JetBlue Airways is seeking a new partnership with United Airlines after its alliance with American Airlines was terminated by court order, potentially giving customers expanded travel options during the carrier’s financial struggles.
At a Glance
- JetBlue is negotiating a partnership with United Airlines focused on loyalty programs and customer connectivity
- This comes after a federal judge blocked JetBlue’s Northeast Alliance with American Airlines in 2023
- The new deal would not include schedule coordination or pricing decisions
- JetBlue has struggled financially with only two profitable quarters in the last nine
- American Airlines is suing JetBlue for over $1 million to cover dissolution costs of their failed alliance
Failed American Airlines Alliance Leads to New Partnership Search
JetBlue Airways is actively pursuing a partnership with United Airlines following the termination of its Northeast Alliance with American Airlines. The previous alliance was blocked by the Department of Justice in 2021 on anti-competitive grounds, with a federal judge siding with the DOJ in 2023. American Airlines subsequently lost its appeal and is now suing JetBlue for more than $1 million to cover dissolution costs related to their failed partnership. This legal aftermath has pushed JetBlue to seek new opportunities to strengthen its position in an increasingly challenging airline market.
“In recent months, we had been exploring an opportunity to further enhance our network by renewing a partnership with JetBlue. As always in considering partnerships, the objective was to advance our business strategy and enhance our customer proposition by building on American’s network position and giving a partner’s customers access to our global network and the world’s best loyalty program in AAdvantage.”
“Although we proposed a very attractive proposition to JetBlue and its customers and team, it became clear over time that JetBlue was focused on different business priorities. Ultimately, we were unable to agree on a construct that preserved the benefits of the partnership we envisioned, made sense operationally or financially, or was consistent with the travel rewards and co-branded card business objectives that are so important to our strategy and our customers,” said Steve Johnson, Vice Chair and Chief Strategy Officer of American Airlines.
Frequent Flyer Benefits Without Pricing Coordination
Unlike the ambitious Northeast Alliance with American Airlines, JetBlue’s potential partnership with United would have a narrower scope. The new partnership is expected to focus primarily on customer connectivity and frequent-flier benefits without coordinating schedules or pricing. This approach may help the airlines avoid the antitrust concerns that doomed the previous alliance. For passengers, the arrangement would likely mean expanded options for earning and redeeming loyalty points across both carriers’ networks while maintaining competitive pricing between the airlines.
“We’re going to be announcing another partner down the road, hopefully in this quarter, and excited to be doing that. We’ll let the wind down of the NEA take place as it has been for the past couple of years. But we’ve been meeting with multiple carriers, and obviously the value that we think of regarding the partner we’re announcing drives more for JetBlue than other carriers that may have been in those considerations then,” added JetBlue’s CFO Ursula Hurley.
Financial Struggles Drive Partnership Pursuit
JetBlue’s push for a new partnership comes amid significant financial challenges. The airline has reported only two profitable quarters out of the last nine since the COVID-19 pandemic. Its stock has plummeted approximately 47% this year, accompanied by increased short interest from investors betting against the company. Economic uncertainty from trade wars has further complicated JetBlue’s recovery efforts. The airline is now looking to revenue from customer loyalty programs and partnerships as a critical avenue for growth and financial stabilization.
New York Airport Dynamics and Acquisition Rumors
JetBlue currently holds the second-highest share of flights at New York’s JFK airport, behind Delta Air Lines and ahead of American Airlines. United Airlines has expressed interest in expanding its presence at JFK, where it currently has limited operations. This strategic alignment has fueled speculation about potential acquisition interests, though United has officially denied any merger talks with JetBlue. The airline’s declining market value has nonetheless positioned it as a potential acquisition target in the eyes of industry analysts.
“I would like to have a presence on the other side of the river at JFK (airport). But man, all the headache, all the brain damage of buying a whole airline to get there. That’s a lot to do,” said Scott Kirby.
Regulatory Concerns Remain a Consideration
Regulatory hurdles continue to shape airline partnership strategies. The Department of Justice’s successful intervention in the JetBlue-American alliance serves as a cautionary tale for airlines considering similar arrangements. United’s CEO Scott Kirby has openly acknowledged concerns about regulatory challenges in establishing domestic routes at JFK through acquisition. This regulatory environment explains why the potential JetBlue-United partnership is being structured more conservatively, focusing on loyalty programs rather than route or price coordination.
