At first blush it seems like United got the better deal in its partnership with JetBlue. JetBlue’s flights really don’t get United that much, and the airlines aren’t codesharing. United gets back into JFK – by gaining 7 takeoff and landing slots from JetBlue, and the carriers are exchanging a handful of flight times at Newark.
It might be hard to see why JetBlue chose United as a partner, and indeed JetBlue’s stock fell 3% on the day of the news while United’s shares were up. However, the deal makes sense when you read between the lines to what hasn’t been said about the partnership.
Brian Sumers interviewed JetBlue President Marty St. George and learned,
- JetBlue ran a beauty contest. They talked to everyone.
Over time, St. George called at least one executive from nearly every U.S. airline, reading from a script for each call, presumably to ensure he would not botch a talking point or run afoul of regulators. Amazingly, even Delta’s Glen Hauenstein — who probably has done more than anyone to thwart JetBlue’s ambitions in New York and Boston — was on St. George’s list. It even included low-cost airline executives, though an agreement with Spirit or Frontier was very unlikely.
- And they selected the best financial deal.
St. George said he had been agnostic about JetBlue’s counterparty. It all came down to money, he told me, or more specifically the net present value of each airline’s offer. He said Hauenstein was cordial (“I had a very nice conversation”), but ultimately the two finalists were American and United.
Interestingly, St. George also reveals to Sumers that they aren’t doing a codeshare because JetBlue doesn’t have the tech chops for it (!) and because United is running out of flight numbers.
[C]odeshares require a lot of back-end systems. “Codeshare also requires us to add some pretty significant infrastructure internally for things like pricing and inventory management, so that we can price all the United flights and make sure that the prices are competitive. We looked at this and said, ‘we’re going to get 90 percent of the benefit without all the brain damage.'”
The most important thing to understand about the deal is that all of the details haven’t been released, and many won’t be. They aren’t talking about contract terms. When JetBlue and American partnered, the plan was for JetBlue to join oneworld. This didn’t come out publicly until the antitrust trial. There were also financial formulas for revenue-sharing that weren’t public.
Similarly, we don’t know what cash may be changing hands for those JFK slots. At Newark they are trading flight times to ones that JetBlue says they like better. Maybe there’s not even cash directly being paid for JFK slots, but the deal includes several other components like JetBlue’s vacations package supporting United’s vacation sales. And JetBlue is signing onto United’s new digital ad platform. Perhaps United is offering revenue guarantees for access to advertising on JetBlue’s seat back screens?
The bottom-line is that United CEO Scott Kirby wound up the most motivated bidder.
- He had an opportunity to get his back into JFK airport. United walked away from it under disgraced former CEO Jeff Smisek, who thought JFK was a money-loser and customers would fly to Newark instead. That turned out to be wrong, but also JFK matters for the New York market and for its share of co-brand credit card spend in the most important spend market in the country.
- He also had an opportunity to stick it to his former employer, American, who fired him as President and CEO heir apparent. American needed the partnership to grow in New York, now they are shut out.
Put another way, Scott Kirby almost certainly overpaid. It was a classic winner’s curse scenario. All bidders here know what JetBlue’s assets are, but make different bets on what those will be worth in a partnership. The winner of JetBlue’s auction, then, was the bidder with the rosiest bet on that value, overestimating and overpaying. By winning the beauty contest JetBlue ran, United is ‘cursed’ either because they paid more in the partnership than the value of what they’re getting or because the partnership is worth less than they expected.
The only alternative is that Scott Kirby has a fundamentally different bet on the value than the rest of the industry, he’s right and everyone else is wrong.
I’m not willing to bet against Kirby. He seems to be a better business executive than most CEO’s, certainly all of the main US airline competition today.
Hopefully a little of the JetBlue magic (e.g. seatback entertainment that greets you by name and remembers where you left off in a movie) rubs off on United along the way.
well said, Gary.
Scott Kirby has been fixated on getting back into JFK not only to correct the mistake that his predecessor made in thinking that EWR was sufficient to serve NYC longhaul but also precisely because he wears a vendetta for AA which he will take to the grave.
The chaos at EWR for the past two months pushed the “need” for a deal to get back into JFK to a fever pitch even though UA inflicted much of the damage at EWR on itself by magnifying the ATC problems with Kirby’s incessant need to talk and try to blame the FAA – which is resulting in long-term reductions in the amount of flights that UA cap operate at EWR. And, no he did not get slot controls which is what he asked for. In a couple years, AA and DL could add flights from EWR to the west coast on their A321NEOs if they feel the least bit threatened by UA’s presence at JFK.
UA will get very little value from the loyalty partnership as much as some people think otherwise. AA and AS have had a much more developed partnership with codesharing and an alliance relationship and it has done next to nothing to help AA on the west coast. AA contributes very little traffic to AS’ operated flights.
the value is in the B6 vacation platform and the UA ad platforms – precisely the type of non-transportation revenue streams similar to what DL has done with its exclusive engine maintenance MRO contracts but DL’s are on a much larger scale. Still, B6 and UA are leveraging what they have.
and UA is not going to codeshare on B6 because their pilot contract does not allow it – and they are not going to fight to get a benefit that the pilots will almost certainly not approve.
7 flights/day at JFK is 1/20th of the domestic flights that DL has and nowhere near enough to threaten AA, B6 or DL in any market. B6 brilliantly played UA’s “need” to get back in JFK and offered a tiny fraction of what UA needs while enhancing B6′ loyalty program.
B6 won this and UA won’t begin to gain anywhere near the advantage that many people think.
EWR will be a smaller hub and UA lost an enormous amount of business to AA, B6 and DL over the past month plus and for much of the summer .
My bet is that UA has been making all the wrong bets recently. There’s a dark cloud ahead for the industry that Kirby has chosen to ignore.
I am scratching my head to see the real benefit for most UA status fliers. Seems minimal at best and mostly favors those with JetBlue status?
The ugly kid at the dance finally got a partner. Now at
The end of the night when the lights come on, Watch Out
Seriously Gary? The title says United overpaid in a secret deal. That got my attention. Then you go on to explain you have no idea what the terms were or what they paid, but it certainly has to be too much. Not one of your better articles.
According to Scott Kirby in the WSJ interview – Newark was the most on time NY area airport for the first 3 month of 2025. It was then thrown off mostly due to runway construction and the media reporting about ATC problems. But ATC problems indeed were reported in Atlanta and other airports as well.
New cables for backup radar in place soon, runway construction finished middle of June. With the reduced schedule in EWR – Newark might just be the best performing airport over the coming months. We will see. I’m sure EWR will be back to normal soon. And while EWR had the delays due to shortages and ATC problems – JFK reported immigration wait lines of up to 3 hours. Also not great. However with United coming into JFK:
More competition in JFK is good for the consumer.
@DA Pilit – the contract terms are kept secret, but to win United almost certainly had to overpay, this is accurate
The Port Authority of NYNJ just released April traffic statistics and they highlight how big of an issue the runway reconstruction project has been.
In April, DL overtook UA as the largest airline at the 3 airports with a 24.7% share compared to UA’s 24.1%. DL’s traffic was up less than 1% but UA’s was down 5.3%. AA’s was up 5.4% with a 12.6% share. B6 gave up over 10% of their region traffic.
At EWR, UA’s traffic was down 7% but ironically DL’s was up 7.5%. Most carriers had traffic decreases. DL’s EWR share was only 4.2% compared to 68% for UA. The airport as a whole was down 6.4% in traffic.
JFK traffic for all airlines was up just under 1% with DL’s share at almost 30% compared to B6 at 23% and AA at 12%.
LGA was the winner in all of it. Airport traffic was down less than 1% but AA, DL, UA and WN all had healthy increases with AA up almost 19% which was similar to UA’s increase. DL’s LGA share at 44% is well ahead of AA at 25.6%. The other LCCs and ULCCs all had large losses so LGA is becoming more concentrated in the hands of the big 4. WN is the 3rd largest airline at LGA but their share is 1/5th of DL’s.
B6 continues to be unable to post gains and AA has once again returned to the 3rd place position in NYC.
These moves will only grow in May and into June; based on Kirby’s comments about how UA is having to discount to get people back to EWR, the chances are high that AA and DL will have very strong summers at LGA and JFK.
This runway reconstruction project at EWR should have been a one-time low key reduction in traffic at EWR but it has and will result in a larger shift of traffic back to LGA and JFK and to AA and DL, the former of which Kirby was so determined to wound with the B6 announcement.
“JetBlue Talked To Every Airline—But United Overpaid In A Secret Deal To Win The Partnership”
You have NO idea if they “overpaid” – there is nothing “accurate” about this. What is the “secret deal” you reference? If you mean it is subject to an NDA, then of course it is “secret” but it isnt like you know of some secret and shady side deal (like the ones UA used to do!) that got this done – or at the very least you certainly have no details at all…
This whole story is just another chance to write about how Kirby got fired by AA, wants to be at JFK, and AA sucks. Same old drivel.
Thanks for this analysis. Feels spot on. Five years from now it may feel like overpaying initially to win the hand of a dance partner was a good strategy. But… it may also not be. Reality is B6 is a very unique and tricky dance partner and is just not set up to be completely synergistic with AA, UA, Spirit… anyone really.
And also highlights how much of an issue antiquated technology is – B6’s app is pretty bad. Maybe AI will save the day for all of this in a few years, and B6 is not the only one with bad tech (BA immediately comes to mind) but ultimately leisure travelers will put up with these things for one time a year trips to Florida/Caribbean.
Unclear whether consumer will really see any meaningful benefits from this initial arrangement, it barely seems to change the competitive landscape at all save the relaunch of a few United p.s. flights from JFK to SFO in a few years. Wonder whether T6 will just have a star alliance lounge that B6 will also get access to for mint – and that arrangement could be part of what B6 was playing for here (and could see that arrangement surviving even if B6/UA deal goes nowhere else or falls apart).
Peter,
see the data I posted above.
B6′ problem is that they continue to lose share and DL is now 30% larger than B6 at JFK – just 15 years ago, B6 was the largest airline at JFK.
UA is going to shrink at EWR; they are carrying some of the traffic at LGA that they cannot carry at EWR but it is very likely that AA and DL will be long-term beneficiaries of this poorly handled runway reconstruction project.
DL will likely retain its lead in NYC; UA had just a 0.3% size advantage over DL in March for the previous 12 months.
AA is the big winner; they, like DL, are going to work like no one’s business to keep the traffic they have gained and will gain this summer.
Bill,
EWR has trailed JFK and LGA in on-time performance for years – well before the runway reconstruction and ATC relocation project. EWR simply does not have the capacity to handle a hub the size that CO and UA have tried to operate. EWR is more susceptible to ATC delays in bad weather because the runways are so close together – far closer than in most hubs w/ parallel runways.
In fact, the biggest delay days since the runway reconstruction began have been when the crosswind runway became unavailable so EWR became a one runway airport. As much as UA execs would love to blame the FAA for the lengthy ATC delays, current ATC technology will mean that EWR will be harder impacted by bad weather than JFK. New generation satellite-based ATC systems might help EWR but it will also help all 3 NYC airports.
I came here for @Tim Dunn’s take, and I was not disappointed.
JFK is going to be very interesting once these major terminal upgrades (1 and 5,6,7) are finally completed (starting 2026, but some of it may take until 2030.) The more competition, the merrier for us consumers.
While some are upset with jetBlue, I’ve been consistently impressed with their Mint products, both the older a321 and the newer transatlantic varieties. Their food is the best among US carriers, too. IFE, WiFi, and more legroom in coach all also great. I’m with @jamesb2147, if any of those positives can rub off onto United, that’d be swell.
What is overpaid? If someone buys an EV charger for $10 but they don’t have an EV or plan to get one, they “overpaid” $10. If someone with an EV buys that same charger for $50, they likely didn’t overpay, because they will get value out of it. One party paid 5x the other, but the one that paid less is the one who overpaid. How American, delta, Alaska, etc. benefit from JetBlue is different and therefore the value of the partnership is different, as is the financial benefit to the counterparty.
It’s not just Kirby who said Corrupt Jeffy was a dolt for leaving JFK, UA execs before Kirby said the same thing.
This is a fantastic deal for UA. Ideally AS would be the one who crafted the deal with B6, because AS has no East Coast hub, but at the same time they don’t know what to do with their existing JFK slots at it is.
@Tim
Delta is clueless and their service sucks.
I do not understand the logic behind how EWR chose to handle the runway construction project. Many airports have elected to do the work overnight and on Saturdays to reduce overall impact on airfield operations. Especially true of single runway airports. Takes longer, costs more in the short-term, but had less impact on operations.
What am I missing?
“You know nothing, @Johnny Snow.”
The only reason to take B6 is because of Mint. It’s a fantastic product that serves many locations with a flat bed where a legacy carrier has standard first class. Take that away and you have… a leisure airline that has myriad operational and on-time performance struggles, albeit one with a little bit more legroom in coach and free wi-fi. And T6 may be a selling point a few years from now, but that’s a few years from now, and T5 currently is just kind of sad. If it can leverage UA for a few years, even in a small way, make some headway on its operational issues, and hang on for a few years until T6 opens, it is possible that it could position itself come ’27-’28 to begin to win back customers. In the meantime, DL will continue to solidify its NYC position, and AA has a golden opportunity here to grow as B6 muddles along and UA deals with both the reality of EWR as well as the perception of the reality of EWR.
Who is the arbiter of who “overpays” for something?
@Peter — Other than the aging Admirals Club at JFK T8 (you know the one, after taking ‘the tunnel’ to the far side, near Gate 42), I’d say American Airlines is doing ‘just fine’ if not ‘pretty good’ in the NYC-area. Between the glorious Chelsea and Soho lounges, and the new Admirals Clubs at LGA Terminal B and EWR Terminal A, AA’s airside experience in the region is *chef’s kiss* (as for planes, amenities, IFE, Wifi, food, routes, profitability, etc., well, that’s for better or worse… bah!)
If B6 does not start to make money soon, this’ll just be phase one of the real end game for UA getting back fully to JFK. In addition to expanding in Boston, and South Florida. DOJ or not, 6+ years of not making money means the clock is ticking.
You only need half of a brain to know if B6 selected its new partner based purely on financial terms, UA had paid more financially than any of its competitors to get B6’s nod because this partnership doesn’t really offer B6 much else, and because Kirby really wants it more and is willing and able to pay more than Isom.
Johhny,
You make it easy to find the UA fans a mile away.
The data comes right from the PANYNJ.
Tony,
the fact that AA and DL already have plenty of JFK slots is also a pretty strong clue to the fact that UA was the only one that had any reason to pay much.
I do wish the conversation between B6 and DL was made public.
Most of my colleagues in Brooklyn are super excited, they are over Delta’s terrible transcon product but use it because of JFK lol so they are excited to move to UA when the LAX flights launch. I imagine there’ll be plenty of others feeling similarly about AA/DL. This is going to hurt everyone at JFK.
So we are supposed to trust Fatty’s article and feckless prose without actual facts or data over the CEO running the largest and most profitable US airline last quarter? Hmmm…
Holy cow! Here we have the host talking about a “secret deal”, but not that secret because he knows about it. Go figure how he knows.
Then we have the typical Timmyboy with his typical Delta crap. Screaming and kicking because his beloved DAL will have to face Kirby at JFK.
In the meantime, the stock market is speaking loud and clear. Since May 15th, UAL up almost 4% and DAL down almost 4%.
Timmyboy I’ve been telling you for more than a year now. You’re pretty stupid when you think your ranting here can have an impact on stock prices. When I started telling you, UAL stock was just 2 dollars above DAL’s. Today the difference is more than 30. You ain`t learning Timmyboy.
Positives of the deal:
JB’s loyalty program members are not gonna book DL or AA for international flights because they’ll earn miles with UA. Therefore, UA international loads get a boost and JB rewards program gets much better and they can compete more effectively with DL. In case someone doesn’t know, 3 out of 5 New York flyers are members of JB loyalty program. It is a BIG DEAL.
The UA return to JFK is certainly a positive but not that big deal. It might sound so today with all the problems at Newark, but these problems are just a temporary problem. Newark is running pretty smoothly now.
I guess Gary and Timmyboy are not happy because the big losers are DL, first and foremost, and AA. That’s for sure. DL and AA are gonna lose international bookings and JB is gonna be a much stronger competitor for DL in NY and Boston.
lejeune,
the trash of the internet surfaces when they are forced to admit that someone else has figured out what they (in this case you) do not know.
JB’s execs verified exactly what Gary said which is that UA paid the most for the privilege of partnering w/ B6. AA and DL did not need to seek JFK slots.
I said all along that B6 would not give away slots to UA to allow UA to compete in B6′ top markets which are the transcons.
UA MIGHT get slots in two years for SEVEN FLIGHTS – not near enough to be competitive with AA, DL and B6 unless UA uses them ALL for SFO.
this delusional nature about what UA will accomplish is purely wishful thinking.
AA has had a much more advanced relationship with AS for years and gets next to no benefit. UA will get nowhere near the benefit that people here dream about.
Marco.
UAL is still worth just 80% Of DAL’s market cap.
and UAL’s earnings will fall dramatically as it has to start paying its people industry comparable wages including what could be up to $750 million in retro for its FAs.
And that is before they deal w/ the mechanics – and whatever the ground workers decided to push for.
and the data which I JUST POSTED show that DL has taken the lead in NYC and is not likely to lose it because EWR will not be allowed to be as large of an operation for UA as it was before Kirby had his childish temper tantrum and blamed the FAA for the disastrous at EWR which was a predictable runway reconstruction project, bad weather, and UA’s overscheduling of EWR.
AA and DL are picking up hundreds of millions of revenue that UA is losing at EWR.
Anyone that looks at real data cannot state that UA is winning or will win anything.
It is DL and to a lesser extent AA that are cleaning up from the long-term shrinkage of UA’s EWR hub.
Kid, I know you are a delta sycophant as if it were a religion, but you need to reread the original article and what I posted as you don’t seem to grasp what Fatty wrote that is unsubstantiated versus the non-sequitur feckless drivel you also posted. Again, let’s all trust the CEO running this year’s largest and most profitable U.S. airlines and not the guy from AMTRAK maybe….
B6 is a shell of its former self – used to be innovative and disruptive. Now, like T5 JFK, B6 is just sad… I rarely book them… Will take DL or AA anyday for reliability. But, TBH, the partnership with UA is a positive for me – I will take a second look at B6 now b/c I am lifetime gold on UA, so I can get free bags and extra legroom (tho, as many have pointed out, not at booking). The real loser here is AA – who is stuck in neutral in the NYC market – they’ve been cutting flights from JFK for years and their overall product (Oasis interior, anyone?) is horrible.
@ Tim — The biggest losers here are Delta and American. United will leave Delt in the dust.
LeJeune
the truth clearly hurts and you and other UA fankiddos are fighting desperately to prevent that reality from sinking in.
UA has underpaid its employees for years relative to the compensation. Their labor costs will be increasing and they will be paying the better part of a billion in retro to their FAs. It is not a surprise that they have been able to tout their profitability.
And in the real world going forward, UA’s hub at EWR will be smaller. Kirby’s temper tantrum and blame game ensured that the DOT would take action to end the overscheduling that has been going on for decades at the CO/UA EWR hub.
BK1K
And because of his diarrhea of the mouth, Kirby scared thousands of passengers per day aware from EWR and into AA and DL’s hands at LGA and JFK. AA and DL will have very good financial results for NYC which is esp. notable for AA which has not only struggled to find its footing in NYC but on which Kirby has been hellbent in landing a fatal blow. The cruel irony is that UA’s handling of what should have been a routine runway rebuilding project has sent hundreds of millions of dollars into AA’s coffers.
and DL is now the largest airline in NYC and that will likely not change.
Kirby handed DL 1/4 of LGA’s slots for a paltry $60 million to DL when he negotiated the DL-US slot swap.
Now, he has bungled a runway redevelopment project at EWR, UA’s largest hub, which will result in a share shift from UA at EWR to AA and DL at LGA and JFK.
7 little UA flights to the west coast in 2 years won’t begin to make up for the revenue losses that UA will face in NYC.
Gary is right.
B6 won big time in this negotiation. UA overpaid in desperation of getting left behind.
@ Tim — You are the only one here that sounds desparate.
Desperate. 🙂
Data is pretty clear that DLs NYC strategy has worked out better for it than UA’s has.
10 years ago, UA had a 2% share advantage to DL and carried 10% more passengers.
Fast forward to 2025 and, even before the EWR runway fiasco, UA’s share advantage had fallen to just 0.3% and that advantage has been now lost.
DL is now the largest carrier in NYC. Their strategy of split hubs worked better than UAs single EWR hub which many touted as the best.
Timmyboy there is a difference between an opinion and a lie. Yours are not opinions, but plain lies.
The cost of the new labor contracts has always been in the books at United through accruals. Kirby and the CFO have talked about it several times in their presentations and you should know it. The back pay is very common in the industry and is always accounted for as a one-time item with no impact on future earnings.
As to Newark, of course the problems have had an impact but that impact is not gonna last. Construction of the runway will finish on June 15th and the number of flights per hour will go up to 68 and very likely to 77 again at the beginning of July when the new fiber optics cable testing finishes. The impact is just for the current summer. You should also know this because is public information from the FAA. Newark was the best ontime airport in the area the first 3 months of the year and will probably return to be it in July.
Your problem Timmyboy is that you don’t get tired of losing money betting on DAL against UAL and you’re getting desperate.
@ MARCO — Timmy just can’t stand that UAL stock is up 50% in the past 12 months, while DAL’s is down 5%.In his world, that is all that matters. It’s obvious to most everyone in the market, except Tim, that DAL is heading down while UAL is on the rise.
@Andy — On transcon (JFK/EWR to LAX/SFO), you do realize that there are already four good options in NYC for premium:
Delta from JFK T4 (yes, mostly older 757 and 763, but some newer 764 with the DeltaOne suites, all with access to the new DeltaOne lounge, on departure and arrival, and a new DeltaOne at LAX, and still a decent SkyClub at SFO, so yeah, still very much ‘worth it’)
American from JFK T8 (a321T, aging, but still good, First 1-1, Business 2-2, access to the incredible Soho, Chelsea lounges at T8, Flagship at LAX, Admirals Club at SFO)
United from EWR Terminal C (787 1-2-1 Polaris, 757 in 2-2 lie-flat), and only access to UnitedClubs at EWR, SFO, LAX, not Polaris lounges, sadly. I’d say that’s a major downgrade for lounges, and the older 757s are ‘not great.’
Finally, jetBlue’s Mint from JFK T5, usually the older a321 with 2-2 and 1-1 ‘throne’ seats, lie-flat; but, no lounges (not even with this partnership, sadly). Onboard experience is nice (good food, IFE). But, again, without any lounges, kinda a missed opportunity.
I’d still choose Delta because of the premium lounges, then American or United, and finally B6.
I feel a hidden agenda to the Pact is entry into the Star Alliance for B6 which UA has an override veto as a founding member.
From what I understand, the soon to be finished JFK Terminal 6:
– will be directly connected to T5 (JetBlue terminal)
– populated with several Euro Star members (Luft, Swiss, Austrian)
– populated with at least one Asian Star member (All Nippon)
– allow B6 to provide domestic thru service for the above Star members (incremental revenue)
– allow UA to provide West Coast thru service from its gate(s) at T5 (premium revenue)
– allow B6 to continue with its current Euro footprint without offending T6 Star members (no turf wars)
– expand Star Alliance coverage to Florida & Caribbean via B6 (expanded coverage)
– allow TrueBlue to cross pollinate with Star Alliance world wide (enhanced FF status for B6 members)
I read somewhere (I wish I could pinpoint the article), that Lufthansa was consulted prior to the UA pact with B6. For Mr Kirby to consult with The Fatherland prior to the announcement implies more than the original announcement with B6.
Waiting for Chapter 2 to unfold!!
Can I add one more point to the JFK list above:
– allow premium Star members to use the soon to be completed JetBlue lounge at JFK
The hidden agenda also allows B6 to provide the above Star Alliance service at BOS as well:
– domestic thru service
– access to B6 BOS lounge
– maintain B6 Euro service without stepping on the toes of Euro Star members
– Florida & Caribbean coverage
– enhanced BOS TrueBlue status via FF access to Star Alliance
Again, waiting for Chapter 2 to unfold at BOS as well!!
exit row,
It always made sense for B6 to be part of Star as part of this deal but Marty St. George of B6 specifically said they have other partnerships – likely earn and burn relationships with non-alliance carriers – that do not allow them to be part of an alliance.
AS is now part of oneworld but has multiple relationships outside of the alliance so it can be done but, at some point, the benefit to B6 of being part of an alliance has to be more than all of the relationships it has separately.
and it is also possible that oneworld is being more lenient with AS than Star would like to be with B6.
the terminal 6 argument is probably the most likely. It was/is a B6 project and they want to maximize what they can get out of it.
but the value to UA is still going to be substantially less than what AA has with AS via codesharing – which UA pilots do not allow.
marco and gene,
you two can carry on and try to act like UA is the winner here but:
1. UA’s costs will go up as it resolves labor disputes. They have low-balled offer after offer with its labor groups; they have not included the full value of all of those labor costs in either their accruals or earnings estimates whether you or they want to believe it or not. and companies cannot throw in one-time costs into earnings estimates unless they declare them as such; UA will incur at least $500 million in retro pay- what AA paid its FAs – and likely much more.
2. EWR is and will be a smaller hub for UA; DL has overtaken UA as the largest carrier in NYC and that will not change. EWR is not returning to the same capacity – the DOT Sec’y said so; the physical capacity of EWR is not being improved from before construction and UA’s overscheduling IS what caused years of delays.
and competitively, all of the construction at JFK will allow DL to gain more gates at T4 and bring in its own alliance partners.
in BOS, the terminal connector between A and B will allow DL to take over increasingly large numbers of gates in Terminal B – AA is not and will not be able to use the number of gates it has.
and there is still the potential for DL to do further construction at BOS to grow.
DL is the largest airline at BOS and JFK and neither they or AA or B6 will be impacted by seven UA flights from JFK if they ever start – which will be nowhere near enough to be competitive
@ Tim — You claim that DL has overtakes UA in NYC and “that will not change”. Bullshit.
Gene,
math may not be your strong point but UA had a 0.3% share advantage on a rolling 12 month basis until April which did not even mark the beginning of the complete runway shutdown.
DL’s lead is 06% for April.
EWR will not return to the same number of flights it had even before the runway construction; the DOT has already said that.
Yes, it is safe to say that DL will permanently take the leadership position in NYC.
And UA will upgauge – but so too can every other carrier.
UA saw this coming and is trying to bulk up IAD in order to refocus EWR on local traffic – problem is that DL does the same thing w/ its LGA and JFK hubs.
I know it is hard for you and others to admit but UA’s single airport hub strategy in NYC is NOT superior to DL’s (and AA’s) two hub NYC strategy. EWR was simply never capable of handling the traffic that UA pushed through it.
Past tense. Pushed.
UA had a 15 year run as the largest airline in NYC.
@ Tim — Why do you have these delusions that every DL advantage is “permanent”? Help is available…
@ Tim — You seem to forget that within the next 3 years or so, UA will likely control most of B6’s slots in NYC. And, no, the federal government won’t stop them. Poor Timmy…
Gene,
you DREAM that UA will control most of B6 slots. It is just a dream.
You and other UA fan brats somehow think the DOJ will ditch decades of attempts to maintain consolidation esp. in NYC so UA can make up for its strategic mistakes.
Hold your breath if you’d like.
and for now and into the future, DL has the capacity at its LGA and JFK hubs to be the largest carrier – which UA used to be via its EWR hub – which will be smaller than it was.
Tough weekend for you processing that reality, I know.
@ Tim — Yes, Delta will forever lead United by 0.00001% (in some random metric that suits your needs for that day’s rambling delusions). Oh, except stock price growth.
UA will close the gap on DL over the next year or so as it continues to upgauge EWR and adds back capacity that has been pulled down as a result of the runway project. Many of UA’s schedule cuts went into place at the turn of the IATA season in March, so April numbers are already reflecting what was about a 10-15% schedule cut. Data that can be extrapolated from DOT reporting shows that UA has a higher-margin and higher-yielding operation at EWR than Delta’s split JFK/LGA hub, so I don’t think United is in a panic mode over the future of its NYC operation, even amidst the current runway project (the catalyst for the issues) that is about 3 days from concluding.
In terms of “overpaying,” maybe so, but compared to what? Obviously, to UA, there is substantial commercial value to regaining a JFK foothold, and Kirby is absolutely willing to pay for it. Delta doesn’t need to pay a premium for JetBlue’s JFK slots and AA can’t figure out how to effectively use the slots it has. So yes, JetBlue is probably of greater value to UA than it is to DL or AA, simply because JetBlue has more of what United wants… so they paid for it.
Is that an overpay? Maybe not in the classical sense. I certainly do not view this as a negative for UA, and by no means should DL or especially AA be gloating over this deal. It makes United an instant, viable competitor in the JFK transcons. At SFO, UA is the dominant player, so everyone has something to lose now that the biggest fish is back in at JFK. As for the LAX origin, United has passed AA in share and is a fraction behind Delta, so it’s more relevant in that market now than in 2015 when Delta was pouring money into its ascendancy there and LAX was still important to AA. United is already the biggest transcon carrier even without current JFK service.
To that end… it’s not going to be just 7 JFK flights. The times exchanged will be peak slots that UA presently cannot touch on the open market. UA is already accumulating a portfolio of slots from other sources to add to this critical mass and re-enter the transcon market with a viable schedule, unlike 2022.
In sum, the headline is not wrong. But it’s an overpay for assets from which United will, barring major macro changes, generate an outsized return… and that’s Kirby’s calculus.