In a move that has sent ripples through the aviation industry, United Airlines and JetBlue have announced a strategic partnership dubbed “Blue Sky.” This collaboration aims to enhance customer experience by integrating loyalty programs and expanding route networks, all while maintaining independent operations.
Key Features of the “Blue Sky” Partnership
While both carriers suggested Blue Sky is significant, it’s unclear what changes for flyers today. Here’s a refresher on the deal.
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Reciprocal Loyalty Benefits: Members of United’s MileagePlus and JetBlue’s TrueBlue programs can now earn and redeem miles or points on flights operated by either airline. This integration offers travelers more flexibility and value for their loyalty.
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Shared Booking Platforms: Customers can book flights on both airlines through either carrier’s website or mobile app, streamlining the booking process and providing more options for travelers.
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Elite Status Perks: Elite members from both airlines will enjoy benefits such as priority boarding, complimentary access to preferred and extra legroom seats, and same-day standby or flight changes when flying on the partner airline.
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Airport Slot Exchange: JetBlue will provide United access to slots at JFK International Airport for up to seven daily round-trip flights beginning in 2027. In return, the two airlines will exchange eight flight timings at Newark Liberty International Airport, enhancing operational efficiency for both carriers.
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Technology Integration: United plans to utilize JetBlue’s Paisly platform for selling hotels, rental cars, cruises, and travel insurance, enhancing ancillary service offerings for customers.
For travelers, especially those in the New York market, this could be a welcome combination and the start of something bigger to come. Elite True Blue Mosaic members might have more to gain in a broader network on United as it continues to add more redemption partners for loyal flyers. Aligning systems and redemptions could pave the way to an acquisition or merger in the future.
Reflecting on the Northeast Alliance: A Cautionary Tale
It’s impossible to discuss this new partnership without recalling the ill-fated Northeast Alliance between JetBlue and American Airlines. Initiated in 2020, this alliance aimed to coordinate schedules and share revenue on flights in the Northeast U.S., particularly focusing on New York and Boston.
However, the Department of Justice viewed this collaboration as anticompetitive, arguing that it reduced competition and harmed consumers by consolidating market power in key regions. In May 2023, a federal judge ruled against the alliance, leading to its dissolution.
American and JetBlue seemed to have enjoyed its new partnership and adjusted frequencies to allow for its new network profile. That had to be unwound in an expensive and lengthy court battle. Both airlines spent a lot of money, time, and effort to maintain and grow their relationship only for the government to shut it down.
As Matthew pointed out in the above linked post, JetBlue reached out with its offer for partnership to every US carrier including the unlikely ULCCs. Where I think it goes a bit further is that American fought for something more out in the open, it wasn’t intended to be the start of a merger, but outsourcing package travel technology to United and slot swaps goes a bit further than just the loyalty program cross-utilization.
American comes out in a far worse position. It spend the money and fought for a JetBlue partnership. It’s reasonable that management didn’t aggressively seek to revisit something that might again incur significant cost, but if the deal goes forward without government scrutiny or intervention, then American essentially paved the way and paid the cost for a rival to come in with a slightly different approach to achieve a similar end. Worse still, Delta which holds a much more significant position at both JFK and LaGuardia will likely be unfazed by the partnership, but United and JetBlue will get stronger while American, already challenged in the New York market, will fall further behind.
Comparing Collaborations: Blue Sky vs. Northeast Alliance
At first glance, the Blue Sky partnership and the Northeast Alliance share similarities: both involve JetBlue teaming up with a major carrier to expand route networks and offer reciprocal benefits. However, there are critical differences:
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Operational Independence: Unlike the Northeast Alliance, which involved coordinated scheduling and revenue sharing, Blue Sky maintains separate operations for each airline. There is no codesharing or joint pricing, reducing the risk of antitrust concerns.
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Scope and Scale: The Northeast Alliance focused heavily on the Northeast corridor, a highly competitive and congested market. In contrast, Blue Sky aims for a broader national and international reach, potentially diluting concerns over market concentration.
Despite these differences, questions remain: Why is this new partnership considered acceptable when the previous one was not? Is the absence of revenue sharing and coordinated scheduling sufficient to alleviate antitrust concerns? Or does this indicate a shift in regulatory perspectives?
When JetBlue added Japan Airlines to its TrueBlue redemption partner program, there was no regulatory concern nor should there be. Emirates was a partner of JetBlue too among many others – why should United be any different?
A Rose by Any Other Name?
The Blue Sky partnership represents a strategic move for both United and JetBlue, offering enhanced benefits for customers and expanded operational capabilities for the airlines. However, it’s essential to scrutinize such collaborations to ensure they don’t inadvertently harm competition or consumer choice.
While Blue Sky differs in structure from the Northeast Alliance, the underlying goal remains the same: to strengthen market position through strategic partnerships. As regulators continue to evaluate the implications of such alliances, it’s crucial to balance the benefits of collaboration with the need to maintain a competitive and fair marketplace.
In the end, whether called an alliance or a partnership, the essence remains. And as with any rose, it’s the thorns that warrant careful attention.
What do you think?
except, as I have noted, AA is seeing the biggest percentage increase in traffic at LGA and JFK because of UA’s operational meltdown at EWR including the runway construction – according to Port Authority NYNJ data.
There will be a shift of traffic from EWR to JFK and LGA even after the runway project is over because the DOT is not going to allow EWR to return to the overscheduled mess that UA has made it over and over again. DL will benefit the most because of this shift in traffic while AA might benefit more significantly because they are strategically so much weaker in NYC.
And let’s still keep in mind that this B6-UA partnership is far less than AA and AS have – and that has done virtually nothing to help AA on the west coast. There is also history of loyalty partnerships between US airlines that just didn’t produce much impact.
There is a whole lot of “we won” and “we will win” over a partnership that is very limited initially and will likely not grow anywhere near to what a lot of UA supporters want to believe will happen.
and if it really does produce some benefit for UA, AA and/or DL can add flights at EWR which will not become slot controlled.
I think this is nothing.
JetBlue is a small player. Even JetBlue being acquired by United would not be so big and this tie-up is only a loose cooperation.
What could have shaken up the industry is Alaska + JetBlue but Alaska is preoccupied with Hawaiian integration. An Alaska+JetBlue could have been the start of a 4th big airline. Still unknown is the course of Southwest. If Southwest changes to become like Alaska, then the 4th airline could be an Alaska-Southwest combination but that possibility is at least a few years in the future, if at all.
Insightful! B6/AS, with oneworld membership would have been balanced and formidable. The fleet discontent might have been a challenge, but it would have been a fun hookup.
has it not occurred to those that are touting that UA will take over B6 that B6 might just be using UA to strengthen itself just a little bit more and then in 2 years – like right before they are supposed to fork over these slots for UA – that AS and B6 will announce a merger agreement – which of course will invalidate the slot swap?
Y’all never consider the possibility that UA might get played in all of this?
A merger between AS and B6 sounds great on paper. However, does the country really need another nation wide airline? I consider AA, UA, DL, & WN to be the top four. A 5th (AS/HA and B6) doesn’t add much for they would have to develop a hub/focus city in the mid-west at great expense for adequate coverage. And, any mid-west city of value has already been picked over by ULLC and LLC carriers. Also, there has been talk of excess capacity in North America as of late. Any recession, and the margins go out the window in a flash.
Better for AS and B6 to be regional players and defend their territory hoping one of the big four make a strategic blunder, then make their move.
If we had a different administration, B6 would be better off with an investment by a foreign carrier (Luft, BA, etc) and provide domestic thru service from BOS and NYC to spread out costs with greater PAX volumes.
The market and no one else will determine whether the US needs 2 or 5 nationwide carriers.
AS-B6 would be a classic end on end merger with virtually no overlap and would still be far smaller than the big 4 so has a high chance of getting approved if it is proposed.
Any acquisition of B6 assets by UA is highly problematic; B6 has been burned twice by trying to do deals which the DOJ shot down.
AS is digesting HA now but is in the process of transforming itself into a global carrier.
it is very possible that AS will be ready in two years to take on a merger with B6.
If that happens, UA’s partnership with B6 and any JFK slot deal would be terminated.
I agree that Blue Sky hurts American the most. Having surrendered so much of their position at JFK over the years, and with the operational problems they’re having, I fear that they are on the precipice of being the next TWA.
However, Delta could take a hit, too.
I live in Orlando, and fly to NY every six weeks, or so, often as a stopover on my way overseas. With JetBlue gaining access to a wider network and more FF choices, combined with them about to add F to more planes, it
Makes sense for me to consolidate a lot of my flying to B6 and its partners. I will probably even chase status, for the first time since the pandemic.
I may be a minority of one, but at least from me, Delta will see a decrease in engagement.
fortunately, there is data that tracks this stuff.
As of April, DL overtook UA as the largest airline in NYC and B6 was down.
This partnership won’t even begin until the end of the year in all likelihood.
AA and DL are likely to see strong increases in NYC traffic at UA’s expense at least through November. The DOT has not indicated how it will limit EWR flights in November and beyond but it is certain they will not allow them to return to what they had before.
Based solely on UA’s smaller size at EWR, AA and DL will benefit.
I disagree with your first statement, Tom. I think when looking back people tend to overstate AA’s former presence at JFK. Sure there’s a couple destinations that are no longer served (DUB, ZRH, SJU), but the network is still largely the same. The biggest thing that hurt modern AA in NYC was the 2009 US Airways-Delta slot swap at LGA. As for operational issues, AA’s OTP is only slightly behind Delta and United.
AA has made a lot of missteps over the last decade, but I wouldn’t say they are in death-spiral mode yet. They are definitely not in an advantageous position right now, but there’s still time to turn the ship around. The only thing that needs to happen is, well, they actually *do* need to turn the ship around. But lucrative opportunities for AA do exist. I’d argue that they are in the best position of the big three to poach disillusioned SWA passengers, and probably can get a lot of them with the right investments. Also, AAdvantage is still easily the best of the big three loyalty programs, and if the marketing department in Fort Worth can make that known, that might also bring a lot of travelers back to AA.
We’ll see what happens
@Jay, I appreciate both how salient your points are, and the respectful way you present them. Disagreement is more interesting, informative, and productive when it’s not vitriolic.
It’s tough to see how handing even more control over the NYC market to United works out well for passengers.
How long until AA sues United and Jetblue again because of this?
Alaska and JetBlue actually should be allowed and would be fair competition