The Takeoff Episode 03: Why Team and Culture Matter for Travel Startups Sponsored This content is created collaboratively with one of our sponsors.
The gloves are off as American Airlines and JetBlue figure that competition is a higher priority than passenger convenience and cooperation.
Remember all that American Airlines-JetBlue merger talk when American’s merger with US Airways was in trouble?
All of that is such ancient history as American and JetBlue jointly announced today that the two airlines plan on ending their interline and reciprocal frequent flyer program accrual agreements.
[Update: The decision to scuttle the agreements came at the behest of American Airlines, says a source familiar with the situation.]
The interline pact enabled travelers to make connections between 26 domestic markets and 15 international destinations served by American from New York’s JFK and Boston Logan.
A JetBlue spokesperson says “the agreement was under-performing for both sides.”
American Airlines also weighed on the agreements’ demise.
“Through the merger with US Airways, American’s network along the East Coast provides greater connectivity and customer benefits and as a result, there is no longer a need to supplement our combined network coverage with the JetBlue agreement,” an American Airlines spokesperson said.
The two airlines gave no reason for the end of frequent flyer program reciprocity and the interline agreement, which enables passengers to purchase one ticket for connecting flights on the airlines.
But, the two carriers are increasingly at loggerheads as JetBlue won its bid for 12 slot pairs at Reagan National Airport (DCA) as part of the 104 slots that the combined US Airways and American were forced to relinquish as part of the their merger settlement with the U.S. Department of Justice.
The two carriers are also increasingly competing with Alaska Airlines in Seattle, and American may believe that it would be better off operating those flights on its own, says Wolf Research’s Hunter Keay.
“American’s merger with US Airways adds both hubs and routes that enable American to serve more cities, including the smaller northeast cities and the destinations in Florida and elsewhere covered by the code-share agreement,” says Henry Harteveldt, travel industry analyst for Hudson Crossing.
“JetBlue is a very nimble organization, and is always exploring opportunities for promotions that could help create incremental demand,” Harteveldt says. “American was less agile at the time and, from what I understand, got stuck in ‘analysis paralysis’ in responding to JetBlue’s ideas. As JetBlue added other airline partners, in spite of American’s size at JFK, American became a relatively small partner to JetBlue.”
JetBlue and American stated that starting March 10 neither airline would accept new interline ticket sales on travel with the other carrier, and that effective April 1 members of their respective loyalty programs would no longer accrue miles and points for travel on eligible routes operated by the other airlines.
Accruals already earned will not be impacted, the joint statement said, and “the two airlines are working together to ensure these changes have little impact to customers.”