Apparently JetBlue CEO Dave Barger was sending love notes today when he said JetBlue looks “forward to deepening and expanding the relationship with American.” This is very consistent with JetBlue’s interest in growing partnerships with airlines all over the place, but is it the right thing for American? After all, what made sense for American before may not make sense post-US Airways merger, right?
Wrong. That could be true in some instances, of course, but I have no doubt that a stronger relationship with JetBlue is a good thing for American.
I kind of look at JetBlue as the nicotine patch for American. American has long had a love affair with New York because of its historical presence and standing on big business routes like LA, London, and Sao Paulo. But American also competes on a lot of mid-size routes like New York to Cleveland, Columbus, Nashville, and St Louis. And I’m not convinced those are worth flying for the airline.
For American, the rationale is probably that some big corporate client needs to fly to those places, so American has to fly there. But with United covering them from Newark and Delta doing the same from LaGuardia, there’s a lot of competition. Just because some big corporate client needs to go somewhere doesn’t mean your airline should be the one to take them there.
American is at a disadvantage in New York simply because it neglected to grow the business when it could have been creative. Instead, Delta took any opportunity it could find and has built a formidable competitor with greater breadth and similar if not better depth in overlapping markets. With JFK and LaGuardia slot-restricted, American doesn’t have any real opportunity to grow, and really, it probably shouldn’t now anyway.
Instead, American can be very strategic about this. It should pick and choose the markets that are profitable from New York and serve them well. For everything else, why bother? Well, some people will undoubtedly make the argument that you have to keep serving all these markets for sales purposes. Those corporate deals will completely fall apart and everyone will run away if you stop serving, say, Columbus. That argument has been used for years on all kinds of routes. When I was at United, the airline “had” to keep flying empty planes from JFK to London because corporate accounts demanded it. Guess what? When we stopped flying the route, the airline didn’t fall apart.
But to simply cut these routes and go cold-turkey has to give a lot of people at American withdrawal symptoms. That’s where JetBlue comes in. Right now, American AAdvantage members can earn miles on flights from New York and Boston to cities where American doesn’t fly. It’s a nice little partnership but it’s not going to do that much for either airline.
What if the airlines up their game here? What if these miles started counting toward elite status? What if there were reciprocal elite benefits? What if it was rolled out to every route across both systems? What if there was codesharing? In other words, what if this started to look more like the partnership American has with Alaska?
And then, what if JetBlue started moving into some of the markets that American currently fills? JetBlue has become more attractive to business travelers, especially in Boston, and it could build up New York more that way as well. Just think what JetBlue might do if American found a way to get those slots over to JetBlue. It could be a beautiful thing.
It would allow American to pull out of markets without completely killing its presence. Just as some people find it easier to quit with a nicotine patch, American might find it easier to reduce New York with a partner picking up the slack, at least in some key markets.
Of course, JetBlue doesn’t have a first class cabin, so those who rely solely on upgrades may not be thrilled. But then again, those who rely solely on upgrades probably hate flying American’s little single class regional jets on many of these routes anyway. If they haven’t already gone over to Delta, they’ll consider JetBlue a big upgrade.
Of course, with new management, American might decide it won’t need a crutch and it could just go cold turkey in New York. But with a strong partner wanting to make that partnership even stronger, why would you?
[Original JetBlue photo via Christopher Parypa / Shutterstock.com, Original American photo via Christopher Parypa / Shutterstock.com]
