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AA/JetBlue deal clear for take-off


The planned Northeast alliance of American Airlines and JetBlue has survived scrutiny by the Department of Transportation and will soon take to the skies, but with some DOT requirements attached.

The two airlines plan to feed passengers into each others' systems especially on New York and Boston routes, where they hope to compete more effectively with others, especially Delta. During the first half of this year, they will begin coordinating schedules and adding flights and routes, bringing some planes out of storage to do so. In particular, JetBlue will ramp up its flights to New York LaGuardia, where American is strong but Delta is the largest operator, and at Newark, where United dominates. There will also be increased codeshare opportunities.

On the other hand, the deal with DOT requires the airlines to shed some slots at JFK and at Washington/Reagan, and to refrain from cooperation in markets where they otherwise compete head-to-head without significant competition from other airlines. That especially applies to south Florida markets, where both airlines are currently adding cities in which they compete.

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The DOT requirement that they not cooperate in markets where together they do not have significant competition from others should keep that route competitive.

Boston-San Juan, on the other hand, has significant competition for JetBlue, especially with the ultra-low-cost carriers and no real AA presence; the two might be able to change that picture. On the Miami-San Juan route, AA looks dominant enough that it might benefit JetBlue, which is new to Miami.

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