The FINANCIAL -- JetBlue Airways Corp. and American Airlines Group Inc. today announced a strategic partnership that will create seamless connectivity for travelers in the Northeast and more choice for customers across their complementary domestic and international networks. Customers will experience a number of benefits from the new partnership. In addition, the relationship will accelerate each airline’s recovery as the travel industry adapts to new trends as a result of the pandemic.
The airlines aren't merging but are forming an alliance, the companies announced Thursday. It is similar to a partnership American and Alaska Airlines struck on the West Coast weeks before the coronavirus decimated U.S. air travel. They will feed each other passengers on select flights to and from the Northeast, launch reciprocal frequent flyer benefits and offer flight booking on each other's website. American provides JetBlue customers with more international flight options from New York's John F. Kennedy International Airport, and JetBlue provides American passengers with more domestic flight options into and out of New York and Boston, where it has a large presence and plans to grow, USA Today reported.
“Pairing JetBlue’s domestic network with American’s international route map creates a new competitive choice in the Northeast, where customers are longing for an alternative to the dominant network carriers,” said Joanna Geraghty, president and chief operating officer, JetBlue.
The partnership includes an alliance agreement that proposes codeshare and loyalty benefits that will enhance each carrier’s offerings in New York and Boston, providing strategic growth and driving value for customers and crewmembers of both airlines.
This kind of alliance is common among international carriers, which face limits on where they can fly in each other's respective countries. It's less common, but not unheard of, for two domestic airlines that compete against one another. The agreement comes at a time when all airlines are struggling with the massive plunge in demand for air travel during the Covid-19 pandemic. All airlines are expected to post massive losses in the second quarter, and layoffs are looming at many carriers come October. Job cuts are not allowed until then as part of a $25 billion federal bailout of the airline industry passed earlier this year, according to CNN.
“This is an incredible opportunity for both of our airlines,” said American Airlines President Robert Isom. “American has a strong history in the Northeast, and we’re proud to partner with JetBlue as the latest chapter in that long history. Together, we can offer customers an industry-leading product in New York and Boston with more flights and more seats to more cities,” Rober Isom added.
Through their integrated networks, JetBlue and American will operate reciprocal codeshare flights, giving customers new options with improved schedules, competitive fares and nonstop access to more domestic and international destinations. JetBlue will gain connectivity to more U.S. destinations, a broad global network and an improved frequent flyer proposition, while American will complement JetBlue’s improved and expanded service with new international routes. JetBlue and American loyalty members will also enjoy new benefits while the carriers are exploring additional premium experiences for customers.
American shares were down more than 5% in morning trading Thursday after announcing it could furlough 25,000 employees, while JetBlue’s were off 2.4%. Other airline stocks were also trading lower, CNBC wrote.