The bold slot swap agreement between American Airlines (AA) and JetBlue is aimed squarely at Delta Airlines and their build-up of service in the New York area. It is a savvy move by American to dramatically increase its connections at JFK and it is a brilliant move by JetBlue to open up service to Reagan National in Washington. DC, and gain more domestic traffic.
Delta has just seen its competitive position from the New York area change dramatically. JetBlue has now become an official “feeder” airline for American Airlines’ international flights from JFK. As a feeder airline, Jet Blue offers AA the largest operation at JFK. You might say that AA has enrolled another collection of American Connection flights flying under the colors of JetBlue to feed its flights.
This feeder system works both ways. JetBlue now has one of the largest JFK international operations feeding its domestic network.
Back when JetBlue first set up its headquarters at JFK, the airport was underutilized for domestic operations. Some veterans claim that tumbleweed was blowing across the runways. Today, the airport has been rediscovered and is one of the busiest in the country.
JetBlue has been cagey in leveraging its JFK access. It has set up code-share flights with Lufthansa (a partial owner) and with Aer Lingus. Both of these operations are expected to continue and grow, since JetBlue has plenty of capacity to feed Lufthansa, Aer Lingus and AA.
From a business point of view, both American and JetBlue are coming out winners. Both airlines gain passengers and pick up valuable slots to power their business plans. This AA tie-up also provides JetBlue additional gravitas and influence in the airline world. Plus, it isolates Southwest from access to Washington-Reagan if the deals are approved by DOT the way they now stand.
From a passenger service point of view JetBlue’s entrance into the Washington-Reagan mix should mean a tempering of prices on routes served by JetBlue as they start operations next November. Passengers will also find more interlined routes spelled out on websites and reservation systems run by AA and JetBlue.
Possible drawbacks:
These slot swaps may have a negative effect from two points of view.
• After howling like wounded animals when the FAA attempted to institute slot controls at JFK, LaGuardia and Newark, the fact that the airline seem to feel their slots are “excess” may not sit well with regulators and advocates. Future claims of such slot importance may be seen as “crying wolf.”
• By securing eight pairs of slots from AA, JetBlue may make the acquisition of additional slots from US Airways via the Delta/USAir slot swap proposal more difficult. This may create an opening for Southwest. The slot swap with US Airways becomes even more important to Delta since this AA/JetBlue deal.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
