Will your new partnership with JetBlue make American Airlines the King of New York?
Probably not.
But 15 years after losing its dominant position as the big Apple’s leading airline among well-paid business travelers, and five years after it began to retreat particularly from its operations at John F. Kennedy and LaGuardia airports and retreat to its difficult understanding and evil The old hub that works in Philadelphia, the American now has the possibility to reapply in New York.
JetBlue, on the other hand, may still have the capacity that has always tried to compete well with its hybrid quality service beyond the limited limits of its Northeast fortress.
Certainly, the JetBlue-American association, announced Thursday, is far from a corporate marriage out of necessity. But the desperate need for Americans to rebuild at least some of New York’s valuable visitor base that it has abandoned over the past two decades, and JetBlue’s old desire for more domestic and foreign routes to its limited network, make the partnership similar. to a “friends with a profit” business relationship.
The couple would possibly never triumph at the altar through a real fusion. Potential pitfalls for this come with antitrust concerns, probably opposition from unions from either operator, and the incredibly high debt levels they have incurred this year (particularly in the United States) to avoid the monetary cave after Covid-19 destroyed the global air request. But in those fashionable times, the perception of a strong friendship from which the two can satisfy some of their desires could paint well.
In the United States, JetBlue would gain a much larger network than particularly the ability of the 20-year New York operator to compete on routes between the country’s largest and highest dynamic market with second-tier primary cities across the country.
Meanwhile, the partnership with American will make JetBlue’s ability serve many giant and generally successful U.S. home markets. And Europe, which does not serve lately due to its limited road network and its relatively small size.
The giant American locations in LaGuardia and Kennedy will give JetBlue plenty of space to load more domestic flights, which in the past only had limited capacity.
Scott Mayerowitz, executive editorial director of ThePointsGuy.com, an online booking and news service that focuses primarily on common flyers, said JetBlue’s preference for expansion has been well known for two decades. “But the limitations of the area and the government in New York, Boston, and Washington have prevented it from doing so,” he added, noting that JetBlue has attempted a number of similar, if less ambitious, partnerships with other operators over the past 20 years. .
For Americans, JetBlue will give you greater access to the massive call for domestic business travel between the citizens of New York and the densely popupast because of the northeast where the American no longer has the presence it once had. The carrier, which moved its headquarters from New York to Fort Worth in 1979, has noticed that its share of the mass transit market in the New York domain grew from about 20% in the past due to the 1990s to just 10% today. Rival Delta Airlines now carries nearly a third of all air travelers whose journeys begin or end there.
The Americans also governed the vital direction of New York-Los Angeles that connected the country’s two largest economic markets. But while it still competes in those transcontinental directions, Americans’ relief from their domestic and foreign schedules in either city, as well as Delta’s competitive expansion in New York, noted that Americans lose their once-dominant position as the billions of dollar corporation company for its New York-based employees.
The American is also likely to see an improvement in their market position in Boston, another Northeastern city where it has traditionally had a solid position, but has largely retired in recent years.
JetBlue has always considered Boston to be its largest market right now. But with its limited network of domestic routes, it has struggled to compete with Delta. Therefore, access to the massive U.S. home network deserves JetBlue’s position in some other economically dynamic Northeast metropolitan area.
“America Airlines has gone backwards on New York flights for years,” Mayerowitz said. “This partnership will allow you to be a tougher player in the economic center of the country. American will fill its incredibly lucrative foreign flights without making an investment in a network of domestic routes. This will allow you to compete more with Delta and United, which have stolen corporate contracts that lead to the most productive profits. »
Not all major points of the association are fully developed. Plans for the expansion of foreign service for any of the operators remain unclear for the time being due to unprecedented weakness in demand caused by the Covid-19 global pandemic and government restrictions on the foreign Array. But either operator expects to have interaction in the “shared code” on their domestic flights and, potentially, on some foreign flights. They already have codeshare agreements on multiple foreign routes. The codeshare is industry jargon for flights operated through a single airline, but it brings the airline code and flight numbers of any of the airlines when indexed on online booking systems and agents.
None of the companies discussed in Thursday’s announcement whether JetBlue could join the American-led global oneworld airline alliance led by American and British Airways. Nor did they say if they could at any time apply for antitrust immunity that would allow them to go far beyond the exchange of codes through a secure operation agreement on secure foreign routes. This degree of partnership between airlines would require them to seek federal immunity against antitrust laws.
JetBlue is a member of any of the 3 major alliances, however, it maintains loyalty program relationships with various operators who are members of 3: oneworld, Star and SkyTeam.
For American, the JetBlue partnership replicates well on the East Coast the West Coast-centric strategic dating it agreed to create with Alaska Airlines before this year. American considers Seattle-based Alaska to be an affordable way to compete well in valuable West Coast markets, where it has struggled for years to operate profitably because of its superior cargo structure. Alaska had a similar appointment with Northwest Airlines to see that it erodes once Delta acquired Northwest and in recent years has begun to particularly expand its presence in the Seattle market. Now Alaska is in America to offer its tireless West Coast travelers greater access to the rest of the country and nonstop long-distance service to Europe and Asia.
Americans’ eagerness to have a jetBlue spouse in a New York-based marriage has increased and decreased since the mid-2000s, when Delta began its attack on the New York market. The competition includes United, a major hub operator in Newark, just across the Hudson River from Manhattan, as well as domestic giant Southwest and all reduction carriers in the country. This has made it very difficult for high-cost airlines like American, Delta and United to make a profit there. However, due to the large length of the New York air transport market and its above-average economy, New York remains a very vital market spot for U.S. carriers.
American, in fact, has stopped seeking to regain its leading position in New York’s market position after its acquisition through US Airways in 2013. Under US Airways, your Philadelphia city centre has been noted for its poor quality operations, lost baggage, flight delays and unattractive flight schedules. Since the merger, operations in Philadelphia have taken a particularly step forward and their schedule has been particularly advanced. But it remains the 20th busiest airport in the country, one position ahead of New York’s LaGuardia and particularly Newark’s No. 6 and No. 11 airports.
While expanding in Philadelphia, American reduced its domestic operations at Kennedy and LaGuardia airports, ceding the territory to the mix of Delta, JetBlue and Southwest. He has also reduced his own flights at Kennedy Airport, moving much of those flights to his oneworld partner, British Airways, with which he has signed a joint-operating agreement that is immune from competition.
Now, however, American’s new partnership with JetBlue shows that he recognizes that his recall from the New York market was a strategic mistake that harmed his ability to compete for highly lucrative and strategically vital business contracts with many giant corporations. who have a major workplace or giant workplaces there. Many of those corporations also generate millions of dollars in the air that do not involve New York City, but still choose other airlines because American also cannot offer enough seats in the New York market.
Without those contracts, American has not only noticed that its percentage of domestic routes to and from New York has declined, but has also lost business due to foreign United and Delta flights. This is because once business travelers began flying more locally, and gained many common traveler problems, over their American rivals, those passengers also tended to move much or all of their foreign flights to their rivals.
American’s resolve to build its foreign center in Philadelphia, 100 km southwest of New York, had little effect on foreign travelers making transfers to or from cities in the interior of the United States. That’s because there’s virtually no difference between converting planes in Philadelphia and converting planes into New York.
But the rise in service in Philadelphia, which is now only the eighth largest market in the country with 6.2 million people, and the decline in New York have left Americans at a disadvantage in an attempt to compete with travelers in the 19.2 million inhabitants. New York metropolitan area. New York is also a much more dynamic market spot than Philadelphia. While New York is 315% larger than Philadelphia in terms of the metropolitan population, it is 375% larger in terms of the GDP of the metropolitan area. Thus, not only has the American particularly reduced the length of the group of local citizens that he can serve from his foreign northeast center by focusing on Philadelphia, but he has also reduced the potential economic effect that can be generated through The Local Component of Its Northeast. foreign gateway.
I wrote my first report on airlines in May 1982, on Braniff International Airways’ first bankruptcy filing. This led to 26-year-old airlines and
I wrote my first report on airlines in May 1982, on Braniff International Airways’ first bankruptcy filing. This took 26 years to cover airlines and similar topics in Fort Worth Star-Telegram and USA TODAY. I have followed the industry in the total arc of deregulation: expansion, disruption and consolidation. I have also written two books on the subject: American Eagle: The Ascent of Bob Crandall and American Airlines, published in 1993, and (with co-author Ted Reed) American Airlines, US Airways and the creation of the world’s largest airline, published in 2014. Today, I exercise my own corporate consultant and paintings as a freelance journalist spanning aviation, faith, travel, business, computer science, education and sports. I graduated from the University of Arkansas (Woo Pig Sooie!) And Southwestern Baptist Theological Seminary.