United and JetBlue Can Help Each Other — If Regulators Let Them

by Thomas Black of Bloomberg News, 5/31/25

You have to give credit to JetBlue Airways Corp. for doggedly pursuing a deal to expand its scale. The money-losing airline tried a Northeast partnership with American Airlines Group Inc. and an acquisition of Spirit Airlines Inc. Both those agreements were shot down in federal court after being challenged by the Justice Department during the administration of President Joe Biden.

Trying again, the Long Island City-based airline announced on Thursday a partnership with United Airlines Holding Inc. to give JetBlue customers access to a much larger and sophisticated network. JetBlue is wagering the Justice Department under President Donald Trump will take a more favorable stance on airline deals. It’s a good bet.

Certainly, American Airlines and Delta Air Lines Inc. will oppose this partnership, called Blue Sky. The agreement will provide seven daily round-trip flights from United at John F. Kennedy International Airport beginning in 2027, a great deal for the Chicago-based airline because it’s now locked out of JFK. United mostly serves the New York area from Newark Liberty International Airport, whose capacity has been hobbled of late by a lack of air traffic controllers and system glitches.

JetBlue will gain eight flight timings at Newark under the deal, which is an interline agreement rather than a code share. This is important because interline means the two airlines will continue to market flights independently under their own brands, lowering the bar for regulatory approval.

Delta dominates at JFK with 35% of flights as of second-quarter schedules, Sheila Kahyaoglu, an analyst with Jefferies, wrote in a note on Thursday, followed by JetBlue at 26%, American at 14% and, again, United with none. United can also piggyback on JetBlue’s strength in Boston, where it has 24% of flights, just shy of Delta’s 28%, Kahyaoglu said. American has 14% of flights at Boston Logan International Airport; United trails with 7%.

The partnership will also give United customers a choice of about 90 flights that JetBlue operates between the Northeast and the Caribbean, including nonstop service to Aruba and Jamaica. Under the interline agreement, the airlines will offer each other’s flights on their webpages and apps and allow loyalty points to be earned and used.

This enhanced access for United to the Northeast, especially at JFK, and short-haul Latin America customers is a good deal. It’s no wonder that United’s stock rose nearly 2% on a day when the S&P 500 Index was flat.

JetBlue’s shares fell nearly 3%, indicating that investors see United as gaining the upper hand in the agreement.

JetBlue has been searching for ways to increase its reach as a way to return to profitability after annual losses since 2020. The airline continued to lose money in the first quarter as it seeks to cut costs and shrink capacity to match lackluster demand. The airline sold $3.2 billion of debt last year, including notes backed by its loyalty program, to shore up its finances and weather the losses. It also deferred deliveries of Airbus SE aircraft until the next decade to reduce capital expenditures by about $3 billion.

Unfortunately for JetBlue, the recent downturn of passenger demand has been weighted more heavily toward leisure travel and has hit the Northeast US harder than other regions — both of which are strongholds for the airline. Clearly, JetBlue had the weaker hand at the bargaining table with United.

Still, customers from both airlines will benefit from this agreement. United will offer passengers more choice when flying to the Northeast or taking a vacation to the Caribbean. JetBlue customers will gain access to United’s vast network and the perks of a full-service airline, adding that scale that it’s been pursuing.

The most strenuous objections likely will come from United’s two main competitors — Delta and American. They will argue that this stifles competition by giving United a bigger share of the Northeast market, where it lags. The ball is now in the court of the Justice Department and the Trump administration. If regulators are favorable to this interline agreement, then perhaps more will follow. If the deal is rejected, JetBlue will be back to square one on its pursuit of scale.

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Bloomberg News provided this article. For more articles like this please visit bloomberg.com.

United and JetBlue Can Help Each Other — If Regulators Let Them

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