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In JetBlue-United deal, what does each airline stand to gain?
The newly announced partnership between United and JetBlue will certainly open opportunities for members of the two carriers' loyalty programs. But foreseeing how the deal will impact airline competition in the New York area and the broader Northeast is a more complicated matter.
The companies said on May 29 that they reached an agreement to provide reciprocal loyalty point accrual and redemption as well as reciprocal loyalty status privileges, such as early boarding, upgrades and free bags for United's Mileage Plus and JetBlue's TrueBlue members.
Flyers will also be able to book United flights through JetBlue channels and vice versa.
In another key part of the deal, JetBlue will trade arrival and departure slots at capacity-limited JFK to United in exchange for increased access at Newark, which would facilitate United's much sought-after re-entry into JFK.
United expects to begin flying up to seven daily roundtrips out of JFK in 2027, while JetBlue expects to gain eight additional daily flights at Newark. The airlines have not announced a launch date for the partnership, which they are calling Blue Sky, but said some components could begin as soon as the fall.
Better for United than JetBlue?
Airline industry analyst Gary Leff, who pens the View From the Wing blog, said he views the deal as a victory for United, less beneficial to JetBlue and a loss for consumers in the New York area.
The partnership will strengthen United, Leff said. It was already the largest airline in the New York metroplex last year in terms of seats flown, slightly eclipsing Delta's seat count, and will now offer customers access to JetBlue, New York's third-largest carrier.
Another win for United: JetBlue will have less opportunity to partner with other significant Northeast players.
Leff argued that JetBlue's brief Northeast Alliance with American in the New York area and Boston was better for consumers than this arrangement, since together American and JetBlue were big enough to compete with United and Delta.
"It created a third strong competitor rather than just having a stronger United," Leff said.
The Northeast Alliance was broken up by antitrust regulators at the Justice Department in 2023. In the ruling that ended the partnership, U.S. district judge Leo Sorokin objected to the breadth of the arrangement, which included codesharing, extensive revenue sharing and joint scheduling of most flights out of New York and Boston.
But Sorokin also said in the opinion that a more limited partnership might have been allowable. The United-JetBlue partnership takes heed of that ruling.
The carriers won't codeshare, relying instead on an interline agreement for cross-airline traffic. United and JetBlue will continue to publish and market flights separately under their own brands and flight numbers, and there will be no revenue sharing or joint scheduling.
For United, re-entry at JFK is a key element of the deal. It last operated there in 2015.
Leff said that the seven daily landing rights that United would get at JFK are significantly more valuable than the eight additional daily flights that JetBlue expects to gain at Newark. He speculated that more elements of the partnership benefiting JetBlue are likely on the horizon, including potential entry of the carrier into the Star Alliance.
Industry analyst Brett Snyder, however, said that JetBlue would gain plenty from the partnership. In particular, JetBlue, and members of the TrueBlue loyalty program, will benefit substantially from access to United's massive route network. United offers more than 200 global destinations not served by JetBlue.
That means TrueBlue members will be able to earn and burn points on trips to far-flung locations like Tahiti, but at least as importantly, to domestic destinations like Omaha and Boise, Snyder said. That increased breadth will be particularly attractive to people with Mosaic loyalty status in the TrueBlue program, who will be able to enjoy loyalty status privileges across the United network.
Conversely, Mileage Plus members will be able to earn and redeem points on JetBlue's extensive Northeast-Caribbean network and 15 total destinations that United does not serve.
Impact on New York and Boston
As to how the Blue Sky partnership will impact the competitive landscape in the Northeast, Snyder said it will be nuanced. Within the New York area, he expects it to have the most impact on already weak American, against whom JetBlue will have new tools to compete. He does not expect much impact on Delta.
"Delta is already the 800-pound gorilla at JFK and LaGuardia," Snyder said, noting that United's JFK offering will be tiny by comparison.
Snyder opined that competition overall will be boosted on the New York side of the Hudson River, because United and JetBlue will have a more attractive offering with their loyalty partnership than they did separately. At Newark, where United dominates, Snyder doesn't expect much competitive impact.
Meanwhile in Boston, where JetBlue and Delta are the largest carriers, the loyalty partnership should give United a boost, offering its corporate customers Mileage Plus point accrual, redemption and loyalty status perks on approximately 130 daily JetBlue flights.
