Wednesday, March 31, 2010

American, JetBlue Hook Up in Northeast
By Ted Reed 03/31/10 - 09:46 AM EDT

NEW YORK (TheStreet) -- American(AMR) moved Wednesday to buttress its hub at New York's Kennedy airport, signing a deal to get both connecting traffic and a dozen slot pairs from JetBlue(JBLU).

In return, JetBlue gets a dozen slots at Washington's Reagan National Airport, a key Northeast airport where it does not currently fly. JetBlue now has three separate efforts underway to build a presence at National.
In a time of intense airline industry deal-making, this agreement offers vast advantages for both carriers. The slot transfers require regulatory approval.

American has been under assault in New York from Delta(DAL), which has a bigger hub at Kennedy and is seeking to build a second hub at LaGuardia airport. American would get a bigger presence at Kennedy, with feed from the airport's biggest domestic carrier, as well as more feed at Boston Logan.

JetBlue, already the biggest domestic carrier at Kennedy and Boston Logan, would get entree to National. Starting in November, it will offer at least eight daily departures to East Coast destinations it has not yet named. "We are thrilled to finally be entering the DCA market," said Robert Land, JetBlue senior vice president of government affairs, in a prepared statement.

JetBlue stands to gain additional slots at National if a pending slot exchange deal between Delta and US Airways(LCC) is approved. In that deal, Delta would trade slots at National for slots at LaGuardia. To satisfy regulators, the two carriers have proposed spinning off slots at both airports to four low-fare carriers.

Moreover, JetBlue said Wednesday that it has petitioned the Federal Aviation Administration for access to unused slot pairs in the early evening and late evening.

The American/JetBlue deal also involves a relationship at Logan, where JetBlue domestic passengers will connect with American's international flights.

Additionally, American will transfer a slot pair at White Plains, N.Y. to JetBlue. The carriers say they are also exploring "other commercial cooperation." Terms of the slot transfers were not disclosed.

"Our successful transition to Sabre, along with our new Terminal 5 at JFK and growing presence in Boston, have positioned us to take advantage of important partnership opportunities," said JetBlue CEO Dave Barger, in a prepared statement.

Added American CEO Gerard Arpey: "This new agreement with JetBlue complements our domestic and international network."
-- Written by Ted Reed in Charlotte, N.C. .