The worst-kept secret in the industry finally became officialy last week when United and JetBlue announced the launch of their Blue Sky partnership. The headlines were about what I expected, but there were some interesting nuggest buried in the release. I spoke with JetBlue President Marty St George to get the story.
On the surface, again, it’s largely what I expected. The centerpiece of the announcement is the frequent flier partnership that allows earning and burning across the two networks, mostly. It’s not actually that simple. United has excluded some markets, but it is being coy about what those are. All the airline would tell me was this:
While a few routes will be excluded, most JetBlue flights, including transatlantic flights, will be eligible for accrual, redemption, and benefits. We’ll have more details as we get closer to the program rollout.
My thinking is that transcon overlap routes might be involved, but we will have to wait and see.
This isn’t just an earn-and-burn situation. The airlines took it even further by giving elite members in each other’s program benefits when flying the other. It’s the usual stuff like preferred seating, priority boarding, and a free checked bag.
There will be no codeshare — presumably because that involves tech work and getting labor involved, which isn’t going to happen — but there will be full interline with the ability to sell flights on the other airline coming to each carrier’s website and app.
And yes, United will return to JFK, but it won’t be until 2027. United will have the ability to use up to seven of JetBlue’s slots from a gate in Terminal 6. In exchange, JetBlue and United will also swap eight runway timings at Newark which Marty says will enable his airline to fly more of those Caribbean and Florida flights earlier in the day when leisure travelers want them.
Why 2027 for JFK? Marty said this was entirely United’s decision. United President Scott Kirby made it clear at the Bernstein Strategic Decisions Conference that this is because the airline won’t have good transcon airplanes available until then. This presumably relies on the 737-10 MAX actually being delivered.
Despite all of this, there were three other points that I found most interesting of all.
Not Joint Sales, But Let’s Call It a Mutual Benefit
United and JetBlue will have the ability to include each other’s flights in their corporate deals. This isn’t a new concept, and it’s something that JetBlue has done in the past with other carriers. Marty gave me two good examples of how this could in theory play out.
On the one hand, when United comes to JFK it will still have few flights from there. If a corporate deal needs access to, say, South Florida, then United could include JetBlue’s flights in the mix to win that business. On the other hand, JetBlue might be chasing a corporate deal in Boston that needs Chicago. It has limited frequency, but if it can include United’s flights, it can win the business.
This is not a joint sales agreement. It’s just an extra tool in the toolbox for each airline to win deals.
Paisly is Spelled Weird, But It’s About to Get a Huge Win
JetBlue’s Paisly product allows the airline to add hotels, car, packages, etc when someone books a flight. Today, United outsources all of that to ALG various third parties, and it will now switch over to using Paisly for hotels, cars, cruises, and travel insurance and presumably more.
Marty proudly explained, “we are extremely good at this.” Getting the added heft from United will, I assume, allow Paisly to get better and bigger deals which can only make for a more compelling offer for customers. I know there was a lot of wondering why JetBlue didn’t get rid of this business when it created the JetForward plan after Robin Hayes left as CEO, but now you’re seeing how this can start to be a real contributor.
Kinective Media Also Gets a Huge Win
If JetBlue wins with Paisly, United will get a win with Kinective. What the hell is Kinective and why does it also look like it’s spelled wrong? I can’t answer the latter, but to the former… the press release succintly describes it as a way to “connect airline customers to personalized, real-time advertising, content, experiences and offers from leading advertising brands.”
United has a lot of screens and people with apps — a lot of touchpoints — so it built this network last year as a way to monetize that screen space. I know, you hate it as a customer, but it is the way of the world. Now, JetBlue will use Kinective onboard because, guess what?, it too has a lot of screens.
The same way size helps Paisly, it will help Kinective as well. It creates a lot more view opportunity in the hugely important New York and Boston markets. It should be easier to sell bigger deals to advertisers.
You can see how a deal like this makes it easier for United and JetBlue to come to terms compared to what everyone expected to see, American and JetBlue. American confirmed to me that it still has its vacation product in-house, so it wouldn’t be in the market to have Paisly step in. And American doesn’t have an advertising network — even if it wanted to do it, it has far fewer screens anyway. There is a unique ability for United and JetBlue to give each other what they want that makes the value of the deal easier to justify.
The question on everyone’s mind is whether this will pass regulatory review. The truth is we don’t even know if there will be a regulatory review. Marty confirmed that they have or are in the process of briefing both the Department of Transportation (DOT) and Department of Justice (DOJ). While there is nothing here that would trigger a review automatically, the feds can decide to look into anything if they want. That being said, it’s hard to imagine this will be a problem.
In the judge’s ruling dissolving the American/JetBlue Northeast Alliance, he gave a pretty clear structure of what is and isn’t ok. JetBlue has made sure to craft something that wouldn’t be objectionable based on its past experience. There is no joint scheduling here. No antitrust immunity is required. All that being said, I’m very wary about predicting anything the federal government may or may not do these days.
Assuming all goes to plan, Blue Sky will start to be implemented in the fall. JetBlue loyalists should be happy to have a big, broad network to tap into at United. United loyalists in the Northeast, especially those in Queens/Brooklyn/Long Island, should be happy to have more flights at their disposal. Delta probably isn’t worried, but American, well, it’s just watching and trying to figure out a way to make a living in the region.
But for United and JetBlue? Yeah, I’m gonna say it. It’s nothing but… Blue Sky… with this deal. God, I hate myself for even typing that.
Edited 6/2 to reflect that ALG continues to manage parts of what United does on vacation packaging, but the direct-to-consumer offer goes to Paisly and that is managed by several different providers
54 comments on “JetBlue and United Begin Their Partnership With a Few Buried Surprises”
“But for United and JetBlue? Yeah, I’m gonna say it. It’s nothing but… Blue Sky… with this deal. God, I hate myself for even typing that.”
What are you worried about! That deserves a “BlueStar.” God, I hate myself as well for even typing that.
No need to fell blue about what you type !…
Well done my friend.
I don’t get this partnership. Both JetBlue and United are huge players in the New York market. How is the DOJ and DOT letting this happen, when they blocked AA and JetBlue who had a fraction of the overlap and market concentration?
It’s a completely different deal with United as it is primarily an interline agreement Vs a full code share agreement with American that was enacted, but was struck down in the courts.
In other words, they are dating not married.
And will be somewhat moving in together in 2027 @ JFK.
Newark and LGA/JFK compete for Manhattan business, but not much else. Maybe Staten Island. Perhaps portions of the Bronx.
If you live on Long Island, you’re going to LGA/JFK. If you live in northern Jersey, even LGA can be challenging.
United realized, long after they gave up access to JFK, that doing so had been a mistake.
Whereas AA + B6 was about LGA/JFK.
Bob Z – The big difference is that the AA/B6 partnership included schedule coordination which required antitrust immunity. This does not have any of that.
Are slot swaps, sales, or leasing subject to any regulatory concerns?
Jason – I don’t believe it requires a review by the government, but they can decide to look at anything if they want.
Everyone is concentrated on the interline and slots but what Brett has correctly pointed out these companies are taking their strengths – loyalty, travel products, and advertising to make this all mutually beneficial and more profitable.
No airline really makes money from flying, they make money from their side hustles – and that is what they really want to do, make money. Executives on both sides of this deal were every creative and smart with this deal.
This is the way. For those that doubt, look at DL’s 2024 10K: PRASM: 17.65, CASM: 19.30, Net: -1.65 (-9%). It’s only once you use TRASM that you get to DL’s +10% margin, which is driven by a $10B ‘Other Revenue’ line item (thanks, American Express!)
Airlines have proven over time that they can’t help themselves when it comes to competing for passengers; they will essentially reach a steady-state break-even (or worse!) margin flying passengers. The difference today is they are better at creating an ecosystem where they can make money in other ways (e.g. credit cards, advertising revenue, etc.)
The biggest thing for United is those seven slots at JFK, what would those have cost to procure on the open market, assuming that quantity was even available (it’s not)? Those slots are all about protecting LAX and SFO, being able to serve their loyalists in those markets who just don’t want to involve New Jersey in their trip to NYC. Once this service begins, United will finally be completely de-Smisked. And thank God for that.
The rest of it simply makes sense, adding value for both airlines and their frequent flyers. United getting this deal done with JetBlue after years of American’s tortured and ultimately fruitless attempts is just another example of why United is trouncing American now.
Completely unrelated – I flew American’s “new” first class on a 319 from ORD to DCA last night. Worst domestic first class seat I’ve ever had, almost completely devoid of padding, certainly devoid of comfort. But here’s the kicker – NO IN SEAT POWER! And there was power in the exit row (coach, obviously) of the older 319 interior on the way to ORD! American loyalists, please try to make that make sense. In two years, American will be completely indistinguishable from Spirit and Frontier and still torturing me at DCA.
@Bill from DC I think you nailed it. For United, this is all about the JFK-LAX/SFO market. For years, Kirby has made comments that he missed the days when the company’s 756s touched the pavement around the clock between those three cities. While I don’t think the 756 will be the best aircraft for today’s market between those two city pairs, I would be surprised if Scott launched routes from JFK that _didn’t_ involve LAX/SFO.
Kind of baffling that JetBlue would let the wolf into the henhouse to compete directly on those routes. Their Mint yields on JFK-SFO and JFK-LAX were supposedly standouts in their system.
It looks better to the government if they are competing on a few of their most profitable routes. They probably know their loyal flyers are still going to pick them, if they can sell a few connections onward on United to Asia, Australia, or Hawaii, then even better.
AA doesn’t have any of its 319s reconfigured yet, so I highly doubt you flew on one… When they do have them, they’ll have in-seat power at every seat.
American’s not worried! They’re making $$$ flying everyone through DFW to El Paso on no-TV-having a321s! Screw you JetBlue!
(This is sarcasm.)
Also ALG is a funny name, nice corporate sheen to cover for the fact that it’s just Milwaukee-based travel agency/package seller Apple Vacations. And they’ve still got WN as a client!
What is the practical difference between an interline and a codeshare here?
Brett knows better than I do, but I think a codeshare involves the following…
1. putting another’s airline actual code in a reservation.
2. the sharing of revenues & coordination of schedules.
3. Reciprocal agreements on mileage earning & other perks like lounge access.
An interline only allows for passengers to be transported between the given airlines plus baggage. If I’m missing anything, please correct me.
SEAN – It’s only bullet 1. The rest of those have nothing to do with codeshares, but can be added on to any partnership.
Thanks Cranky! I can always rely on you for the right answers on things like this.
Alex – An interline simply allows the two airlines to have their flights on the same ticket issued by each carrier. (How useful that is depends upon how much is allowed on each carrier in the fare rules.) Plus it allows bags to be transferred between the two. Interlines are pretty standard agreements. A codeshare means that there is a code from one carrier that sits on top of the operating airline’s flights. So instead of buying a ticket, say, from Boise to New York/JFK via Chicago with the first flight marketed and operated by United and then JetBlue, this would be both flights marketed by JetBlue or United even though operating airlines are different.
Good graphic – TED, RIP with a SONG in it’s heart and a METROJET in the clouds.
The pending interline agreement appears to have few differences from interline commitments airlines made prior to the Airline Deregulation Act of 1978. Then, if you flew from, say, Nashville to Duluth, you flew on Delta to Chicago and North Central to Duluth. They could sell seats on each other’s airline, had a single thru price and handled each other’s luggage.
In those days, airlines didn’t have frequent flier programs, but that’s about all the difference!
Think of United and JetBlue as “Back to the Future,” with apologies to movie fans!
What will UA do with the seven slots at JFK? Will they have two or three for Chicago? That’s their closest hub and will maximize connectivity, but it’s well served via LGA. Or will they put all their eggs in transcon to SFO and LAX? This is probably their best bet, but really limits a lot of connectivity for those who prefer JFK over LGA
It will be SFO and LAX. If the goal is to improve connectivity for New Yorkers or people going to New York, LaGuardia works perfectly for that via Chicago. This is about nonstops to the west coast.
And onward connections over the Pacific.
The relatively small number of UA loyalists who prefer JFK and want to go to ORD will have a UA earning opportunity on JetBlue’s flights from JFK to ORD now, so there’s that at least. I had to check, I didn’t know B6 still flew JFK-ORD. If B6 starts picking up more UA flyers on that route, they might even add a frequency or two, but that’s a stretch.
(I lived in Manhattan for a decade and still can’t understand the preference for LGA when JFK is so much easier to get to on public transport.)
I could even see B6 throwing a couple of flights a day in on ISP-ORD if they see signs of demand from Long Islanders wanting to head west without dealing with JFK. Probably not a high priority, though.
The MTA significantly beefed up the Q70 bus to LGA post covid. It’s free, frequent and (usually) fast. Travel times to both airports are similar from Manhattan, but transit to LGA is cheaper and easier than to JFK nowadays IMO.
The JFK AirTrain is also annoyingly expensive now.
$8.50! That seems crazy.
UA has re-entered JFK twice since the big exit with limited LAX/SFO service and failed both times. Why will this time be different? 3x each is not nearly enough frequency against AA, DL, and B6 flying 10x+. And they plan to fly it on a 7M1? If you’re only going to get 3 flights, it should be operated on a 788 or even the high-J 763 for the premium seats/product.
Anthony – Two things, assuming United doesn’t exclude them, United customers will be able to earn miles and get elite benefits when flying JetBlue, so that changes the game. But also, in corporate contracting, United will be able to include JetBlue routes in corporate deals if needed. So those two things make a big difference.
The amount of regulatory review required will be inversely proportional to the size of the UA and B6 donation to the Trump PAC. Sad but very true.
Absolutely correct & every corporate big wig knows it.
What a wonderful country we live in. Just swell.
Just like ALPA, AA, and WN giving tons of money to Democrats to keep Skywest Charters from getting their DOT Economic Authority, which should have been granted 90-120 days after filing.
Instead it was nearly 4 years.
So much for the “Democrats are more ethical” argument.
How much $TRUMP coin will they need to purchase to get this across the finish line? Enough to get invited to the next dinner?
“There will be no codeshare… but there will be full interline with the ability to sell flights on the other airline coming to each carrier’s website and app.”
So if I go to United.com, they’ll list JetBlue flights for me as options to book directly on United.com (and vice versa)?
If so: how is this meaningfully different from a codeshare from a consumer point of view? Isn’t this most of what the airlines would want from a codeshare anyway (just without the labor problems)?
I’m just a nerdy spectator, not in the industry, so I may be missing something :).
The difference is how it will look. Those JetBlue flights will be listed simply as “JetBlue flight B6 123”, not “United flight UA 7890 operated by JetBlue”. If anything, it seems like it would be easier for the customers as it will clearly say JetBlue, no reference to United, and probably reduce the number of “do I check in with United or JetBlue” type questions.
XO – You got it. I personally prefer interline to codeshare as long as the pricing is right. But codeshare is generally simpler and gets higher interest from customers. So the shenanigans continue at most airlines.
Time for United to dust off its “Rhapsody in Blue” themed TV ads from years ago. They can show United and Jet Blue planes climbing skyward together. Could be classy if done right. Just a random thought.
Great idea! I wish I’d thought of it!
LAX to JFK transcon MINT seems to be a big money maker for jetblue, I wonder if adding UNITED into the mix will ruin that at all.
Ever since the idea that JetBlue might work with United instead of its more “natural” partner started floating around, American, this has been the biggest source of armchair-CEOs (including me, I’ll admit.)
I’m presuming JetBlue has crunched the numbers and believes that the new premium business will be coming mostly from other competitors at JFK (AA, DL). They also get all the other benefits of the deal. And I think JetBlue is presuming that most of their Mint customer base is relatively loyal and won’t switch from B6 to UA. I think that while, of course, they can’t discuss it, they’re presuming UA will maintain some price discipline on JFK-SFO/LAX. And JetBlue is part-owner of the new T6, so they get a share of the terminal and gate rental money too.
I think the benefits of the rest of the arrangement outweigh the risks here.
Yes. For the occasional West Coast flyer, adding the united elites to the waitlist for mint upgrades will ruin it for regular ticket holders … no longer will we be able to book a $289 one-way ticket JFK – SFO, and upgrade for $599 to full mint. – – Which would normally cost something like 1200$ If booked as a “Full fare“.
Also, Will there be inter lines from SFO via Newark or JFK, to jet blues’ European routes? Of course a narrow body across the Atlantic is bumpier and less spacious… But mint ain’t bad .—Definitely survivable!
May I say also that the PS service on the California to JFK triangle, was not half bad – – three or four aircraft daily, configured with Premier economy, business and first– – Now that was civilized.
Separately, JetBlue may not be getting the best deal given the Newark centric routing at United airlines, and the recent Newark service reduction/lack of air traffic controllers/Partial meltdowns is not a great thing.
Pm – Mint upgrades are not on the table for United elites. They can get Even More at best.
Connections from B6 to UA are about to get harder at LAX. BOAC agenda item on a WN lease change reviled that B6 will be moving to T1 while LAWA tears down and rebuilts T5 at LAX.
Has anybody received comment email notifications today? It seems the system I use has just failed completely. Looking into other options in case it doesn’t return, but I’m just looking for confirmation from others.
My question is will Jetblue add flights into some of United’s hubs? Right now The only one they really fly to with any type of frequency I think is SFO, but I could be wrong.
Caleb – If there is enough feed traffic into cities via those hubs, then I wouldn’t be surprised to see additional flying. But I would think the best candidate for that would be Chicago or Denver to get all those Northeasters into smaller cities around the country. But that may not be necessary. They might be fine just letting customers flight United the whole way on those journeys to places where JetBlue doesn’t serve.