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
41 comments on “JetBlue’s Domestic Partner Options are Now Down to One”
If JetBlue and United are really moving toward a deeper partnership, then yes, I’d imagine JetBlue will need to add frequency to some of United’s key hubs. Right now, JetBlue doesn’t serve most of those cities with any real depth. If they want the partnership to actually function beyond loyalty reciprocity, there has to be some level of feeder flying. United could easily say, “Hey JetBlue, you take this thinner route into DEN or IAH and carry the connection flow,” while they focus on long-hauls and bank structures.
Also, with LAX Terminal 5 set to close for construction, that raises another logistical piece. I assume JetBlue would push for space in T6, 7, or 8. If they’re going to cooperate more with United, especially for connections, they’ll need proximity. Even just a few gates with coordinated scheduling would make a big difference.
Could a codeshare realistically help JetBlue restart routes that struggled before? SJC is a good example — with United’s code on it, there’s more visibility and potentially more feed from their side of the network (especially in the Bay Area, where United is strong). JetBlue doesn’t need to compete with United; they can complement each other. But that only works if JetBlue steps up presence in places like ORD, IAH, SFO, and maybe even DEN.
> United could easily say, “Hey JetBlue, you take this thinner route into DEN or IAH and carry the connection flow,” while they focus on long-hauls and bank structures.
This partnership won’t have antitrust immunity (that’s what doomed the AA-B6 partnership), so wouldn’t that be illegal?
Alex – Thanks for adding levity. That’s right. I can’t imagine there’s any way they would try to get coordination here. Maybe in the future, but antitrust immunity can’t be a first step.
If an agreement with United takes place, whatever form it is in, is there any sort of guarantee that it will stick around for a meaningful length of time?
Last time around with AA, two of the big things were the slot swapping plus FF benefits. All of which had to be undone pretty quickly when it fell apart. Even though it wasn’t directly the airlines’ fault, those rapid shifts are not great for operations or passenger loyalty.
Who knows what the DOJ will have to say this time around, but they’d better come up with a really compelling proposal and very good reasons for us to believe that this partnership will last.
There’s never a guarantee about anything. However, any airline entering into a partnership obviously want it to last.
AA/B6 didn’t ‘fall apart,’ it was (from the start) a risky and legally untested joint venture that was predictably challenged in court, and lost. You can absolutely blame the airlines for pursuing such an aggressive quasi-merger – one of the risks is exactly what happened. It wasn’t just slot swapping and FF benefits – they were sharing revenue and coordinating schedules.
The reporting from Reuters indicated that this would be a much simpler partnership compared to the NEA, and one that would therefore be on much stronger legal footing. All of which would suggest it would last.
Jason H – There’s no guarantee of anything, but the only thing likely to kill something like this would be if another airline swooped in and proposed an acquisition. I don’t see why it would end otherwise, unlike the original NEA with American which was only shot down because of the courts.
I’m not sure B6 is going to let go of their flagship (and possibly most profitable) transcons. Blue has made ALLOT of mistakes….Mint is NOT one of them. If anything it’s a template of what happens when market research, inflight, accounting/finance and advance schedule planning successfully work together. I can’t help but to think there will be a JFK-LAX/SFO carve out to keep the brand, product and revenue skewed towards B6.
It will be good to see Blue tails in flyover country outside of token 2 a days to JFK. I can see B6 metal filling in in high demand/low yield stuff out of FLL, MCO, LAS , SJU and the Caribbean. Twenty years after TED they will finally have a lower cost partner that dosent bastardize the brand but knocks CASM down a few cents to fun N sun markets.
There’s a lot of buzz on FB saying or suggesting that WN is preparing to make a move against JetBlue. What value B6 would bring, beats me. Unless it’s just to eliminate a competitor. I always thought that a AA/B6 matchup would’ve made more sense. Not that I’m a big fan of mergers and acquisitions in general. I figured this “alliance” was intended to be a precursor to that effect. No wonder B6 is trying so hard.
But rumors and speculation have been going on since the earliest days of chat boards. So I rarely give them much credence. Anyone remember the endlessly asked question of “What will Northwest replace their DC-9’s with?”
I really doubt WN’s masters at Elliott are going to let them set fire to bales of money to challenge B6. WN has it hands full already coping with the operational changes coming in and challenges from the ULCCs.
A Southwest acquisition of JetBlue would almost certainly increase the total value of the combined airline. The bases at JFK and BOS would produce way more revenue if they were plugged into a national network.
At the same time, I don’t expect Southwest to make an offer any time soon. The antitrust approval would be too risky and uncertain, and add an extra variable at a time when all executive attention is focused elsewhere.
B6 and WN play in completely different sections of the market. B6 flies transcons/Europe and has its main hub at JFK an airport WN does not even serve.
Is there more likely this partnership would pass when the AA didn’t? What is the current DOJ/DOT views on something like this?
I always figured B6 would go for a smaller airline to prevent any anti-trust denials
What Cranky is describing is a frequent flyer partnership with some paid leasing of assets, not an immunized joint venture. I don’t think DOT/DOJ have much to say about frequent flyer partnerships.
Seriously?
They did.
DOJ shot it down.
This initial proposal is closer to the relationship between AS and AA right now (except stopping short of B6 joining Star), not the Northeast Alliance, and the DOJ has zero problem with that.
No one is proposing coordination of fares or revenue sharing, which of course isn’t permitted without a fully approved and immunized JV, which isn’t going to be allowed. But I’m not sure what level of schedule cooperation, if any, is allowed with a simple codeshare.
Kip – If there is no antitrust immunity required and it’s just a simple partnership as I expect, then DOJ/DOT won’t be an issue. I think everyone is getting too amped up over this being something much bigger than it is likely to be at the start.
I still believe an Alaska JetBlue tie up is very much possible even if United may have the breath of service in most of the country that JetBlue may desire.
When it comes to NYC flyers, most of them will not willingly travel across the Hudson to fly as most flights at EWR have a similar one at JFK or LGA. The only reason to do that now a days is tied to “what’s in their wallet.”
Thank you for the rational and reasoned approach to what is known about a B6 partnership. There are several realities that some people continue to miss.
First is that there continues to be too much capacity in the US domestic market in part because most of the industry capacity is not sustainably profitable at post covid labor costs which DL has led higher and continues to push up. DL and UA are the only sustainably profitable carriers right now and UA has amendable contracts with its FAs and mechanics and the list of labor groups will grow to all 6 non-pilot unionized groups by summer.
The only thing that is saving the US domestic market is that oil prices are down to pandemic era low levels. Even the AF/KL and LH both noted that the relatively low levels of international booking decline they are seeing is being offset by low fuel prices.
Second is that AA should have done a deal with B6 paralleling the AA-AS relationship. Kirby has been gunning for AA in Chicago (which is adding another round of flights) and they’d love to take out AA in NYC as well.
Third is that UA is motivated first and foremost to a return to JFK because JFK is the primary airport for outside the LGA perimeter traffic in the NYC area. AA, B6 and DL all serve all 3 NYC airports; UA is the notable exception.
Fourth is sheer size of the carriers in the NYC market. NYC is essentially a slugfest between DL and UA with AA and B6 along for the ride. DL has 15% more flights but UA has a revenue advantage because the majority of DL’s slots are from LGA which are perimeter limited.
Fifth is that there is ZERO appetite in the country for any of the big 4 to become larger and to further concentrate their power. It is one thing to add a codeshare and even alliance partnership between B6 and UA but quite a different matter for B6 to give up slots to allow UA to further grow in NYC – even before all of the talk about a potential future merger or acquisition.
Sixth, B6 and UA cannot negotiate what markets UA will serve if B6 leases slots to UA. That is collusion. If B6 leases slots, it runs the high risk that UA could grab the slots and then cancel the rest of the agreement, leaving B6 with competition in some of its most valuable routes – the CA transcons.
And finally, whatever takes place with B6 is the opening salvo in fixing the overcapacity problems in the industry. AA and WN right now both financially underperform as does most of the LCC and ULCC sector. Other deals will come esp. if B6/UA progresses to the point of altering the current competitive balance in the industry.
I don’t agree on point 5 – I honestly don’t think the average American cares that much whether or not an airline or two in the middle of the pack disappears. And even if they do, the current administration is very unlikely to care. B6 being acquired would be likely to pass general antitrust muster, although there would be pressure to give up slots/EWR runway timings depending on who’s doing the acquiring.
OTOH, JetBlue would be foolish to not have UA agree to put the UA code on Mint JFK-SFO/LAX flights written into any codeshare agreement. And if they can’t do that legally, then they just need to do it by simply not leasing UA any JFK slots. I don’t know how much UA wants this deal to solve their Northeast-to-Florida problems, Boston share, or JFK presence-by-codeshare in general, but Mint is JetBlue’s most profitable product and they can’t give it up.
The vast majority of Americans don’t care about the details of the current trade and tariff war but they do very much care about seeing an increase in the price of everything from cars to cucumbers.
Whether the average American understands economic principles doesn’t matter because people in private enterprise and the government not only understand the economic principles at play as well as the issues that are at play in the US airline industry. When you consolidate the industry to higher price competitors and transfer assets to them, prices will rise.
Ever since deregulation, the US government has been trying to build a viable low cost sector and prevent the legacy carriers from being able to dominate the industry. Those attempts are more at risk than at any time in the nearly 50 years since the domestic airline industry was deregulated.
Add in that you have UA execs who have repeatedly talked about eliminating or wounding competitors including AA and multiple low cost carriers including determining how much spill they provide for low cost carriers and it is hard to believe that regulators aren’t fully prepared to add their two cents to any conversations that involve growth attempts by DL or UA, the only two economically and sustainably viable airlines right now.
The DOJ has repeatedly rejected attempts by a higher cost carrier to cooperate with or acquire even assets from lower cost carriers- that is the central theme of the demise of the NEA and the B6/NK merger attempt.
A simple codesharing and even an alliance deal – not unlike AA/AS – could potentially help B6 more than UA but when you get into talk about a future merger or even leasing slots to UA, all of these questions of an increasingly consolidated industry have to be addressed.
And regulators understand that if you allow even little bits of further consolidation in a very limited access market like NYC where one of the players is already the largest player, then you open up all kinds of scenarios for further industry consolidation in many more markets.
Tim, I agree with your initial point #1 – there seems to be way too much capacity in the market at the present time. When have you last heard of airfares dropping in the summer months?
The best way to solve this…. let one of the 2nd tier (struggling) airlines die off, and that would be either Spirit, Frontier or JetBlue. I say struggling in the sense that all seem to be spinning their wheels right now, looking for a way to complete with the Big4, and lacking a very clear direction (at least to my armchair). The only one of those that seems to have any value is JetBlue, and the only value are the JFK & BOS ops. Is it worth it for SWA or UA to come in to try to buy them? Perhaps – both would gain very valuable NE operations and slots. For SWA, the value might not be there, as their operation would be immediately complicated by adding 2 new ac frames to the stable. Or, for AS to spread to being a fully ‘national’ airline? Perhaps. The terms of the deal have to work out for both sides.
Would such an acquisition get approved with the current administration, since, as noted above, this would be one of the Big4 carriers gobbling up a smaller competitor? There is only one way to find out with the current administration – propose it, and bring it to the table to see what happens.
Love the Dating Game pick BTW.
These airlines are struggling now, with full airplanes. What happens if there is a downturn this year, as looks more and more likely?
Take 10 or 15 percent of the pax away.
Someone isn’t going to make it to 2026 without a filing, maybe multiple somebodies.
Blocking the JetBlue / Spirit merger is looking even more nonsensical in hindsight.
“You are ordered to provide sub-scale competition to the majors, even if it kills both of you!”
It only looks non-sensical if you don’t understand anti-trust law.
Competitors failing in the marketplace is fine and legal.
Competitors merging with the explicit intent to reduce competition is illegal.
“We must allow this anti-competitive merger in case the economy crashes and there’s a downturn in travel demand” is an unserious argument.
I have a differing opinion on the 20 slot pairs. To me it doesn’t seem that much when you divide it amongst SFO/LAX/DEN/ORD/IAH with the majority SFO, LAX, & DEN.
Eric – But why bother with any of that. United already flies to DEN/ORD/IAH/IAD from LaGuardia, so what does JFK add? This isn’t about connections. This is about local traffic, and LaGuardia is better for most. So it’s really just a question of LAX and SFO.
They already served DEN, ORD, and IAH out of LaGuardia already, so they wouldn’t really need to add service from JFK.
(The only reason to consider adding JFK to those hubs would be if their market studies showed a substantial demand from Long Island that wasn’t willing to go to LGA, and if there was enough demand there they could just add ISP to ORD and have done with it. The fact that none of the three network carriers serve ISP now suggest this isn’t the case.)
The main reason for UA to want slots for JFK is for premium service to SFO and LAX instead of codesharing on JetBlue’s Mint product, and JetBlue is really going to have to think long and hard about going along with that.
As for Southwest they have 2 moves to make on this proposed deal.
#1 They can come in and just make a Full blow Merger offer to JetBlue and force United hand to make a counter deal. This will make United pay a lot more money for JetBlue or could Kill the deal entirely.
#2 They can Lobby to Block the deal saying it’s no different than a new version of NEA with a new partner rallying with AA that’s it’s Anti competitive.
The question is, would WN’s bluff get called? And if it does, are they prepared to go through with it? Courts have made companies complete mergers in the past.
In one scenario, it’s worth UA’s while to force WN to buy B6, then watch as WN mismanages the assets. Then UA can move in. The problem tends to be getting access to JFK, which is something UA would like.
WN making a Play to buy JetBlue would be a Win Win either way for Southwest. Gaining JetBlue market share and network would give Southwest a strong foothold in a markets it’s struggled to capture organically over the last 2 decades.
The one Fleet Type operation has Run its course at WN Buying JetBlue gives them a Turnkey opportunity to capitalise all the synergies JetBlue would add to WN robust Domestic dominance. It’s something WN couldn’t do overnight and in the current delivery delay environment would take them well over 15 years to achieve organically.
Hopefully Elliot’s WN BOD aren’t too short sighted to see the long term benefits with such a merger would bring.
Is it just me or are the percentages in the FLL table wonky?
And does this mean B6’s recent small moves to snuggle up to OneWorld members (BA codeshares, redemption of TrueBlue on JL) were some of four-dimensional chess to get UA’s attention, or that B6 wants to maintain a solid degree of independence from UA, even if it eventually joins Star, just as CO used to do even when it was a Star member?
CraigTPA – It’s not just you. I’ve fixed in the post. It had the percentages from Boston in the Fort Lauderdale chart. Sorry about that.
As for JetBlue, it is going to do what it can to partner with as many international carriers as possible. United has nothing to do with that strategy and won’t impact it.
Basically the same thing as AA and AS where American is weakest and pairs with a smaller, West coast focused airline. Makes sense to me!
I have a hard time seeing JetBlue leasing slots at JFK. It’s basically the only city they are making money in these days. Where could they possibly move those aircraft to?
Anthony – Boston? Fort Lauderdale?
Maybe this whole thing boils down to TV sets. United is getting them, and American apparently isn’t. If there is a merger in the future, it could also boil down to engines. American’s A321NEOs have GE engines, and JetBlue and United’s have Pratt and Whitneys. LOL
P.S. This comment is meant to be a bit facetious. Most of the comments I’m seeing about this seem to think there’s some kind of nefarious ulterior motive to this partnership, and maybe there is. But it’s nice to see someone try to counter all of the hyperbole.
I don’t see this moving the needle much for either airline.
For JetBlue, their customers get the opportunity to earn and redeem on a wider network. Presumably that will help retain some frequent flyers that mostly fly JetBlue, but have occasional trips that aren’t in the network. I used to fly JFK-SFO frequently for work, and it would have been nice if I could have used those points to fly to the regional airport near my hometown for VFR travel, so I see the appeal here.
For United, their customers get the ability to earn and redeem on some nonstops to Boston and Fort Lauderdale that United is very unlikely to fly themselves. I was going to write “their customers can use their points for nonstops to Orlando”, but JetBlue has shrunk their Orlando station down to basically just serving the Northeast now. It seems very marginal and I think most United flyers will never notice or care.
I expect the impact in NYC to be relatively minimal. EWR and JFK serve mostly non-overlapping catchment areas for origin traffic. It will be somewhat nice for Manhattanites, but most other people in the area will only cross-shop across airports if there is a huge difference in fare or schedule.
@Cranky – Can you discuss how Alaska’s relationship with AA is different than what JetBlue expects with United? I woyld think that is the base case AA was offering to JetBlue. AA had a path for B6 to join OneWorld and both were colocated at JFK hubs. I dont see how Someone from NJ is going to travel to JFK or someone in Queens/LI is going to travel ro Newark to get some frequent flier miles.
Brian W – Well, we don’t know because no partnership has been announced.
But I would think that this would not be as tightly tied as Mileage Plan and AAdvantage are. Those are really set up to make it so you are treated similarly regardless of which airline you have status with. I would think this would be a lighter touch in the beginning.
I know Alaska has its hands full. But I also have trouble seeing them sit on their hands for this one.
One scenario in my mind is they’d but JetBlue, but not immediately go about integrating it. They’ve got their hands full with Hawaiian, and JetBlue can exist as a separate part of the Air Group until they’re ready to integrate it.