JetBlue and American prepare for new rendezvous in New York

Washington DC
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Oneworld carrier American Airlines' slot swap and interline deal at New York JFK marks the latest move in the evolving chase game surrounding the New York market. The agreement entails American transferring eight slot pairs at Washington National airport and a single slot pair at White Plains, New York to JetBlue, and the low-cost carrier turning over 12 slot pairs at its JFK hub to American. At the same time the carriers signed a unique interline tie-up between a US major airline and low cost carrier covering 18 domestic markets served by JetBlue from Boston and JFK, and 12 of American's international flights from the two airports.

MIT airline researcher William Swelbar sees the move both as both an offensive and defensive strategy for American in the New York market. With the potential slot swap with Delta and US Airways at LaGuardia and Washington National and Newark becoming a major Star Alliance gateway through Continental joining the airline grouping, "JFK is now critically important to American and oneworld", says Swelbar. If US Airways and Delta manage to convince regulators to approve their deal, Delta aims to make LaGuardia a domestic hub.

 
New York is a key market for many US majors as they continue to adopt a singular focus on their largest metropolitan hubs. Data from the US Bureau of Transportation Statistics show Delta was second behind JetBlue in market share at JFK in 2009 at roughly 20%. American held the third spot with a market share of 14%. With JetBlue holding the top spot in terms of market share at JFK with roughly 42%, it is little surprise that American chief executive Gerard Arpey said during a recent meeting of all the oneworld chiefs that interest was expressed by other airlines in the grouping to partner with JetBlue to access its domestic feed from JFK.

A deepening of ties between American and JetBlue is also highly likely as the carriers hint at a possible reciprocal frequent flyer agreement. Swelbar predicts a gradually evolving tie-up between American and JetBlue that could eventually grow into a codeshare type of relationship. JetBlue chief executive Dave Barger is signalling the relationship could grow beyond the low cost carrier's current arrangement with American. At the time they unveiled their slot swap and interline agreement, Barger was pressed if the partnership was a precursor to JetBlue joining oneworld. He responded by saying both carriers are open going forward as they look at their collaboration and partnership.

Swelbar says JetBlue is in an enviable position to leverage its position at JFK to forge agreements with multiple partners to include unaligned carriers, or at some point join an alliance. JetBlue already has ties to Star alliance member Lufthansa, which holds a roughly 19% stake in JetBlue. The two carriers began introducing their own codeshare deal in late 2009. Multiple options are available to JetBlue, says Swelbar, who says at this point the airline could opt to join an alliance or shun a global airline grouping. But in the short-tem the new deal between American and JetBlue is borne from preserving and growing at JFK. Swelbar believes the new deal allows the carries to put a marker down in the marketplace and "have the responsibility to respond to the next step [in the New York] market".

Click here to find out more about how low-cost carriers have fared so far in fulfilling their codeshare ambitions