Delta Air Lines and LATAM are working with the United States Department of Transportation (DOT) to receive permission for an immunized joint venture. As part of this process, airlines and industry stakeholders are invited to comment, and JetBlue has noted some of its concerns. While the airline has concerns over access at congested airports in South America, it notably wants to keep its interlining relationship with LATAM intact and wants the DOT to mandate it.
JetBlue wants to keep the interlining partnership with LATAM
In a filing with the DOT, JetBlue noted that it currently has an interlining partnership with LATAM. This partnership has been in place since 2011. Interlining is not as extensive as codesharing. In an interlining agreement, it allows the two airlines to create multi-airline itineraries and have through-checked baggage, though, unlike codeshare agreements, airlines do not put their codes on each other’s flights.
JetBlue called LATAM an “anchor in South America for JetBlue’s independent, non-aligned partnership strategy.” As a result, it wants the DOT to include a condition requiring LATAM to maintain its interlining agreement with JetBlue. This is something the DOT has included in other agreements, such as the proposed Delta-WestJet approval that those two airlines did not move forward with over mandated slot divestitures.
JetBlue did note that it has a partnership with American Airlines under the Northeast Alliance, which is a codeshare agreement, that includes travel from New York (JFK) to key South American cities, namely Rio De Janeiro (GIG), Sao Paulo (GRU), Buenos Aires (EZE), and Santiago (SCL). However, JetBlue believes this partnership complements what the airline has in place with LATAM.
JetBlue noted that pre-crisis, it was connecting nearly 100 customers a day to LATAM flights, mainly through JFK. However, with JetBlue’s entrance in Miami (MIA) during the crisis it opens up additional connecting opportunities, though the airline did not reveal what current connection statistics between JetBlue and LATAM look like.
JetBlue shares its concerns over airport access
While JetBlue currently does not operate long-haul services into deep South America, it states that it is looking to “serve these markets in the future” once it gets more long-rwange aircraft that can go the distance. However, it brought up its longstanding slot issues in London as something it believes the DOT should consider with the LATAM-Delta JV. JetBlue urged the DOT to monitor anti-competitive conditions and respond if the airlines work to block new entrant carriers in markets.
It also connected London, especially Heathrow (LHR), a perennial region with slot access issues, to the Delta-LATAM JV. More pointedly, the airline took aim at the LATAM-Virgin Atlantic codeshare agreement that it believes will render LATAM “unlikely to ever sell or lease unneeded LHR slots to any carrier outside of the Delta-Virgin Atlantic orbit.” JetBlue has secured slot access at Heathrow, though it does not have a permanent position at the airport, which it is seeking.
JetBlue has an eye on South America
It should be noted that JetBlue is making a very public indication that it has a lot of interest in South America for future growth. The airline already serves plenty of destinations in northern South America (including countries like Colombia and Ecuador), but it sees opportunities elsewhere.
Building up flying in marketplaces takes time, and in some cases, having partnerships with other airlines is a way for carriers to lay the groundwork to enter new markets, particularly new long-haul international ones. Essentially, JetBlue wants to ensure that it still has the ability to sell tickets to places in South America and make that option known to its customers, and it wants the DOT to enforce LATAM to keep its partnership with the airline.
It is unclear how the DOT will respond. While JetBlue has argued it gets benefits from the partnership, that does not necessarily mean that LATAM feels it gets the same benefit. The 100 customers per day connection statistic, in context, is relatively muted. The A220-300s at JetBlue seat 140 passengers, and the E190s seat 100, so essentially, JetBlue was only connecting one flight on its smallest aircraft in the fleet to LATAM’s network which LATAM might otherwise argue is not beneficial. Of course, the DOT will make the final determination, though LATAM may choose to respond before that.
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