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American Airlines Partners JetBlue to Boost Connectivity

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In a bid to expedite the recovery process from the coronavirus crisis, airline companies American Airlines (AAL - Free Report) and JetBlue Airways (JBLU - Free Report) announced a strategic partnership. The deal also aims to boost connectivity options for travelers in the Northeast through an array of new routes. Notably, airlines are looking for ways and means to attract passengers amid the coronavirus-triggered travel-demand woes.

The alliance allows both the currently Zacks Rank #3 (Hold) carriers to sell seats on each other's flights and share frequent flyer benefits. The codeshare agreement under the partnership permits JetBlue passengers to access more than 60 routes operated by American Airlines. Similarly, passengers of the latter can fly on more than 130 routes operated by the former.

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As a result of the above pact, passengers of either carrier can purchase tickets of connecting flights using one reservation. The contract also provides extended and seamless connectivity between flights of the two carriers. Moreover, passengers of both airlines will enjoy benefits like easy ticketing and better baggage check-in facilities.

Further, a codeshare deal enables sharing of flights, by dint of which 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 partnership also allows American Airlines to start offering international flights from New York to destinations like Tel Aviv and Athens. Meanwhile, JetBlue will gain access to more U.S. sites by teaming up with airline heavyweight American Airlines, which will help expand its services in the coastal markets from both New York and Boston.

American Airlines Warns of Potential Lay-Offs

The agreement apart, American Airlines was in news for its statement in a regulatory filing that suggests that it may furlough approximately 25,000 U.S.-based frontline employees. With a fresh spike in coronavirus cases in the United States and the resultant imposition of new quarantine rules on some places, the modest uptick in passenger demand (which the carrier was witnessing) is fading.

With no visible acceleration in demand, the carrier is facing the problem of overstaffing, which resulted in sending out the Worker Adjustment and Retraining Notifications. The furloughs effective Oct 1 or post that date, will be applicable to 2,500 pilots and 9,950 flight attendants among others. The job cuts may continue through the end of 2020.

With such a bleak-demand scenario gripping the entire airline industry, another Zacks #3 Ranked U.S. airline United Airlines (UAL - Free Report) recently warned of potential job losses beginning Oct 1. #3 Ranked player Delta Air Lines (DAL - Free Report) also dispatched similar notices to many of its pilots. Notably, US carriers including Delta, American Airlines and United Airlines are getting financial assistance under the CARES Act. As a condition for receiving this aid, they are prohibited from laying off employees until Sep 30.

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