Great job guys. All that scope language and AA is still selling seats on a subcontracted airbus.

 

Couple things: AA can sell a ticket on a JB flight, but AA doesn’t keep really any revenue from that flight. All the arrangement does is keep more customers in the AA ecosystem by expanding the network and relevance. So there isn’t a lot of upside to AA dumping flying and having JB (or AS on the west coast) fill in the gaps...it’s just a means to keep network relevance where they haven’t been strong organically. It isn’t the same as when AA sells a ticket on an RJ where they keep all the revenue. In that RJ arrangement, it’s contracted out to someone who can do it cheaper. In the JB arrangement, it’s partnered flying to significantly expand each of their networks.

Pre-covid, in the only 2 markets in which the codeshare exists (NY/BOS), JB was 2.5x the size of AA at JFK and almost 2x as large in BOS in terms of passengers. This is more of a play to increase relevance for their network...same as AS on the west coast. If Vasu and Doug could have done it organically they would have...they stand to gain a lot more doing it that way.

 

Regional flying isn’t going away just regional carriers. There isn’t demand to support all of them, just most of them

and a 200 seat a320 won’t replace 76 seat rj’s plenty of solid regional markets left

 

Although Virgin Atlantic might go away

 

Problem is after JetBlue was LCC has a premium
product? I doubt Delta hooks up with spirit or frontier. AS just joined one world and has already been burned by Delta once who do they link up with?

 

Alaska is already partnered with AA

 

How long until international travel comes back, if ever? Almost seems the powers that be don’t want the masses roaming around the globe at will. I can see these travel quarantines taking ahold (Not just for COVID) and being with us for the foreseeable future.

 

I think that is a key difference as well. jetBlue has a nice product. Spirit, Allegiant and Frontier really don’t. Although the network carriers have tried hard to emulate that ‘steerage class’ product with basic economy.

 

Once societies get somewhat accustomed to all of the social distancing/mitigation measures, and governments implement robust traveler screening and contact tracing programs it should open up some, or at least be allowed. But allowed is not the same as people buying tickets in droves. Probably need a vaccine(s) and some time to show that it's working... I'm optimistic that covid will just be a bad memory in a few years.

 

Yeah this. Germany is already trying to set up a program for people to enter from anywhere. I also think a treatment is key. If these antibody cocktails work I think things open faster than once there are enough doses. As getting it won’t be a big deal and once a vaccine is rolled out they will complement it for the ones the vaccine fails to protect.