JetBlue and American Airlines Join Forces

Weathering the Coronavirus Storm

American Airlines (AAL) and JetBlue (JBLU) have created an alliance, which the two companies hope will help them through the pandemic.

Domestic leisure travel slowed dramatically when the pandemic set in. Though there were signs of recovery in late May, flight booking numbers have fallen again as COVID-19 cases rise. Bookings for international and business travel ground to a halt as well and have not recovered since.

Airlines have parked planes and cut tens of thousands of jobs. Analysts expect that domestic air carriers will lose $23 billion in 2020, and the airline industry will be about 25% smaller in 2021 than it was before the pandemic.

A Combined Effort

Every airline is working to think of creative solutions for survival. American Airlines and JetBlue believe that by combining their unique strengths, they will be able to come out ahead of competitors like Delta Air Lines (DAL) and other carriers.

American and JetBlue are making plans to connect their loyalty programs and to help each other with marketing. A main goal of the program is to achieve dominance in the Northeast, specifically Boston and New York. JetBlue has a large, loyal customer base in the Northeast. American has added more flights than most other carriers since air travel hit record lows in April. The airlines hope that combining these two advantages will help them come out ahead.

New Routes and Strategies

The proposed alliance is subject to regulatory approval. If it takes effect, the partners would be the biggest air carrier in New York by number of outgoing flights.

American also plans to roll out new international routes, thanks to a larger customer base through the partnership with JetBlue. JetBlue will also add its own transatlantic routes. Additionally, JetBlue aims to expand its presence at Newark Liberty International Airport, where United Airlines (UAL) currently leads and plans to add more flights to and from LA. Airlines will likely continue to face turbulence for some time. Investors will be watching carefully to see if JetBlue and American’s partnership helps them come out ahead of their competitors.

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