American Airlines and JetBlue this morning announced a partnership in the Northeast largely covering New York and Boston.
- This is codesharing. The airlines will place there codes on a set of each other’s flights.
- This creates a limited frequent flyer relationship. They’re touting frequent flyer benefits but there are no details yet. Since all they’re talking about at this point is codesharing it may just be reciprocal mileage-earning, and limited to flights booked with the airline’s own code (for instance, earn American AAdvantage miles on American-coded flights operated by JetBlue).
- It allows launch of new routes. American says it will launch New York JFK – Tel Aviv (taking advantage of El Al’s uncertain future in a similar fashion to what United already announced it is doing) as well as seasonal New York JFK – Athens, and seasonal New York JFK – Rio de Janeiro in winter 2021.
They’re careful to point out that JetBlue isn’t joining oneworld, isn’t joining the transatlantic joint venture American has with British Airways, Iberia, and Finnair, and plans to eventually fly to Europe on its own in other words no competition concerns to see here, regulators.
Strategically this is a strong move for the two carriers,
- Alaska Airlines and JetBlue both competed to buy Virgin America, they were looking to grow in congested airports. JetBlue partnering with American gives them greater network access.
- American and JetBlue had a partnership that ended once US Airways management took over the airline. During American’s bankruptcy there was speculation about JetBlue as a merger partner rather than US Airways.
- American partnering with Alaska (huge in the Pacific Northwest) and JetBlue (huge in the Northeast) addresses the two greatest areas of American Airlines weakness.
- And also by the way makes logical sense of JetBlue’s move from Long Beach to LAX (in addition to an expectation of a slightly less competitive environment there). The American-JetBlue partnership does not cover LAX at this point, and may not – Alaska is growing at LAX, announcing 8 new routes there from Florida to Hawaii and the Pacific Northwest.
The pandemic creates a huge opportunity for partnerships that pool traffic to pass regulatory muster, and making moves quickly (since betting markets strongly favor Democrats retaking the Presidency) helps as well. There’s no better regulatory climate in which to advance domestic airline partnerships. Of course mergers are harder, as airline cash is at a premium and stock prices universally depressed making it hard to use stock to fund an acquisition by a larger airline of a smaller one.
This new American Airlines-JetBlue partnership paints a path forward for American Airlines to grow and compete in New York, one of the key elements that has been missing from its strategy, including from its co-brand credit card strategy. It has the potential to make American Airlines more relevant to cardmembers in the financially-important New York market, just as the Alaska Airlines partnership can help in the Bay Area and Seattle where tech money is significant. Whether or not this succeeds comes down to execution and whether the partnerships grow to their potential.
I’m a bit bummed that my airport of choice, HPN, is not part of this deal.
Good news on the international routes . . . I will be using the GIG (wish they were starting sooner) and TLV flights all the time.
The AA TLV flight demonstrates how El Al crowds-out private carriers operating to Israel and why all concerned (save El Al’s overpaid employees) would be far better off with it going the way of Sabena, Olympic, and Malev, etc.
But I’m pretty dubious about the Jet Blue codeshares though. Seems to me just another reason for AA to justify its preferred role as a passive financial/branding company rather than an operational airline that moves passengers and stuff, and another excuse to let AA’s massive JFK investment sit fallow. Moreover, I’m envisioning AA;s traditional practice of imposing nonsensical fares on the code shares to earn AA miles, so that I can fly JFK-SEA for $149 on a Jet Blue ticket or $499 on an AA one. Since JetBlue will allow you to credit miles to SQ, earning AA miles won’t likely be worth the cost.
Didn’t they already do this in 2008 or so and then AA management told JetBlue to take a hike because they didn’t see it as a good return for AA?
Never mind I saw you mentioned it in the article.
I was thinking after the AK tie up if AA would go after JetBlue next. It makes perfect sense for both airlines and personally JetBlue should reconsider London now. Concentrate on the US (maybe a STL hub?) and let AA do the international flying until it recovers. I think this new AA management team is scrappy and making moves to straighten their network nicely. It’s makes AAdvantage the best program out there, especially when you look at the OneWorld partners. I could see AA and JetBlue merging someday, while AK makes sense to stay an alliance partner. I bet DL wishes they had not wasted money and routes on LATAM and the Virgins.
How is less competition on transcon good?
“JetBlue and American will offer customers more options on Transcon service from New York to the West Coast. American’s popular three-class service on the Airbus A321T will join JetBlue with its Mint premium experience and thoughtful core seating.”
I guess good more EWR competition to west coast but partnering at JFK doesn’t sound good for consumers who benefit from competitive fares and choice
@Gary,
This is going over like a fart in church on the American Airlines employee message boards, especially coming a day after announcing 25000 WARN notices. I usually try to stay away from the torches and pitchforks crowd until I have more information. Is there any way I’m not seeing that this might be a net positive for the employees of AA (obviously it helps the company)?
@gary what’s your opinion on AA joining the nyc-tlv party ? Do you think they’ll make a real effort there being that there’s so much competition on the route?
Or just typical AA leading from behind half hearted attempt
@Gary -, Do you think there is a possibility that could habe been the AA NYC strategy a long time in the making? JetBlue has been mentioned as a takeover candidate for a long time. That’s currently not allowed due to the government loans and cash problems. Candidate for a B6 takeover before Covid was UA. But that would have been difficult due to their EWR presence and not enough competition in NYC. Same problem with DL. So maybe AA weakend their position in NYC first to make it easier for a cooperation and a later takeover of B6. If D. P. has done anything in his life, than its mergers.
@Erik – I see this as an engine of growth for American, not outsourcing to JetBlue, *if this is done right* but I can see how American employees would be worried about their premium transcons.
@Gary , what do you make of what this means for the PHL transatlantic hub operation? Much of it obviously relies on AA-metal feed from around the country, although there is a base of PHL-originating business and leisure traffic.
With feed at JFK, do you see AA shifting more Europe flying to JFK from PHL, or are the economics/cost structures of the PHL hub something that still make it better positioned for connecting flows to Europe, with both current routes and future expansion?
@Tom – zero connectivity at HPN, not sure why it would…
@LAXFlyer – there’s more high yield originating traffic at JFK, but also more competition, and American is limited in how much it can grow based on its allocation of slots. They could eventually turn their domestic feed over to JFK and run an mostly international operation from there true, though big buildup in international is a long way off. For now we’re going to see just a little more transatlantic flying from JFK. Vasu Raja will probably be more aggressive than those before him, but Doug Parker has a long history of preferring to avoid competitive flying and preferring connections through Philadelphia.
@Gary, if I’m an Admirals Club member flying on JetBlue, am I allowed to visit the AC since JetBlue would now be considered an AA codeshare partner?
Although I’m guessing that only flights on JetBlue codeshare-specificities flights (not all) would be valid?
@VX_Flier – we just don’t know yet, for now best guess may be (at least initially) only if flying on an AA-coded flight. Although I’m guessing that JetBlue Mint flights will get access to the Admirals Club at LAX terminal 5
JetBlue has a phenomenal customer experience. Flying AA is torture. Codeshares are fine, but please Lord no acquisition of JetBlue by AA. If that happens I’d go Delta.
How about an Alaska / JetBlue merger? I’d applaud that one.