JetBlue appears to be talking out both sides of its mouth regarding American Airlines, happy to partner and challenge. What’s going on?
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JetBlue Loves American Airlines In The Northeast
American Airlines and JetBlue Airways formed the Northeast Alliance (NEA) codesharing on routes in the Northeastern US corridor to compete with United and Delta who each have strangleholds on New York City metro airports Newark and JFK respectively. Initially, JetBlue and American promised “increased frequencies on more than 130 existing routes; 90 nonstop routes with increased capacity; and 17 new international routes launched.” It’s said that approximately 50 new routes have been launched as a result of the tie-up.
This included a combination of both daily summer seasonal service and year-round services spread across New York Laguardia airport and Boston Logan International airport primarily. The alliance states that it increases competition in the northeast by representing a challenge to the aforementioned carriers. Though approved by the outgoing Transportation Secretary, Chao, in 2021, the Justice Department is now suing the two carriers to break up the agreement.
JetBlue has been effusive in its support for American Airlines and even suggested it’d like to emulate American’s lucrative loyalty program.
Going to War In South Florida?
Through a single announcement of a new flight from Fort Lauderdale to Tallahassee, Florida (needed but not significant to the network) JetBlue made a proclamation of its future South Floridian dominance.
“As a customer-centric alternative to the high-fare legacy airline that dominates South Florida, we have achieved rapid growth in Fort Lauderdale and are ready to turbocharge further expansion once we combine with Spirit.” Robin Hayes, Chief Executive Officer, JetBlue” – SimpleFlying
What’s so odd about all of this is that the new route doesn’t start until January of 2024 (almost a year), it doesn’t necessarily foretell the completion of the Spirit merger or announce a “win South Florida at all costs” strategy. Elsewhere JetBlue suggests they will challenge the legacy airline in South Florida with competitive fares to the west coast in Mint and even to Europe.
What should be abundantly clear, is the legacy airline in question is JetBlue’s Northeast Alliance partner, American Airlines. The “high-fare legacy airline” commands just short of 70% of all passenger traffic in nearby Miami and sells flights to other South Florida airports including Fort Lauderdale.
Political Gamesmanship or a Preview?
It’s been widely speculated this week that for JetBlue’s other Justice Department showdown to be successful (yes, it has two potential lawsuits in progress against the government at the moment) JetBlue could only merge with Spirit if it were willing to sacrifice the Northeast Alliance. It’s important to note that the DOJ has not formally sued for the second matter yet, but even the most enthusiastic pundits don’t see a JetBlue future where it can operate both.
Assuming it is one or the other, is this a preview of how JetBlue will plan to operate South Florida after absorbing all of Spirit Airlines and its massive footprint? There’s no question that the acquisition of Spirit Airlines is the better long-term (and short-term) move for JetBlue’s Expansion and when given the choice, the Northeast Alliance would go away first.
Rather, could this be political gamesmanship? Using a single short-haul flight from Fort Lauderdale to Tallahassee to talk about future European network advances, and expanding to 250 flights from FLL seems odd. As mentioned this isn’t even a route set to start for more than 10 months, it feels like it was just the next opportunity to get some attention.
The question is whether that signals to the DOJ which has not yet sued that they can resolve both the NEA and Spirit question in one breath But it could also send a message to DOJ that it still sees American Airlines as a competitor and will call it out as such. Labeling it a “high-fare legacy airline” takes an open dig at American and shows that despite a partnership, the two remain competitors.
Conclusion
It’s unclear how JetBlue perceives its relationship with American Airlines to be one of partner or foe and whether that relationship changes based on the market itself. If American is a “high-fare legacy airline”, the utter antithesis of what JetBlue is selling” but only in South Florida, then I think the model is problematic. If It’s rather a case of Hayes indicating what he’s willing to do to grow his airline, then it also makes him someone that will say whatever he needs to get his way. Both the DOJ and customers should be wary if the latter is the case.
He has staked his career on the NK purchase. He will say and do anything not criminal to get that transaction done.
Although the DOT decisions on the B6/NK tie up and the B6/AA NEA are not likely to be rendered on the same day or at the same time, seems like it will be an either/or scenario, even of the NEA and the B6/NK merger don’t really amount to substantial overlap in the NEA markets. South Florida is a problem, given NK’s presence in FLL alongside B6’s and the AA hub in MIA.
Fundamentally, the B6/NK merger is bad business. B6 is paying a massive premium for planes and pilots and then taking on extraordinary costs to integrate the NK fleet to the B6 format, assuming this is all approved, which seems improbable. As to the NEA, the fundamental issue with it is the slot trading between AA and B6. It would stand to reason the NEA could continue but with more guardrails on how they use their slots at JFK, LGA, etc…Fully unwinding the NEA would simply suggest its ok for a duopoly to control NYC airports (DL at JFK/LGA and UA at EWR) and leave no room for anyone else but for fragmented, P2P service.
NK’s presence is not just the amount of routes that they run out of FLL (which are at like a staggering 68 routes, where 19 of them have no competition)
JetBlue on the other thing has 43 routes that they serve with only 4 unique routes (Quito/White Plains/Worcester/Steamboat)
Also, with Spirit spending money and bringing more into Broward County (especially Dania Beach and Miramar) by bringing jobs down here to me is more impressive.
JetBlue on the other hand although they tried to get Orlando built up with the flight training center will never really embarace probably one of the reasons to me that Spirit is better for S. Florida and that is they get it.
I know you are crazy for united but no they are so not important in the NY area
Delta is who they are after
united with their stupidity axed off their own share in the NY market
News flash: This is how the NEA is SUPPOSED to work. Cooperation is limited to Boston and New York. Everywhere else, the two airlines compete.