It’s been announced that jetBlue and Emirates will have an interline agreement functioning through JFK airport and within the next few days, it will be possible to buy thru passage to destinations between the two airlines.   JetBlue has been arranging and aligning itself with a number of airline partners through this type of agreement and Emirates makes the seventh such agreement.  American Airlines was announced just a few months ago and jetBlue has been enjoying an arrangement with Lufthansa (a major shareholder with seats on the board) for some time now.

CEO Dave Barger has described this as an open architecture and that means they are doing deals with whoever it makes sense to do a deal with.  The problem is the potential for conflict among the various partners.  For instance, one can only imagine how amused Lufthansa was to learn of this since their CEO has been a vocal critic of the advantages that Emirates enjoys in international travel.  

This isn’t exactly new.  Alaska Airlines has been engaged in similar practices with a variety of partners both domestic and international for years.  In Alaska Airlines’ case, it’s made sense and worked to a fair degree although in part because Seattle, it’s hub, is not a hub or really a focus city for anyone else.   However, over time, Alaska did business with so many partners who were competing with each other individually, it began to annoy some.  For instance, AA has been gradually drifting away from its partnership with Alaska and Delta has been strengthening this partnership.

Ultimately, Alaska has found that it really does, in a sense, have to dance with the partner who is making a difference to their bottom line. Of late, that’s been Delta and when one airline substantially bigger than you starts contributing significant revenues to your balance sheet, it is only a matter of time before it starts conditioning those results upon receiving certain concessions.

JetBlue sees opportunity and there is opportunity at present from all of its partners.  However, over time, someone is going to start making a bigger difference to the bottom line than someone else.  Emirates has great potential for this as does American Airlines.  Just between AA, Emiratese and Lufthansa, you have two airlines aligned with different alliances and one airline who isn’t but who knows how to provide massive long haul feed.  The potential for conflict is huge in the future.

Maintaining some kind of balance between its partners is going to be key to keeping this open architecture.  Like any business, dependence upon one partner can lead to inequalities that drive your business in directions you never wanted to go in.  The size of airlines that jetBlue is partnering with indicates just how massive that potential is and no one should ever make the mistake that a huge airline won’t one day decide to use its influence to diminish the influence of other airlines its competing with. 

Frankly, I think it benefits a small airline to pick a dance partner and stick with it.  If jetBlue wanted to enjoy feed from other airlines, it would have been better served to have chosen an alliance and worked within its system where there is some understanding that picking apart a partner is counterproductive.  Under the current model, no one partner has any great incentive to remain loyal if the competitive environment evolves.

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