Here's why the American Airlines-JetBlue alliance sends aviation back to the future:
Approaching and following deregulation in the late 1970s, airlines reshaped their networks around nationally-connected mega-hubs. Rather than count on competitors to provide the short-haul flights necessary to feed their international routes, major airlines increasingly took control of regional operations, either through wholly owned subsidiaries such as American Eagle and ExpressJet, or through long-term capacity purchase agreements with regional carriers.
By taking control of their own connecting networks, United and other major airlines can provide a seamless product for customers. They can coordinate schedules, align the product experience and, of course, retain more of the passenger revenue. With those goals in mind, big airlines in the U.S. and Europe have spent years building networks with captive regional airlines.
A scenario similar to the AA-JetBlue scenario could develop at other hubs, especially during the downturn when many airlines are looking to rationalize capacity. For example, at Paris, Toronto and Mexico City, among others, the major long-haul carriers duplicate many routes that are flown by low cost carriers. In some cases, it would be more economical to codeshare on a single flight instead of operating wingtip-to-wingtip.
Second, airlines need to coordinate operations to deliver a seamless product. It should not be on the customer to figure out where to check in, or how to sort out flight delays on the fly. From the customer’s perspective, if someone bought a ticket on American, they should be able to follow American’s rules about baggage. That is one reason why so many procedures were harmonized among airlines prior to deregulation, when interline itineraries were common.
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