July 16, 2020 / 12:34 PM / 19 days ago

American, JetBlue team up to boost New York flying and drive recovery

CHICAGO (Reuters) - American Airlines (AAL.O) and JetBlue Airways (JBLU.O) said on Thursday they were forming a strategic partnership to boost flying options in New York and Boston and create what executives called a “growth engine” to recover from the COVID-19 pandemic.

FILE PHOTO: American Airlines 737 Max passenger planes are parked on the tarmac at Tulsa International Airport in Tulsa, Oklahoma, U.S. March 23, 2020. REUTERS/Nick Oxford

The deal, which allows the two carriers to sell each other’s flights and link frequent flyer programs, gives them more muscle against rivals United Airlines (UAL.O) and Delta Air Lines (DAL.N) in the Northeast at a time when carriers are preparing to downsize and cut jobs.

It makes American “a more-powerful player in the country’s economic center,” said Scott Mayerowitz at the Points Guy, helping it to fill international flights and compete for lucrative corporate contracts without investing in a network of domestic routes.

For starters, American will use the partnership to feed traffic out of New York (JFK) to international destinations including Tel Aviv, Athens and Rio de Janeiro in 2021.

That will increase nonstop flying options to Israel, where before the pandemic United was offering twice daily service from Newark and Delta daily from JFK. Struggling Israeli carrier El Al Israel Airlines (ELAL.TA) was flying out of JFK and Newark but has suspended all flights through August and is negotiating a government bailout.

JetBlue, which has similar partnerships with other airlines but whose expansion aspirations have suffered from space and government limitations in New York, will add flights at all three New York area airports including its home base, JFK.

“This allows us to recover more quickly,” Scott Laurence, JetBlue’s head of revenue and planning, told Reuters. “It means that airplanes that would otherwise have been in a desert, they’re going to be flying and generating revenue.”

Discussions began before the coronavirus pandemic nearly ground the aviation industry to a halt this year, but accelerated as a result of the crisis, he said.

The deal - subject to governmental review - will help American, which has a significant presence across the middle of the country, gain relevance in New York and Boston, said American’s chief revenue officer, Vasu Raja.

It follows American’s revived partnership with Seattle-based Alaska Airlines ALKAIR.UL in February to boost expansion opportunities out of the West Coast.

Alaska is due to join the oneworld alliance led by American and British Airways by summer 2021, but JetBlue is not joining and still plans to independently launch and operate transatlantic flights to London in 2021.

Reporting by Tracy Rucinski. Additional reporting by Steven Scheer in Jerusalem. Editing by Gerry Doyle and Tom Brown

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