JetBlue-Icelandair Plan Codeshare Pact, Approval Awaited

In order to forge ahead with its plans of increasing codeshare allies, low-cost carrier JetBlue Airways Corp. (JBLU) applied to the U.S. government for the approval of its bilateral codeshare agreement with Iceland carrier, Icelandair.

If granted, both the carriers will jointly gain access to the U.S. and Europe gateways. Icelandair’s seven connections between the U.S. and Reykjavik's Keflavik International Airport (KEF), will come under JetBlue 'B6' code. Moreover, eight additional routes from Icelandair's Reykjavik airport to Scandinavia and Continental Europe will also be accessible.

Likewise, JetBlue will use Icelandair 'FI' code on its flights to cover destinations beyond JetBlue's prime cities like Boston and New York to other cities in the U.S.

A codeshare deal allows sharing of flights, which implies that a passenger has the free will to avail any flight operated by either of the companies under the agreement, irrespective of the flight number.

The contract also provides extended and seamless connectivity between flights of the two carriers. Moreover, passengers of both the carriers will benefit from this deal by means of easy one-stop ticketing, more flying options and better baggage check-in facilities.

Airline partnerships help carriers enhance growth prospects through expansion opportunities without incurring heavy costs. Thus, the new agreement will help both JetBlue and Icelandair better their services by controlling costs and taking advantage of travel benefits.

Hence, we believe that these tie-ups with leading carriers will not only enhance flight offerings for passengers but also expand carriers’ networks.

JetBlue currently sports a Zacks Rank #1 (Strong Buy).

Better-ranked stocks in the airline space are Hawaiian Holdings (HA), Southwest Airlines Co. (LUV) and Alaska Air Group, Inc. (ALK). All three have a Zacks Rank.