American Airlines has new partnerships coming online with JetBlue and Alaska Airlines. Normally we think of these sorts of partnerships as reducing competition, but there are two ways this will increase competition.
- Alaska and JetBlue are strong in places where American is weak. Combined they’ll be strong enough to be viable in markets like New York where Delta and United are bigger than either competitor separately. Alaska is already strong in Seattle, but lacks its own long haul route network.
- Alaska and JetBlue offer better inflight products than American Airlines on domestic and short haul routes. Customers can easily choose to fly JetBlue or Alaska instead of American on routes where there’s overlap or where flying either involves a connection. With coordinated codeshares, rather than metal-neutral revenue-sharing joint ventures, American still needs customers to fly its own metal. That means the partnership may spur American to improve its inflight product (or fall behind).
JetBlue offers a little more legroom, free internet and seat back TVs. American Airlines doesn’t even have a date for bringing back live TV streaming to customer devices, and they’ve just started a test of free Facebook messenger on a subset of their fleet. JetBlue’s business class (Mint) on domestic and short haul international is far superior to what American offers in seat, catering and service.
An @AlaskaAir flight attendant just moved her own bag out of an overhead bin to make room for a first class passenger's bag up front. That. Actually. Happened. In. Real. Life.
— gary leff (@garyleff) May 2, 2019
Alaska Airlines offers better domestic first class seats, better food up front, and friendlier service. And customers get more room too.
- An Alaska Airlines Boeing 737-800 has 159 seats.
- American Airlines is taking their 737-800s with 160 seats and adding 12 seats to them. Each customer gets less space on the aircraft.
JetBlue was in cost-cutting mode before the pandemic. It’s possible that the partnership brings everyone down to American’s product. But there’s no reason to expect that. What’s the mechanism that would encourage JetBlue to remove seat back video after 20 years?
I’m looking forward to the partnerships that will allow American Airlines AAdvantage elites to continue earning status while opting out of flying American’s new domestic ‘Oasis’ product. And if enough customers make that choice, American might reconsider key elements of the new domestic product which they were rumored to be doing a year and a half ago.