Last year, two financially struggling US airlines that vigorously compete with each other in the Northeast, Florida and on transcontinental flights announced a partnership that covers the New York and Boston markets. This week, the first pieces of the American-JetBlue partnership fell in place.

American operates one the largest US airline hubs in Miami (in terms of of Revenue Passenger Miles -RAM), while JetBlue operates a large focus city in Fort Lauderdale and a smaller one in Orlando. JetBlue is also a major player in the Tampa, Fort Myers and West Palm Beach markets.

After a six month review by the DOT and DOJ, the Trump administration approved the partnership in its dying weeks. Rather than a full-fledged merger or even a revenue-sharing joint-venture, this is merely a code-sharing partnership and involved the divestiture of a limited number of slots at New York’s JFK Airport.

The clear target of the partnership is Delta Airlines, a more stable carrier that during the past decade consolidated its position as the top airline in New York. In fact, part of the motivation for the partnership beyond stopping both airlines hemorrhaging of cash short-term is that Delta has consolidated its position as the preferred airline for most corporate accounts in Manhattan over the course of the past several years. However, it is possible business travel never quite bounces back to pre-pandemic levels, but let’s assume for now it does. This partnership puts both American and JetBlue in a strong position to reclaim lost ground among business travelers and claim some new ones as well.

But if you view American and JetBlue as effectively one carrier now in New York, between Delta and the American-JetBlue alliance the two carriers would control over 80% of takeoff and land slots at BOTH New York’s JFK and LaGuardia airports. Boston is not a slot-controlled airport, but in terms of market share, the three airlines account for close to 70% there.

For their part, Delta has been very public claiming this is effectively a back-door merger and they now have two weaker competitors colluding to take them down. For its part, regulatory authorities did not find this to be the case and I personally had laughed off those claims as hysteria from Delta. But as we will get to later, maybe they did have a point?

Fort Lauderdale-based Spirit Airlines, who flew the fifth most passengers domestically last year filed a complaint regarding the partnership with the DOT in early January that was supported by Southwest Airlines, the nation’s 3rd largest domestic carrier. To this point the DOT has not acted on Spirit’s complaint.

It may not be a monopoly but it’s clearly a duopoly which likely does not suit Delta who previously had the competition divided. However, you could also argue that Delta’s superior network at both JFK and LaGuardia gave it a built-in semi-monopolistic advantage over every other carrier whose New York operations are largely piecemeal compared to Delta and whom absent another airline collapsing can never acquire enough slots to challenge Delta effectively at either airport.

Anyway, let’s discuss how this partnership impacts Florida.

On Friday, American announced new nonstop service from New York-LaGuardia to Key West and Pensacola. Neither city is served by JetBlue from New York.

The partnership is fairly straight-forward in markets outside south Florida. Those markets which are largely Tier II markets from New York and Boston (outside of Orlando, but it’s worth remembering Orlando has significantly less business traffic than similar sized airports in the US, so it goes in Tier II in terms of potential pricing because of a lack of business travel) will see American and JetBlue cooperate and in most cases only one carrier fly the route. In most of those markets Delta is a competitor. American will put its “AA” code on JetBlue flights from New York to Tampa, Orlando, Jacksonville, Fort Myers and West Palm Beach as well as from Boston to the same cities. Similarly JetBlue will put its “B6” code on selected American flights from New York and Boston.

But where this gets complicated is southeast Florida. For starters, both American and JetBlue have their airline’s third largest hubs in the region at different airports. Secondly unlike flights to Tampa, Orlando, Fort Myers and West Palm Beach, where only one airline or the other flies the route, BOTH American and JetBlue will fly this summer nonstop to/from Boston and New York-JFK to/from BOTH Miami and Fort Lauderdale.

Since American and JetBlue have to still compete to fly passengers on their own metal, I had figured that because South Florida flights are the most lucrative domestic markets from New York outside of California, both airlines would be competing hard here.

I also assumed JetBlue entering Miami this month coupled with American resuming several long dormant routes from Fort Lauderdale (including the two in question) was a sign that while two airlines might be cooperating in the Northeast, they’re competing hard for both domestic and international passengers from South Florida. It also must be noted that since the airlines do not have an approved joint venture, instead just a codeshare agreement/partnership they cannot fix prices or share revenue in the same fashion American does with British Airways on transatlantic flights.

So everything was cool with me until I saw these items in the JetBlue press release:

New York and South Florida

• JetBlue will offer up to 27 daily flights.
• American will offer up to 20 daily flights.
• The combined 47 daily flights – with service between New York’s John F. Kennedy international Airport (JFK), LaGuardia Airport (LGA) and Newark Liberty International Airport (EWR) and Fort Lauderdale-Hollywood International Airport (FLL), Miami International Airport (MIA) and Palm Beach International Airport (PBI) – will provide customers with more than hourly service.

Boston and South Florida

• JetBlue will offer up to 14 daily flights.
• American will offer up to eight daily flights.
• The combined 22 daily flights – with service between Boston Logan International Airport (BOS) and Fort Lauderdale-Hollywood International Airport (FLL), Miami International Airport (MIA) and Palm Beach International Airport (PBI) – will provide customers with more than hourly service.

In addition this is in the American press release which I saw later:

Enhanced schedules in key markets

Customers will soon benefit from aligned schedules in key markets supported by the reciprocal codeshare. Beginning in April, American and JetBlue will offer more flights than any other carrier when they coordinate convenient schedules on the popular New York (JFK and EWR) to Los Angeles (LAX) route. Customers will have the most choices — 14 daily flights — between the two carriers and will have access to the state-of-the art Airbus A321T aircraft or JetBlue’s A321 aircraft featuring Mint. American and JetBlue will also provide enhanced schedules between the following markets:

Origin	Destination
BOS	Fort Lauderdale (FLL)
BOS	MIA
BOS	Washington, D.C. (DCA)
BOS	West Palm Beach (PBI)
LGA	BOS
LGA	DCA
New York (JFK and EWR)	Fort Lauderdale (FLL)
New York (JFK and EWR)	LAX
New York (JFK and EWR)	MIA
New York (JFK and EWR)	San Francisco (SFO)
New York (JFK and EWR)	West Palm Beach (PBI)

First off, the number 47 daily flights on New York-South Florida is eye-popping but keep in mind that involves three major airports on the New York end and two major airports in addition to a smaller third airport (West Palm Beach which is not classified as a major airport by the DOT) on the South Florida end. This dwarfs the offerings from Delta (which before COVID flew nonstop from both LaGuardia and JFK to all three South Florida airports but has already withdrawn West Palm Beach to JFK service permanently). It should be noted Ultra-low cost carriers Spirt and Frontier fly from Fort Lauderdale and Miami to New York, which can undercut fares

Secondly, it appears in the top markets from New York, which are Boston, Los Angeles, Miami/Fort Lauderdale and San Francisco, American and JetBlue are at the very least coordinating schedules if not outright colluding – which was what Delta was very publicly concerned about in their pushback on this arrangement.

But it can be argued even if they are coordinating schedules to the Northeast, American and JetBlue will still fight for passengers with one another to Miami and Fort Lauderdale. Not only is neither airline withdrawing from its own nonstops to Boston and New York, but signs indicate competition elsewhere.

JetBlue recently placed its premium business-oriented Mint product which has been uber-successful between Fort Lauderdale and Los Angeles and San Francisco to Miami, beginning new nonstops to Los Angeles last week. American retaliated by resuming Fort Lauderdale-Los Angeles nonstops that were terminated in 2013 as well as resuming Fort Lauderdale to Port-au-Prince service, a market which has been dominated by JetBlue since American withdrew from it four years ago.

American’s strong Latin America and Caribbean network from Miami competes with JetBlue’s large Fort Lauderdale international operation.

At this point it’s hard to know whether this arrangement will be a boon for consumers or lead to a lack of competition.