United Airlines (UAL.US) is up almost 4% today after announcing a partnership with JetBlue. As part of the new project, called "Blue Sky," the companies will, among other things, offer customers the ability to purchase tickets for each other's flights and combine their loyalty programs. The collaboration is also expected to give United Airlines access to New York's JFK Airport in 2027, which the airline left in 2022.
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Create account Try a demo Download mobile app Download mobile appUnited Airlines has maintained stable net profit margins since Q2 2022. The results clearly show seasonality, with the first quarter being the weakest of the year. Source: XTB Research, Bloomberg Finance L.P.
This airline collaboration comes at a crucial time for both companies. JetBlue has been looking for opportunities to expand its operations and strengthen its position in the battle for market share against competitors. However, last year, when the company attempted to acquire Spirit Airlines, a U.S. court blocked the transaction. On the other hand, United Airlines has faced capacity issues at Newark Airport in New Jersey in recent weeks, resulting in planned flight cuts of 10%.
The cooperation, which enhances the capabilities of both airlines, could bolster their positions, and the merger of their loyalty programs might increase customer interest in each other's services. For airlines (especially in the U.S. market), benefits related to loyalty programs are a very significant factor shaping consumer choices, often leading to customer loyalty to a specific airline. This partially mitigates potential customer migration between airlines. Under the "Blue Sky" agreement, customers will be able to use their loyalty programs with both airlines to receive benefits like free baggage, early boarding, or selecting seats with extra legroom.
From a consumer perspective, this type of airline collaboration could simplify travel. However, it also carries the risk of potentially higher ticket prices. Airlines working together won't have as strong a need for price competition, which could lead to increased fares. Thus, this signal might be interpreted by the court as a potential threat to competitiveness. For now, the announced cooperation is set to begin in the fall, but both companies haven't provided additional details. The potential start of the collaboration could still be halted by a regulator's decision.
United Airlines shares are gaining in today's session, attempting to break above the upper limit of a short-term correction. Simultaneously, the chart shows a potential crossover of exponential moving averages, which could generate a potentially bullish signal. Source: xStation
