JetBlue’s earnings call this morning was interesting, because in what appears to have been a strategically-timed release, American Airlines shared the night before that it had broken off partnership talks with the New York-based carrier and instead had filed a lawsuit against them.
We got some clues from today’s earnings call discussion about who JetBlue is going to partner with, and a couple of airlines have added their own commentary to the mix.
- Delta says it has no pending airline partnerships. That isn’t exactly a denial, but JetBlue makes it sounds like a partnership announcement is very close so it might as well be one. Besides, it’s hard to imagine JetBlue and Delta and New York JFK being allowed from an antitrust standpoint.
- Alaska says they are ‘focused on’ merger integration with Hawaiian. Alaska has been pulling back from cross-country flying, making the value to them of the partnership more limited, although they hinted in their earnings call that they’d delay their drive for merger synergies if the right opportunity came up. There has long been talk about building Alaska into a true national airline with West Coast and East Coast strength.
- United said only “We don’t engage in industry speculation” which is not true. They issued an SEC filing to comment on industry speculation about their doing a deal with JetBlue three months ago, and then their CEO fueled the speculation with comments he made last month.
CEO Joanna Geraghty said during the earnings call that,
- They’re in talks with multiple domestic airlines.
- They are very close to an announcement, which should come this quarter (so within the next two months).
- Their focus is connectivity with JetBlue, and more opportunities for members of their frequent flyer program. The new partnership will allow customers in the Northeast “to go to Omaha or Boise.”
- The partnership they announce will be bigger than what’s been expected. Their turnaround plan assumes a number for partnerships that’s smaller than what they have in the chute.
Southwest Airlines serves Boise and Omaha but I’ve assumed they just have too much on their plate to get a partnership done by June.
It would be a big deal for both carriers, but not nearly as big a deal as joining Star Alliance. JetBlue had been slated to join oneworld as part of its Northeast Alliance with American.
Alaska isn’t going to bring Northeast customers to Omaha or Boise. It seems like the partnership has to be United (and possibly Star Alliance) or Southwest, with United potentially more valuable to JetBlue. United wouldn’t connect to JetBlue at JFK airport necessarily (unless United got some slots there as part of the deal) but it would open up new destinations for JetBlue customers from Boston and New York LaGuardia (and elsewhere) as well as perhaps Star Alliance connectivity.
Southwest and JetBlue would be a tough combination but it could eventually work. Since it’s a partnership and not an acquisition, the two could have somewhat different cultures. Southwest looks like it is turning into more of a JetBlue except an important distinction of lacking first class.
JetBlue and Alaska would make sense. If it ever did combine, it should be named either Hawaiian or JetBlue. The Alaska name has no value except to people in Seattle and maybe Alaska, despite what the fat heads at Alaska Airlines think.
There will be a whole lot of UA fankids that will be disappointed if B6 and WN partner but that is realistically by far the most likely.
WN has a minimal presence in the NE (NYC and BOS) and thus presents zero antitrust issues compared to AA or UA.
WN serves the west and Hawaii well.
B6 and WN’s new product line are far more alike than B6 and any of the big 3.
and WN and B6 are both in need of partnerships and can make them work without cannibalizing the other – which is what would happen with B6-UA
UA might be denied a place at JFK for a little (or lot) longer.
WN might also benefit from having B6 start transatlantic/deep South America service from certain WN hubs like BWI using the A321LXR (or adding more to the B6 order for the type). Long-haul international is really missing from WN. Sounds like the WN customer service product is morphing more toward B6. There could be an opportunity to rationalize some B737 flying at WN will more appropriately sized A220 aircraft. The UA thing creates a problem between EWR/JFK for the New York Metro market. Not sure what B6 has that UA needs other than a way to be thorn to DL.
Partnering with Southwest could be a bad idea for JetBlue compared to Alaska or United. Southwest’s rampant cutting culture now under Elliott Management influence conflicts with JetBlue’s marketing of “best legroom in coach” which could tarnish JetBlue’s brand premium with economy customers. At the same time, the JetBlue Mint clientele is unlikely to be enthusiastic about the lack of first class and the “cattle car” culture on Southwest flights.
Add in to the mix JetBlue’s frequent operation and staffing issues and there could be a big mess (except now even bigger because JetBlue delays would impact routes nationwide due to Southwest’s point-to-point model and the need to accomodate delayed JetBlue passengers connecting through onto Southwest flights).
@ Tim — You are 100% wrong on this one and scared that Daddy DL is about to lose NYC and BOS ground to UA. This time DL won’t be protected by Trump, but suck-it-up Kirby will be.
Keep trying to convince yourself that somehow WN + B6 wouldn’t be a complete catastrophe. Maybe with DL and UA one equal footing after a UA+B6 deal, AA can marry WN in bankruptcy court. Delta can go it alone and see that no one stays on top forever. I’m sure they can ripoff some more SkyMiles holders to fill any gaps, or have they about tapped that out by now?
I highly suspect it’s JetBlue joining Star Alliance and code sharing with United. United will get some JFK slots out of the deal.
GetReal,
why would B6 let go of any slots that UA will turn around and use in markets that B6 already flies?
the reason why AA/B6 didn’t work was because there was too much overlap and not enough willingness for each side to “do the dirty work” of flying some routes that don’t make as much money.
WN doesn’t even serve JFK or EWR.
WN and B6 are LCCs. UA is not.
Despite the fixation with UA returning to JFK, government regulators will first and foremost want to see a combination that preserves and grows competition.
There is no way that any partnership between B6 and any of the big 3 will yield as much consumer benefit at the lowest negative impact as what B6/WN could offer.
Beyond Scott Kirby, there might be some people very disappointed if B6 chooses WN which is what I think will happen
Tim- B6 leadership has stated time and again that they want to global earn and burn for loyalty program.
Southwest is a shithole pax experience compared with B6.
If I were a Boston frequent flier of JetBlue, I would rather just give my business to Delta than be forced to fly on SWA if I wanted to get to San Antonio or Omaha.
Those are the customers JetBlue can ill afford to lose.
Southwest seats suck! Too narrow and pitch between seats too small. I STOPPED flying Southwest because of the seats and switched to Jet Blue cause seats at Jet Blue more comfortable and roomy. The only reason to Fly Southwest was the free baggage now that they’ve gotten rid of that there’s no reason to use them no TV no character to the plains you feel like you’re on a flying bus and Southwest pilots seem to fly rougher. They come down too fast when descending and The Landings are always rougher. I will not be happy if I book a JetBlue flight and they switch me to a Southwest plane.
This assumes people actually want to go to Omaha or Boise.
Pilot,
B6 has multiple airline partnerships including global earn and burn.
AS had the same thing before it became a oneworld member and still has multiple partnerships outside of oneworld.
B6/UA could work if it is simply a codeshare relationship with no slot swaps or revenue sharing. and B6 could be admitted to Star.
but I am pretty sure that UA is not interested in not being able to fly out of JFK on its own metal.
and, again, why would B6 develop a partnership with someone and provide slots to someone that is, without a doubt, going to fly in some of B6′ best markets?
no one can seem to separate themselves from UA’s lust list long enough to answer the question as to why any airline that is at JFK right now wants anything to do with UA including giving them slots.
WN might not be what it once was but neither is B6.
WN has virtually no antitrust concerns with B6. If AA and B6 got shot down, the chances are slim to zero for UA. and arguing that Kirby donated to Orange Man’s inauguration makes no sense given that DL – and other companies did too.
I know it is hard for some to accept but UA might be left on the outside looking in at JFK – and the consequences of walking away from JFK, regardless of who did them, might not fixable.
and let’s not forget that people have touted how great UA’s hub at EWR is – and yet – it was UA’s actions, again under another exec team – that underutilized the slots which led the FAA to revoke slot controls at EWR.
EWR is simply a two runway airport that is incapable of handling the amount of traffic that UA needs to push through it.
DL was smart enough to divide its hub over 2 NYC airports which is why it has 15% more flights from NYC than UA.
and UA has had to reduce schedules during EWR’s construction so there is a good chance that DL will surpass UA in boardings.
There are a lot of obvious synergies between B6 and WN, as they are both in the process of gutting formerly proud airlines.
It’s a natural fit.
Lots of airline nerds fixated on using acronyms here
@Rob: I laughed out loud.
Attorneys General in New York, Connecticut, Colorado, Illinois and Massachusetts are just waiting to sue United if they try something like taking over a big chunk of the American airline industry. They will probably file the case in Boston or DC.
Nah, it’s going to be JetBlue merging with Breeze and Silver.
It’s as sure a thing as the Sanders kid going on the first round of the NFL draft.
might be Frontier Airlines
AA trying to swallow JetBlue would have been a disaster even a few years ago, probably as awful US Air was, even without that AA will be fortunate if it avoids another, extremely messy and long-time journey through the Bankruptcy Chapters 11 and 7, before it’s finished maybe even Chapter 12, reorganizing Dairy Farms … mid-80’s, Herb told the story often, somebody showed up without an appointment, one version was Korean Air, some other Asian carrier wanting a toe-hold in the US, Herb realized what he was there for, started screaming: “I put SW together. (bunch of expletives deleted) don’t you think I can take it apart, into little bitty pieces?” Said the fella set a speed record running down the hall and out of the building. Problems with US law for a foreign carrier trying to buy SW, nobody messed with SW after that. But, with Elliott owing over 10%, still unthinkable.
It has been rumored that UA wants to be at JFK. An alliance with Jetblue would accomplish that.
UA has been in and out of JFK. They tried to make it work, it didn’t. AA and DL, and to some extent B6, ran them out of the transcon market. The best they could hope for is a codeshare deal with B6. The price to pay for a merger would be too high. They have a lock on EWR and would lose big in NYC if they went for a merger.