Let me start by emphasizing that this is just a rumor, so I can’t personally vouch for this. However, it makes for an interesting discussion, if you ask me…
United reportedly interested in JetBlue
@xJonNYC is known for breaking a lot of news in the airline industry, and in recent days, he has shared a very interesting rumor. Specifically, he writes about how United is reportedly interested in JetBlue, either in the form of a merger, or buying assets, or something.
He’s not sure what exactly this would look like, but he’s confident that this is being analyzed internally, and even that some of United’s Star Alliance partners have been briefed about this topic, given how it could impact partnerships.
I have sources telling me UA is heavily looking at B6 — merger or buying assets or something else I’m not remotely sure at the moment.
— JonNYC (@xjonnyc.bsky.social) January 29, 2025 at 2:38 PM
so, as the hours tick by one looks for evidence to two things:
1. is the rumor credible (as in not just idle gossip or people just passing along low-level chatter,)
and
2. what is the likelihood that something will happen along the lines of the rumor.On point 2…
— JonNYC (@xjonnyc.bsky.social) January 29, 2025 at 8:49 PM
…I have no additional inkling or indication in any way as to if anything like this is considered likely to happen.
On point 1, however, I now have a great deal of confidence that this rumor is completely solid.
— JonNYC (@xjonnyc.bsky.social) January 29, 2025 at 8:49 PM
obviously the world’s focus will be very much elsewhere for a while, just noting that it’s my belief there may actually be a bit more oozing out about this (UA’s interest in B6.)
And kindly note at no time do I indicate that B6 is expressing this interest– this is all from UA’s..
— JonNYC (@xjonnyc.bsky.social) January 30, 2025 at 12:26 PM
.. perspective (at least that’s the extent of my knowledge on the subject anyway)
— JonNYC (@xjonnyc.bsky.social) January 30, 2025 at 12:27 PM
And, at this juncture, I feel there is ample evidence that some of UA’s Star Alliance partners have been briefed about UA’s interest in Jetblue
— JonNYC (@xjonnyc.bsky.social) January 30, 2025 at 6:32 PM
So again, the emphasis is on this being a rumor, and it’s anyone’s guess to what extent this materializes, if at all. After all, it could be that these discussions are happening internally, but don’t go beyond that. That being said, it’s always fun to discuss topics like this…
JetBlue would be a great fit for United
JetBlue is an airline that’s generally loved by passengers. There’s only one major issue — the airline struggles to make money (minor detail, I know!). Unlike some low cost carriers, JetBlue isn’t hemorrhaging money. However, the airline struggles to even consistently break even, despite having a strong market position in some major airports.
Several months ago, I wrote about how JetBlue could be an attractive acquisition target for several airlines. Specific to the United rumor, I can totally see how United would find value in acquiring JetBlue:
- We know that United has desperately been wanting to return to New York (JFK), but can’t get available gate space; JetBlue has a huge presence there
- We know that United has been looking closely at opening a hub in Florida, and JetBlue has a hub in Fort Lauderdale (FLL)
- JetBlue and United have largely complementary fleets, as JetBlue primarily has Airbus A320-family aircraft, which United also has; I’m sure United also wouldn’t mind adding Airbus A220s to its fleet, as they’re lovely planes
United as an airline is very much trending upwards. Not only is United now the world’s largest airline, but it’s increasingly in Delta’s league when it comes to profitability. There’s no denying that a JetBlue acquisition would not only help United become even more dominant in terms of size, but also give it access to the two markets it’s most hoping to expand to (JFK and Florida).
Now, I think it goes without saying that American would probably also be mighty interested in acquiring JetBlue, given that the two airlines had a Northeast Alliance, which was ultimately blocked by regulators under the Biden administration. JetBlue could greatly help American in both New York (JFK) and Boston (BOS).
However, given the respective financial performance of United and American, I suspect the former would be in more of a position to win in any bidding war.
Would this deal get regulatory approval, though?
Of course a logical question would be whether an airline like United acquiring JetBlue would get regulatory approval. Under the Biden administration, we saw JetBlue try to acquire Spirit, only for the Department of Justice to block that, arguing it was important to maintain ultra low cost carrier competition.
I thought that was the wrong decision — in the meantime, Spirit has upended its business model, filed for Chapter 11 bankruptcy, and it’s anyone’s guess what the carrier’s future holds.
Of course I think it’s safe to say that the Trump administration will take a different approach to consolidation than the Biden administration did. Would this deal get approved? I mean, that goes beyond my area of expertise, though personally I wouldn’t be surprised if it were allowed…
That being said, call it a hot take, but I’m not sure more industry consolidation is a bad thing. And I’m not even sure United acquiring JetBlue would be bad. Why? Well, simply put, an airline can only afford to have tickets subsidized by shareholders for so long before something needs to change.
Specific to United acquiring JetBlue, let’s think about this for a second:
- This would be massively positive for JetBlue employees, who would be getting major pay increases, to align with United’s pay scales
- I’d argue that having a second major global airline with a hub in South Florida would be good news for consumers
- This would allow United to compete more aggressively against Delta in New York City (both at Kennedy and LaGuardia), and I’d say there’s consumer benefit there
- United is simply in a much better position to leverage JetBlue’s assets to turn a profit, especially given that airlines largely make money through their loyalty programs nowadays, and don’t actually earn that much flying passengers
- Fundamentally what’s important is that the airline industry maintains and grows capacity, and keeping airlines not making money alive doesn’t do a whole lot to forward that goal; I mean, just look at all the new aircraft deliveries that JetBlue has deferred
If United were to acquire JetBlue, I suspect it would be similar to Alaska acquiring Hawaiian, where the Hawaiian operation would go from money-losing to almost profitable overnight, due to simply better utilizing assets.
I think the reality that some people refuse to accept is that US airline tickets are essentially subsidized by credit card agreements. Even the most profitable airlines (Delta and United) have virtually non-existent margins if we’re going to compare passenger revenue per available seat mile to cost per available seat mile. Large airlines have the power to have much more lucrative loyalty programs, because there’s power in scale.
Bottom line
We’ll see if anything comes of this, but rumor has it that United is interested in JetBlue, in some form or another. I’m not surprised that United has this interest, given that the current management team wants to return to JFK Airport and open a hub in Florida, and both of those are areas where JetBlue could help a lot.
Now, if anything actually comes of this is a different story, but in the meantime, we’ll mark this as “developing,” and I figure it makes for an interesting aviation geek discussion.
What do you make of the prospect of United investing in JetBlue?
