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.