JetBlue and American Airlines Are Forming an Alliance, But Is a Merger In the Works?

Given the travel industry's current economic woes, a bigger deal might be prudent

JetBlue
Photo By Bill Clark/CQ-Roll Call, Inc via Getty Images
By Kirk Miller / July 17, 2020 7:00 am

JetBlue and American Airlines are teaming up to sell seats on each other’s airlines and share frequent flyer benefits. But is this the beginning of a bigger relationship?

The stated goal, as per a press release, is for the new alliance to “create seamless connectivity for travelers in the Northeast,” offer more customer choice for “complementary domestic and international networks” and “accelerate each airline’s recovery as the travel industry adapts to new trends as a result of the pandemic.”

According to Barron’s, JetBlue will add more than 60 routes to its network with flights operated by American, primarily in New York. It’ll also be able to easier connect to international flights offered by American. Meanwhile, American will add over 130 routes operated by JetBlue and launch new international routes.

But besides new routes, code sharing and frequent flyer points, the news could portend a merger, given that all airlines are suffering heavily during this time of COVID-19; for example American — the world’s largest airline — is about to furlough 25,000 employees. “The industry is looking for ways to market more product with less capacity,” as Bernstein analyst David Vernon tells Barron’s. “If we’ve learned any lessons from Covid, it’s that a smaller number of better-capitalized airlines will be better able to deal with this.”

Or, it could just be a way to gain some traction in new markets. Both airlines have denied merger rumors. And American already put in place a similar alliance with Alaska Air earlier this year. As well, JetBlue still plans on beginning its own international routes.

“Certainly working together, we see the ability to recover faster than we otherwise would have,” as Scott Laurence, JetBlue’s head of revenue and planning, told the Wall Street Journal. “This provides a much needed tailwind in terms of recovery.”

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