The sixth largest U.S. airline, JetBlue Airways Corporation (JBLU) recently announced an interline partnership with Brazilian carrier, TAM Airlines (TAM).
Under the new agreement, JetBlue will now serve approximately 45 destinations in Brazil. Additionally, it can also connect flights to international destinations covered by TAM in South America like Asuncion, Paraguay, Buenos Aires, Montevideo and Santiago. Similarly, TAM Airline can connect passengers to several JetBlue destinations including Boston, Chicago, Hartford, Las Vegas, Los Angeles, Newark, San Francisco and Washington. Further, both carriers can engage in code sharing activities.
The partnership will also speed up and simplify ticketing and baggage check-in for JetBlue passengers, with a single ticket for combining flights on both carriers’ networks.
JetBlue currently enjoys only around one percent global market share and plans to expand its global presence through various interline partnerships, which are thereby a key strategy for its growth. JetBlue remains focused on expanding its partnership footprint to enhance its international service. Apart from TAM Airlines, the company also entered into partnerships with Icelandair and Qatar Airways in 2011, bringing its total number of alliances to 12. The company also expects to add a couple of partners more by this year end. We believe JetBlue’s open architecture partnership strategy with carriers bodes well for network expansion.
JetBlue seeks to leverage its advanced infrastructure to pursue additional partnerships with premium international carriers in order to drive network expansion, increased passenger count and revenue.
Hence, we are currently maintaining our long-term Neutral recommendation on JetBlue. However, the stock holds short-term (1–3 months) Zacks #4 (Sell) Rank.
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
TAM SA-ADR (TAM): Free Stock Analysis Report
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