American Airlines has announced a new partnership with JetBlue, adding to its recent partnership with Alaska Airlines. The carrier has pulled off a coup while no one is thinking of travel. Will it pay off?
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American Airlines Adds JetBlue Partnership
American Airlines this week announced a partnership with JetBlue. American will provide codeshares for JetBlue flights on over 100 American operated routes, and JetBlue will add 60 flights to American’s network. While details were scant, speculation is that the JetBlue codeshares will operate on routes where the two carriers do not compete. I am personally hoping for JetBlue routes from Pittsburgh like Boston, West Palm Beach, and Fort Lauderdale.
The two carriers haven’t announced loyalty program reciprocal access yet but alluded to it. It’s likely (again, speculation) that flights will collect miles and count toward status but not likely elite qualifying dollars. This could be an incorrect assumption, but since the two airlines won’t be sharing financial details to keep anti-trust regulators at bay, at most it would work something like the way that American applies an EQD equivalent to oneworld partners based on distance and class of service.
In addition, American Airlines announced flights from New York JFK (a JetBlue hub) to Athens, Tel Aviv and Rio de Janeiro. This is clearly an effort to allow JetBlue to sell-through to these in-demand destinations.
Alaska Airlines Expediting oneworld Membership
Alaska announced in February that the carrier would join oneworld. While the Seattle-based carrier had explored joining oneworld alliance as a “connect” member (with limited membership overlays), they abandoned those notions in favor of full-membership by mid-2021.
After announcing in February, COVID-19 descended on the industry and changed everything. The good news for Alaska is this downtime has allowed the airline to accelerate plans to join the alliance. Instead of mid-2021, the carrier now intends to become full oneworld members by the end of 2020. The carrier has already begun its partnership with American Airlines by codesharing flights and offering reciprocal benefits (not all, but some) to each other’s frequent flyers. Moving membership forward by six months is a dramatic acceleration and mostly unheard of in the industry.
Of the Majors, These Moves Are The Biggest
There have not been two members of the same alliance in the United States since US Airways merged with American Airlines but that was more an effect of the companies joining. Prior to that, US Airways was a Star Alliance member along with United Airlines. US Airways left Star Alliance in 2014.
Alaska Airlines essentially created its own alliance by partnering with carriers from all over the world and different alliances. The carrier also had a codeshare agreement with both American Airlines and Delta before going to war with the latter and slowly diminishing cross-shared involvement with the former.
Six months ago, every US carrier was more or less unaffiliated with each other and out for themselves. Since February (Alaska announced intentions to join oneworld as a full member) and now in July with the JetBlue announcement, three carriers are now somewhat aligned. While JetBlue won’t codeshare with Alaska (yet) nor join oneworld (yet), American Airlines now has significant market share in both the Northeast (JetBlue) and the west coast (Alaska) while filling seats on its expansive network. It also works for Alaska and JetBlue who have limited networks and would love to fill flights to the coasts from Chicago or Dallas by picking up passengers from smaller markets like Sioux City, Iowa (SUX – the best IATA airport code ever) or Jackson Hole, Wyoming.
American is also shifting some of its flights to more traditional Origin & Destination (O&D) markets. For example, Philadelphia to Tel Aviv or Athens was based on connecting traffic and lower costs from PHL rather than JFK where the carrier finds far greater competition and higher costs. American has pushed the launch (but will likely bring it back once COVID-19 flight restrictions expire) of Seattle to Bangalore, India.
The additions of JFK flights clearly supports JetBlue traffic while the Bangalore-Seattle leg will be helped by Alaska Airlines in Seattle for west coast connections but is also a strong O&D route due to the tech industry in both cities.
Both Alaska and JetBlue were the last two major carriers in the US that could offer such a partnership to a US flag carrier like American, Delta, and United. Southwest isn’t equipped for such partnerships (both because of technology and culture), Spirit like other ULCCs wouldn’t make sense for a partnership because its product doesn’t align closely enough with the majors. Frontier, for the same reason, would be a tough partner as would Allegiant who would also have a difficult time due to network choices. Hawaiian may still partner with Delta (United doubled down on flights to the islands when Southwest entered the market) but wouldn’t add a meaningful amount of flights to the other partner.
While the world is focusing its attention elsewhere, American Airlines will emerge from the coronavirus crisis with two very strong partners. As the market reshapes following COVID-19, American has pulled off a coup by partnering with the only two other carriers suitable, delivering relationships look to be beneficial to all partners in a fairly equal distribution.
American can now serve even more customers on international flights while Alaska and JetBlue can deliver value for customers who want to extend beyond the carrier’s networks without moving all of their flying throughout the year. American’s new network will be substantial without the expense of building all of the flights back. Further, Delta and United won’t likely be able to find similar partnerships based on who is left available.
I have been highly critical of American management in the past (for good reason) but the carrier’s moves lately have me reconsidering the airline.
What do you think? Did American pull off a stunning coup to build a better network through partnership in the US? Is this all smoke and mirrors? Could Southwest, United, and Delta find a way to do something similar?