactly Dave.

    I go to Bariloche and I hate having to worry about my one hour connecting flight that has to be issued on a separate ticket costing me my business class ticket back to the US.

    Half the time I fly to the city on the day before just in case the regional flight is delayed or cancelled. I like the city, but I’d rather not cut my trip short by a day just to be sure I make the second flight.

    Not to mention the value in the fact that now I don’t have to take all of my gear and suitcase off of the plane for a few hours or overnight in Buenos Aires and then check it again on the longhaul flight.

    Plus we don’t have to pay extra bag fees now.

    Now that I can put them on 1 award, if something goes wrong with the connecting flight to Buenos Aires they still have to rebook me in biz without a penalty. And I don’t pay a bag fee for the short flight since I am technically still on a biz class ticket. This is huge for me.

  5. Gary,
    You messed up the headline. It should read: Jetsmart adds American as Ultra, ultra low rent North America partner.

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