JetBlue has not been quiet about its desire to have a domestic partner to help it fill some of the gaps it faces as a regionally-focused airline. It had one in American back when it tried to push through the ambitious Northeast Alliance (NEA). The courts didn’t take too kindly to that one, but JetBlue had a fallback plan… a Spirit merger which the courts also shot down. That left JetBlue with new management trying to figure out the right way forward. At this point, despite some of the speculation out there, it’s down to only one good option.
You’ve probably seen wild speculation ranging from a partnership with Southwest or Alaska to a merger with United. Everyone calm down. The only real option at this point is a more limited partnership with United. Reuters is reporting this is a done deal, but I won’t believe it until I see it actually announced. If that happens, however, it would be a good outcome for JetBlue.
What is it exactly that JetBlue wants? JetBlue President Marty St George reminded everyone on the airline’s recent earnings call.
… as far as the benefits that we expect to offer to our customers, the most important thing is, number one, a significantly higher network opportunity for earn and burn of TrueBlue points, which we think greatly improves the utility of TrueBlue. And that means, for example, today, if you are a customer in the Northeast and you love JetBlue for leisure, but twice a year you have to go to Omaha or Boise…. and the second thing is I’m really excited for just the overall broadening of the network opportunities, not just connectivity, but also just a sort of better opportunity to our customers to fly more places with more frequency.
Ok, so JetBlue wants a partner that will enable broad earning and burning of miles in TrueBlue. After all, that makes TrueBlue more valuable and it gets more people to sign up for that lucrative credit card. And it just wants a broader network for customers to access which would include higher frequency in relevant markets. This greatly narrows down the options.
Southwest is not one of them. There is no world where Rapid Rewards would be considered a meaningful broadening of JetBlue’s earn and burn access. I assume people are just getting hung up on hearing “Omaha or Boise,” but that’s just silly. The same goes for Alaska. JetBlue already has its international partnerships and it keeps adding earn and burn on them as of late. Alaska itself doesn’t add that much value in a partnership. And ULCCs? No value there.
So who does that leave?
Delta, well, that would probably be good for JetBlue. It’s also going to happen when hell freezes over. There is no love lost between these airlines, but specifically, why would Delta do this? It wouldn’t. It’s trying to kill JetBlue in Boston and New York. This would only help JetBlue in places where Delta doesn’t need much help. Even that’s questionable. There’s a reason that Delta has never been a part of this conversation.
The only two logical options are American and United. And American has now quite publicly announced it is out of the running. It sent a letter to the team and published it in its newsroom which I’ll talk about more next week.
With American out of the running, that leaves United as the only sensible option for the Blue Crew. That’s the only other possible partner that can give JetBlue what it wants.
JetBlue wants a global mileage earn and burn partner, and United is certainly that. It also makes JetBlue more attractive as an option for the large MileagePlus cohort. That’s obvious. Regarding more frequency to places around the network, United does provide that in New York, if people are willing to cross the Hudson and go to Newark. Elsewhere, it does provide added opportunity to connect via United’s hubs, but how big this opportunity is elsewhere isn’t completely clear.
What may make this more appealing to JetBlue is that United is likely pretty hungry for this deal as well, which could mean a better financial outcome for JetBlue.
Think about it this way. There are three markets that matter to JetBlue the most: New York, Boston, and Fort Lauderdale. United is strong only in one, New York.
In Boston, United is a fourth place airline, similar to American in New York, actually. Here’s a look at July departing seats:
July Departing Seats from Boston
Data via Cirium
United only serves its hubs, so it treats Boston like a proper spoke with ample service to the hubs but nothing else. This partnership would make United somewhat more relevant in Boston.
The same goes for Fort Lauderdale. United has been wanting some kind of toehold in South Florida for ages, and now it could get a small one. Here’s how that breaks down:
July Departing Seats From Fort Lauderdale
Data via Cirium
Fort Lauderdale is particularly interesting since JetBlue’s big competitor there is Spirit. The addition of a partner like United — even though it only serves its hubs plus Cleveland — means that JetBlue could further differentiate its ability to provide value through TrueBlue. It should make a difference in that fight.
Assuming this United/JetBlue tie-up is the eventual outcome, the real question is… what form will this partnership take? Unquestionably it will include a frequent flier partnership that allows for earning and burning on both airlines. But it gets more complex from there. A codeshare would certainly make a great deal of sense, but there are contractual issues with pilots on both sides that would need to be cleared. That might have to be a future development at best. The only other thing I could imagine in the initial agreement would be a slot-leasing agreement.
Somehow, the Italian news site Corriere Della Sera has the scoop that United will pick up 20 slot pairs at JFK from JetBlue. This is an awfully strange place for that leak to come to life. It also seems like more slot pairs than United would actually want. But we do know that United wants to get back into JFK with a full complement of slots so it can fly to the West Coast with enough frequency, unlike its last attempt. JetBlue might find it a benefit to part with a handful of slots are JFK that could make more money on lease.
I can’t imagine anything beyond that would be in an initial agreement. But really, I have to think that JetBlue envisions its ultimate future as a part of something larger. United CEO Scott Kirby is certainly laying the groundwork for something bigger in the future; I don’t imagine he’s busy praising President Trump’s tariff plan just for fun. He wants to know if he comes with a merger proposal, it doesn’t get stopped.
A partnership, of course, doesn’t mean that the partner would end up being the successful acquirer in the end anyway, so it’s very premature. But for JetBlue, just locking down a significant domestic partner is important, and the friendly skies seem to be the only option that gets JetBlue what it wants.
Edited to fix the percentage labels on the FLL chart
