American Airlines Seeks Air Supremacy in New York (With JetBlue's Help)
Anyone remember that little airline called American (AMR)? Those guys used to rule New York from a mighty perch, but in the last several years they've seen airlines hammer away. Continental (CAL) came at them from Newark while Delta (DAL) and JetBlue (JBLU) snuck up on them at JFK. Delta's most recent effort to swap slots in Washington for US Airways' slots at LaGuardia was just the last straw. American now wants New York back, in all its glory. How bad does it want it? It's even turning to its former enemy JetBlue for help.
It's not like American disappeared off the radar in New York. They continue to hold a healthy, very large share and maintain many lucrative corporate contracts. It's just that competitors grew quickly while American did not. Now it's time to brawl. There were a lot of things announced yesterday in American's bid to take New York, so let's rattle them off.
- American chose Art Torno to be the new Vice President of New York for the airline. This matches Gail Grimmett's function at Delta.
- American signed an interline agreement with JetBlue. It should be noted that this isn't a codeshare or a frequent flyer partnership, but passengers will be able to book some JetBlue domestic flights connecting on to American's international flights via Boston and JFK through American.
- American will get 12 new slot pairs at JFK for additional flights. In exchange, the airline gives JetBlue eight slot pairs at Washington/National and one at White Plains.
- American is adding flights from LaGuardia to Minneapolis, Atlanta (hello, Delta), and Charlotte using the 70 seaters with First Class and coach. There will be frequency increases on other routes as well.
- American will start flights from JFK to Ft Lauderdale, Indianapolis, Cincinnati, and Norfolk as well as increased frequencies elsewhere.
- American will renovate its LaGuardia facilities, and JetBlue plans to move its few LaGuardia flights over to join them.
- American is looking at an expansion proposal at JFK that would allow British Airways to move in with them.
- Lastly, American will talk about all this stuff by doing more marketing in the region, some in concert with New York City's marketing arm, including promoting overnight layovers in New York to boost local tourism.
The JetBlue angle is interesting. I guess if you can't beat 'em, join 'em. American worked for years to destroy JetBlue, but now they find that they can make a better ally in the fight against Delta. This partnership isn't very large yet, but that could always change. It's a very interesting time for JetBlue. They are part-owned by Lufthansa, so you would think that this would not be a good thing for them to be doing. If this goes any further, they may need to pick one vs the other, but that's a whole different story. Airlines make for strange bedfellows.
For American, this gives them more flights in New York on their own (via the slot transfer) as well as more feed for their international flights from the domestic interline agreement. I'm sure nobody is surprised that there isn't a single German city on the list. The domestic flights are also only on routes where the two airlines don't fly head-to-head. So it should help connect traffic between the two networks that can't be well-served by either today. Heck, American should get some benefit by riding on JetBlue's warm and fuzzy customer-experience coattails among NYC residents.
The icing on the cake? American's pilots, who will pretty much fight anything that management does, have said that they are "assessing various facets of this announcement to determine its impact on our pilots." How is that icing on the cake? They didn't outright oppose the deal just yet. Small victories, I suppose.
So to summarize, American is actually paying attention to New York and it's done messing around. It's time to brawl, and they're diving in head first.