Breaking the Connection: American Airlines, JetBlue Sever Agreement

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Frequent fliers are now navigating the new conditions that spurned from American Airlines’s merge with US Airways in December to form American Airlines Group (NASDAQ:AAL). According to Reuters, American Airlines and JetBlue Airways (NYSE:JBLU) are severing an interline agreement that allowed customers to buy connecting flights on each other’s planes on one ticket.

The two carriers said in a statement this week that American Airlines and JetBlue will not accept new interline ticket sales with each other starting Monday, and customers using their reciprocal frequent-flyers programs will no longer earn miles or points when traveling on eligible routes, effective April 1.

Air travelers are expected to be disappointed that they can no longer mix and match their flight connections between American and JetBlue, considering the two parties’ interline agreement made it easier for fliers to reap the benefits of convenient ticketing and frequent-flyer programs. However, American Airlines maintains the belief that thanks to its merger with US Airways, the newly minted company no longer needs JetBlue to help it satisfy its customers’ needs.

American Airlines’ spokesman Casey Norton explained in an email written to Reuters, “Through the merger with US Airways, American’s network along the East Coast provides greater connectivity and customer benefits and there is no longer a need to supplement our combined network coverage with the JetBlue agreement.”

American Airlines and JetBlue initially decided to secure their interline agreement because it helped both parties offer more destinations without making large investments. It was especially helpful for American Airlines that about 80 percent of JetBlue’s operations take place in the U.S. Northeast. Before its merge with US Airways, the carrier had an inadequate amount of operations supporting the East Coast. After joining forcers with US Airways, American Airlines maintains that its business is fine without JetBlue, although some analysts still believe a continued truce wouldn’t hurt either party.

JetBlue will still maintain similar partnerships with around thirty other carriers. According to Reuters, despite its separation from American Airlines, JetBlue still expects its unit revenue, a measure of passenger revenue per available seat mile, to rise 1 to 2 percent in the current quarter, and the New York-based company isn’t worried about the health of its business in the future.

American Airlines shares sat down 0.18 percent at $38.95 as of 2 p.m. Eastern on Monday, while those of JetBlue were down 1.94 percent at $8.85, following the two companies’ statement. The carriers also explained this week that All American Airlines’ “AAdvantage” miles or JetBlue’s “TrueBlue” points already accrued through this partnership will be credited to customers’ accounts and will not be affected.

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