The sixth largest U.S. airline, JetBlue Airways Corporation (JBLU) recently announced its interline partnership with Korean Air, the largest airline of South Korea.
The agreement becomes effective from this week onward, allowing passengers to book tickets for a combined travel on JetBlue and Korean Air from JFK International Airport, Washington Dulles International Airport and Los Angeles International Airport.
The new agreement will support JetBlue’s expansion plans to tap potential opportunities in the Asian market via Korean Air’s strong network. Korean Air operates daily, nonstop flights from New York, Washington and Los Angeles to 12 Korean cities, more than two dozen Chinese cities, and most major cities in Asia Pacific including Bangkok, Beijing, Hanoi, Hong Kong, Manila, Singapore, Shanghai, Tokyo and Taipei. Further, the carrier remains the first to offer flights between East Asia and New York on its newly added fleet of Airbus A380.
JetBlue currently has a 1% share in the global market and plans to expand its presence through various interline partnerships. Therefore, airline partnerships are a key strategy to the company’s growth prospects. Partnerships will also help to enhance its international service and enjoy travel benefits.
Apart from Korean Air, the company entered into partnerships with premium airlines like Jet Airways, Icelandair, Qatar Airways and TAM Airlines in 2011, bringing the total to 13 airline partners. We believe JetBlue’s open architecture partnership strategy with carriers bodes well for its network expansion and provide competitive advantage over its peers like Delta (DAL), Southwest and United Continental (UAL).
JetBlue seeks to leverage its advanced infrastructure to pursue additional partnerships with major international carriers in order to drive network expansion, increase passenger count and revenue.
We currently maintain our long-term Neutral recommendation on JetBlue, supported by a Zacks #3 Rank (Hold).
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