JetBlue and United Airlines announced an alliance that expands both airlines' reach and offers new options for members of their mileage programs.
The United-JetBlue pact gives United a foothold into John F. Kennedy International Airport while JetBlue gains more access to Newark Liberty International Airport. JetBlue will provide United with access to slots at JFK for up to seven daily round-trip flights. JetBlue will have more flights out of Newark.
Members of United's MileagePlus and JetBlue's TrueBlue will be able to book flights and earn miles across both loyalty programs, and take advantage of those plans' perks. The two airlines will also offer flights on each other's websites and apps.
The United-JetBlue alliance, called Blue Sky, still requires regulatory approval.
The agreement comes as some airlines cut capacity in response to slackening demand. In its first-quarter earnings report in April, United said it would cut domestic capacity growth beginning in Q3. The airline also plans reductions in off-peak flying on lower-demand days.
The moves followed Delta Air Lines, which cut capacity growth due to economic uncertainty and the trade war.
United-JetBlue Deal's New York Impact
The United-JetBlue alliance also gives United some relief in its New York-area operations, after the carrier reduced some flights out of Newark, an airport plagued with air traffic control and technology problems. Runway construction also has hindered operations.
United CEO Scott Kirby said the company is "excited about United's return to JFK for the longer-term." United withdrew from JFK in 2015, where it had been losing money.
"United's global reach perfectly complements JetBlue's East Coast leisure network, and significantly expands the options and benefits for TrueBlue members, no matter where in the world they are traveling," JetBlue CEO Joanna Geraghty said in a statement.
JetBlue reshaped its strategy after a federal court blocked its proposed merger with budget carrier Spirit Air last year. The airline refocused on its core business of leisure travel and services in the Eastern U.S. It also added first-class seats.
Shares of JetBlue rose as much as 6.7% in early trading but reversed 3% lower an hour into the session. The stock has been trading below the 200-day moving average since March and is down 36% so far this year. It has a 26 Composite Rating.
United Airlines stock rose 1.7% and climbed back above the 200-day line. Shares are down about 19% year to date. Its Composite Rating is 79.
IBD's airlines industry group rose 1.7%, among the 12 best-performing of 197 industry groups Thursday.
