After days of speculation, Reuters confirmed from “multiple sources” that United Airlines and JetBlue Airways are in talks over a partnership, however, the extent of that relationship is anything but clear. I have a few theories, though.
JetBlue And United In Advanced Partnership Talks
Let’s first return to United’s February denial of a merger with JetBlue. At the time, the carrier said:
It has come to the Company’s attention that there may be rumors spreading among certain of our investors regarding United’s involvement in a potential strategic transaction with another airline. The Company is not in negotiations or discussions with any other airline regarding a merger, acquisition or similar strategic transaction and has not been in any recent discussions with any airlines regarding the same. As indicated by United’s strong earnings results and outlook provided on January 21, 2025, the Company has great momentum and a bright future ahead.
While United denied it was in talks for a merger or acquisition, it did not deny that it was in talks with another carrier about a partnership of some kind.
Now “multiple sources” claim JetBlue and United are in advanced discussions over a limited but strategic partnership:
- It is “quite different” from the Northeast Alliance JetBlue had with American Airlines
- The two carriers will not coordinate on schedules and pricing
- There will be reciprocal frequent flyer mile benefits
This comes after JetBlue President Marty St. George was asked about a domestic partnership yesterday and said:
“I need to make sure I reserve my comments based on what we have said publicly. And what we have said is we are looking at and we’re talking to multiple airlines about domestic partnerships. I think we’re getting very close to making an announcement and expect to make the announcement this quarter. And as far as the benefits that we expect to offer to our customers, now the most important thing is number one, a significantly higher network opportunity for earn and burn of TrueBlue points, which we think greatly improves utility of TrueBlue.
“Today, if you are a customer in the Northeast and you love JetBlue for leisure, but, you know, twice a year, you have to go to Omaha or Boise, these are places that you can’t earn through Blue points on now. And when this partnership goes forward, you will be able to. And the second thing is I’m really excited for just the overall broadening of the network opportunities, you know, not just connectivity, but also just sort of better opportunities for our customers to fly more places with more frequency.”
On that basis, I see this playing out in three possible ways.
Scenario #1: A Partnership Like Emirates
United and Emirates have a loose relationship whereby MileagePlus members traveling on United between Newark (EWR) and Dubai (DXB) can earn miles for connecting flights on Emirates. Furthermore, MileagePlus members can redeem miles on Emirates flights on select routes between Dubai (DXB) and Africa, the Middle East, and the South Asian Subcontinent as part of an award reservation that includes a United flight between Newark (EWR) and Dubai (DXB) all on the same ticket.
I can imagine a scenario where United may allow MileagePlus earning or redemptions (and vice versa on True Blue) in cases where passengers book a connecting itinerary that includes both United and JetBlue segments.
United also has a limited codesharing relationship, which appears will not be present at this time with JetBlue.
Scenario #2: JetBlue Joins Star Alliance
We might see JetBlue join the Star Alliance network, which (at first glance) would hurt United more than help because it might incentivize Star Alliance flyers to connect in New York (JFK) and Boston (BOS) on JetBlue versus Newark (EWR) or Washington (IAD) on United.
However, United may feel that locking JetBlue into Star Alliance would at least prevent JetBlue from partnering with American Airlines, Southwest Airlines, or Alaska Airlines (the latter of which, to me, makes the most sense of all, considering the almost wholly complementary route networks).
Scenario #3: United Taking The Steady Wins The Race Approach
Even under the Trump Administration, a merger of JetBlue and United would (arguably dangerously) concentrate power at United in New York City. Rather than an outright merger or acquisition, we could see United play the long game. First, a reciprocal frequent flyer partnership. Second, codesharing and alliance. Third, perhaps many years down the line, an acquisition.
As far-fetched as that may sound, I’m having trouble understanding what benefit a reciprocal frequent flyer relationship alone is to United…does it really want MileagePlus members flying JetBlue instead of United?
CONCLUSION
It seems “official” that JetBlue and United are exploring a partnership, though both carriers have been tight-lipped about the ongoing discussions. I find a limited partnership hard to understand unless it is an action aimed at preventing other partnerships or laying the groundwork for a deeper partnership in the years to come. What is United offering that American Airlines did not?
Any other theories as to what United’s motive would be behind this limited partnership?
None of this really makes sense. Reciprocal frequent flyer benefits won’t save Jet Blue or greatly benefit United in any way (except to keep them from the arms of their competitor AA). If this actually happens, it will be another excellent example of how antitrust laws harm consumers and do nothing to foment real competition.
thank you for the intelligent and nuanced approach to these discussions.
The target is AA. Scott Kirby has had AA in his crosshairs for 7 years since he got dissed for leadership at AA.
AA and UA were both strategic messes; Kirby contributed to many of AA’s bad strategic decisions including the DL-US DCA/LGA slot deal.
UA walked away from JFK and misused slots at EWR so the FAA removed slot controls at EWR.
Kirby has done as much as he can in NYC w/o access to JFK.
Yes, he is probably taking the long approach and that is to take out AA and get those slots.
AA could have and should have come up w/ a non-JV deal w/ B6 but they clearly screwed up as they have w/ so many other strategies.
If B6 leases slots to UA, they cannot dictate where UA uses them; that is illegal.
B6/UA will likely have a non-slot swap partnership not unlike what AA and AS have; Kirby has proven he learns everything he knows strategically from other companies, mostly DL. UA just might copy the AA-AS relationship and make it work including Star membership.
and then you have to go toward the endgame. UA might end up back at JFK on its own metal.
AA is still a strategic basketcase and financially not viable. they still have a lot of things that DL could use.
same is true for WN. No one could fix WN better than DL and Elliott knows it.
While UA plays checkers getting back into JFK, DL is playing chess for the entire US airline industry.
When FAA removed slots control at EWR due to UAL under-utilizing, Scott Kirby was still working at AA.
UAL did not sold JFK slots to Delta. It was a long-term lease agreement, and 10 years has already passed. I guess the contract is now up for renewal, or at a minimum UAL can ask Delta to return the JFK slots without huge breakup fee.
Is anyone privy to the details of that UA-DL contract?
doubtful.
others say it is auto renewing to perpetuity.
If DL’s flight count goes down and UA returns, then we will know the contract ended.
but the DOJ blocked the EWR portion of the DL/UA EWR/JFK slot deal because of UA’s size at EWR. and it is very possible that the DOJ might review any return of UA to JFK if it is part of a partnership with B6.
but Kirby specifically said in the Reuters article that they want a deal that does not involve government approval – which likely means an AA-AS west coast type agreement w/o UA metal.
I’m just surprised, even under Smisek (an attorney), UA would just hand over gates to DL in that way without some sort of recovery mechanism.
Matthew,
it was the same error that US mgmt made at DCA w/ the DL-US slot swap.
US and UA could not accept that there was an upper limit on market share above which the DOJ said “enough is enough” and they will not allow a carrier to gain any more access, esp. at slot controlled airports.
The DL-UA EWR/JFK slot swap was clearly built w/ DL’s belief that there was an upper limit on size – UA and CO before had/have 70% market share and yet they couldn’t accept that might be all they can get.
And Smisek and co. underutilized slots at EWR so the FAA pulled slot controls specifically to allow competition to use what UA was hoarding.
there are a whole lot of people that correctly believe that Smisek wasn’t as good as he thought of himself, including being able to see his and UA’s blind spots.
and as much as UA thinks that a basic AA-AS type partnership with B6 can eventually morph into getting a larger presence on UA metal at JFK, the same antitrust issues will arise.
UA still is the largest carrier in NYC based on revenue and ASMs.
It is a pure fantasy to think that donating to Trump’s inauguration is going to allow UA to steamroll past every antitrust regulation just to regain a position at JFK which should have never been given away.
Just thinking out loud, but I would gravitate for UA to eventually have B6 join *A seeing how seamless it was for AS to join OW. B6 might see that as attractive since UA, AC, and other airlines within the LH parent group have a JV, and B6 joining the JV will help grow B6’s desire to expand its footprint into Europe, almost similar to how VS joined ST and the TATL JV with DL and AFKL.
Personally wished B6 and AA went into the route where B6 joined OW as B6 already had a great relationship with QR. This would have balanced things out for airline alliances across the US a bit in my opinion.
it is an indictment of AA’s leadership that the judge in the NEA case specifically said an AA-AS type relationship would be acceptable w/ B6 and yet AA couldn’t figure out how to come up w/ a deal under those terms.
Small independent airlines don’t work. being part of an alliance helps but B6 is still dwarfed by DL in BOS and NYC.
UA is trying to be the savior for B6 but the only way UA can be anything at JFK is to take out either AA or B6. Kirby acknowledges that neither would pass antitrust review now but if they keep pounding away at one or the other – likely AA – then, in a few years, UA might have a chance of picking up AA’s JFK slots.
in the meantime, you have to ask what DL strategically does. Anyone that thinks that DL won’t come up w/ its own strategic moves to counter UA’s move back into JFK is not facing reality.
DL could add more of its own flights to UA hubs including transcons from EWR or it could be something bigger involving AA and WN, both of which would give DL a much bigger position in Texas which is the real opportunity for DL even though DL is the 2nd largest airline at DFW, Dallas Love and now AUS.
Southwest Airlines has large operations in multiple Texas airports.
AAL has a mega hub at DFW, the largest airport in Texas.
UAL dominates IAH, the 2nd largest Texas airport.
Opportunities for other airlines to grow substantially in Texas are limited.
Being #2 at mage hub airports like ATL, DFW or IAH has little reward financially. Delta management is smart enough not to waste time on chasing that ranking.
Texas is a huge market and DL is growing there as well as maintaining its #2 position in Dallas – even if well behind AA and WN.
DL does have a strategic focus on addressing its position in Texas.
given that 2 of the big 4 carriers that are struggling the most are Texas-based, it says that there are opportunities for DL to grow its Texas presence.
Do not for a minute rule out that DL will come out w/ plans in the next few years that have a far bigger impact in the industry than a B6-UA partnership
B6 needs a partner and has picked UA, UA does not need B6. UA has to be getting something out of this deal, or they wouldn’t do it. I don’t know if that is UA getting slots at JFK or what, it could be as simple as just a slightly enhanced interline agreement, or something larger like UA leasing slots at JFK.
The only thing we do know is that a deal exists, but not the details yet.
Regarding the details of the slot lease agreement, I thought I had found it at one point online in the past but don’t seem to be able to find it now. I believe those agreements have to be filed with the DOT, could be worth a FOIA request.