Back in January I reported that United Airlines and JetBlue were in talks over a partnership. Today the two carriers made it official with a “Blue Sky” partnership that is frequent flyer linkup, slot trade, and long-game move in New York.

• Mileage earning and redemption: MileagePlus members will earn and redeem on “most” JetBlue flights; TrueBlue members get the same on United’s global network. Exact accrual rates and award pricing haven’t been announced.

• Elite reciprocity: Priority check-in, security, boarding; free checked bag for all elites; complimentary preferred/extra-legroom seats at check-in; same-day change and standby. No upgrades or lounge access at this point.

• Booking & technology: Each airline will sell the other’s flights on its own site under an interline (not codeshare) agreement. United will outsource hotels, cars, cruises and packages to JetBlue’s Paisly platform.

• Slot swap: JetBlue hands United up to 7 daily round-trip slots at JFK T6 starting “as early as 2027.” United gives JetBlue 8 timing slots at Newark in return, billed as a “net-neutral” exchange.

• Timing: Mileage reciprocity could go live as early as this fall, subject to DOT/DOJ approval.

This gives United re-entry into New York JFK, which disgraced former CEO Jeff Smisek walked away from – viewing the airline as losing money at that airport, and expecting customers to shift to Newark, and failing to anticipate that customers on the West Coast would shift broader business away from the carrier as a result. This adds a great deal of domestic heft to United’s MileagePlus domestic route network, and gives JetBlue United’s customer base to help feed its flights.

There’s no codeshare or joint venture. And there’s no announced plan for JetBlue to join Star Alliance – the carrier’s previous deal with American Airlines had included a plan to join oneworld.

This is a win for MileagePlus and JetBlue TrueBlue members and elites (except that JetBlue’s generous transatlantic award space will see a lot of new demand and may become harder to get). This is a huge loss for American Airlines, which needed their JetBlue partnership to compete at scale against United and Delta in New York. This takes a potential New York competitor in JetBlue off the board in some sense, furthering the Delta-United duopoly in the market.

We should see regulatory review ramp up this summer. A Trump administration – which had approved the much tighter collaboration between American and JetBlue, before the Biden administration reversed course – may be amenable. United has been a million dollar donor and public supporter even of tariffs which are bad for the economy broadly and for the airline industry in particular (though in a positive sign, struck down unanimously by judges on the International Trade Court).

At the earliest we’ll see reciprocal elite benefits and redemption go live late in the year, with potential announcements of closer collaboration next year and United’s re-entry into New York JFK in 2027. As I’ve reported, this is a deal in stages and more robust future stages could be announced as well.

United Airlines used to have a frequent flyer partnership domestically with Delta. This doesn’t really break new ground, isn’t a merger, and doesn’t dictate which airlines will fly where.

However it does drive further concentration in the New York market, and foreclose future competition. It also makes United a competitor to JetBlue at New York JFK, most likely in the transcon market. JetBlue will grow at Newark in exchange, and get a piece of United’s travel package sales business. The slot trade is called an even swap, but it isn’t. There’s no established market value for timings at Newark.

This isn’t great for competition overall, but the problem there is slots – which are government-granted subsidies to existing airlines, with the right to fly out of congested airports while excluding competition from other airlines. A solution that would be better for travelers (but that isn’t politically feasible because it wouldn’t entail subsidizing entrenched airline interests) would be congestion pricing that would allocate scarce airport access to flights providing the greatest value to consumers.

United’s stock is up, and JetBlue’s down, on this news.

Finally, this is notably a win and vindication for aviation source JonNYC who first reported on the partnership talks and caused United to issue a non-denial denial in the form of an SEC 8-K, which misleadingly only suggested they weren’t presently in talks about a merger while implying that the reporting (that didn’t actually specify merger) was false. It wasn’t.