Delta, JetBlue, and Spirit Knock American While It’s Down (But It’s an Indirect Hit)

It’s been a tough few weeks for American without question. After filing for bankruptcy, it’s probably not a surprise that we see airlines trying to take advantage of the situation by moving in on American’s turf. There were three moves last week in particular that seemed to single out American. I say “seemed” to, because in reality I don’t imagine that any of these were made specifically because American filed for bankruptcy. In fact, I’d argue that one isn’t even targeted at American at all, though it will have an impact. Let’s look at each one.

Spirit Grows Dallas/Ft Worth
Spirit has has now refocused on domestic flying, and DFW is getting a big new spot on the map. This expansion will see one flight Spirit Rides the American Bankruptcy Waveper day to Atlanta, Boston, New York/La Guardia, and Orlando. It also announced a day later that it was going to add a daily flight to Mesa (outside of Phoenix) as well.

Let’s be clear on this one: this doesn’t hurt American much. Sure, it has the potential to siphon off some seriously price sensitive travelers on to Spirit, but American shouldn’t be targeting those people anyway. The flight times here aren’t very good with a redeye on the DFW-Boston and Mesa-DFW flights and some mid-day runs on the others. This isn’t going to pull off business travelers in any way, and I can’t imagine Spirit wants to do that. Just as it has tried to do in Chicago and in Vegas, Spirit sees an opportunity to go with super low fares and skim traffic off the bottom.

For Spirit, the timing was perfect. Spirit thrives on using outrageous slogans or promos to get free press. So when Spirit saw American file for Chapter 11 bankruptcy protection, it was too good to ignore. The press release makes that clear with references to a “new chapter in Dallas/Fort Worth’s history” along with $11 fares. You have to love an opportunistic airline. Spirit is like a parasite that lives off the misfortune of others – it’s brilliant.

This really shouldn’t be viewed as much of an assault on American, but many will draw the parallel. And American, like most legacy airlines, has nothing against irrational response so we’ll see where this goes. But American isn’t the only one that’s thinking about these moves. . . .

JetBlue Starts Boston to DFW
Another move that would seem to be more alarming to American is JetBlue’s decision to fly Boston to DFW three times daily. JetBlue has avoided DFW so JetBlue Fights Spirit in Bostonfar, and it has a strong relationship with American, so this might seem curious. Why is JetBlue doing this? I think it’s more about Spirit than American.

Is JetBlue trying to make a move on American’s turf? Well, it is doing that, but I don’t think it’s particularly targeting American. JetBlue stands to benefit through greater cooperation with American after the bankruptcy process wraps up, and it wants to be a strong partner. That makes this seem like an odd move.

And that’s why I think this is more about Spirit. JetBlue has previously been VERY aggressive at tackling ultra low cost carriers. When Allegiant announced it would begin flying from Long Beach to Las Vegas, JetBlue ramped up to offer 5 daily flights in the market and launched the additional flights with a $19 each way sale. Overkill? Yeah, probably. But then again, Allegiant pulled out.

JetBlue has tried a similar move with Spirit. Less than a week after Spirit announced it would do a daily flight from Chicago to Boston, JetBlue added a fourth flight on that route. While JetBlue doesn’t care about competing on Boston to Myrtle Beach and it probably accepts Spirit flying to its home base in Ft Lauderdale, it’s not going to be willing to sit there while Spirit moves in on other destinations. That’s why I think we’re seeing this move.

Delta Steals Gol from American
In a completely unrelated blow to American, Delta signed an “exclusive” deal with Brazil’s Gol to be the only US partner with the Delta Plays the Brazil Dating Game with Golairline. That means that American’s current partnership with the airline is going to disappear. Delta paid a pretty hefty price to get in on this – it had to invest $100 million in Gol and now has a seat on the Board of Directors.

While I can’t imagine this has anything to do with American’s bankruptcy (this kind of agreement had to be be in the works long before), I do think it was more about Delta feeling a little desperate about Latin America. Avianca/TACA and COPA will all be in Star Alliance. Though I don’t think it’s been announced, the combined LAN and TAM have to pick an alliance, and the scuttlebutt is that they’re leaning toward oneworld (as they should). That leaves Delta with a messy Aerolineas Argentinas and absolutely no presence in the increasingly important Brazilian market. This was an effort to buy a place in that market, and it’s a place that American likely won’t need assuming LAN brings TAM into oneworld.

So, lots of moves that impact American recently, but it’s not a direct hit, as the title of this post says.

[Original surfer photo via Flickr user The Pug Father/CC 2.0]

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