American Airlines (NASDAQ: AAL) and JetBlue Airways (NASDAQ: JBLU) said Thursday morning that they had formed a strategic partnership to give customers in the Northeast more route choices by integrating their complementary networks as they work to recover from the devastating impact of the coronavirus on air travel.
In total, JetBlue gets reciprocal codeshare flights on 60 American routes and American gets access to 130 JetBlue routes.
The news comes less than 24 hours after American Airlines warned that it plans to furlough up to 25,000 employees by October 1.
American Airlines is one of the largest airlines in the world, but it was saddled with heavy debt prior to the pandemic, while JetBlue is a mid-size domestic carrier without the deep pockets and access to the same level of credit as mainline carriers.
Officials said the alliance gives leisure travelers more flying options than they each could provide alone. American benefits from more JetBlue customers funneling into its network in New York and Boston, while JetBlue primarily benefits by allowing its customers more connectivity to U.S. and international destinations. JetBlue is primarily a domestic carrier, with destinations in the Caribbean and a few locations in Central and South America.
The more the carriers can fill airplanes with passengers, the more flights they can afford to offer and the more opportunities shippers have to move freight in the bellies of those flights.
Airlines reduced flight capacity by more than 90% early this year as the pandemic spread and travel dried up. In recent weeks, airlines have begun to restart some passenger operations in response to higher ticket sales, but bookings are still a fraction of what they were a year ago. The flare-up of COVID-19 outbreaks across the U.S. is lowering expectations over how fast airlines can expand service.
The alliance proposes reciprocal codeshare and loyalty benefits, giving customers more competitive fares and more travel flexibility.
The carriers said their partnership offers new and expanded routes. Upon implementation of the alliance, American will launch international service from New York’s JFK International Airport to Tel Aviv and seasonal service to Athens, while JFK to Rio de Janeiro will return as a daily seasonal route in the winter of 2021. The new non-stop services will be the first for American from New York in four years. Once the coronavirus pandemic has ended, the new partnership will facilitate American adding new long-haul markets in Europe, Africa, India and South America, the airlines said.
JetBlue will add flights at New York’s LaGuardia and New Jersey’s Newark airports, while also increasing its presence at JFK to allow more connections to American’s international network. JetBlue said it plans to enhance service to strategic markets on the East Coast, West Coast and in the Southeast, building on recently announced service between Newark and nine markets, including its new Mint premium franchise to Los Angeles International Airport and San Francisco.
“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,” Joanna Geraghty, JetBlue’s president and chief operating officer, said in a statement. “This partnership with American is the next step in our plan to accelerate our coronavirus recovery, get our crewmembers and our aircraft flying again, and fuel JetBlue’s growth into the future.”
“Together we can offer customers an industry-leading product in New York and Boston with more flights and more seats to more cities,” American Airlines’ President Robert Isom said.
JetBlue is not joining the oneworld alliance or American’s partnership with IAG Group, the parent company of British Airways and Iberia, and will continue with plans to independently launch and operate trans-Atlantic flights to London in 2021.
Implementation of the agreement is subject to final negotiations and procedures, as well as regulatory approval.
In February, American renewed a partnership with Alaska Airlines (NYSE: ALK), which is strong in the western U.S.
Meanwhile, Alaska Airlines said it is adding seven new domestic routes from Los Angeles International Airport. It also will start new service in November from additional West Coast airports: Seattle-Fort Myers; Portland-Fort Lauderdale; and San Diego-Fort Lauderdale.