American Airlines is eying a major expansion in the South American market. In a new plan, the carrier will purchase a minority stake in low-cost Chilean carrier JetSMART and greatly expand offerings across the continents. The deal will allow passengers on both carriers to seamlessly travel the Americas, leveraging their respective networks. Let’s find out more.
In a statement today, American announced that it will grow its presence in the South American market through a new partner. The full-service airline will pick up a stake in JetSMART, an ultra-low-cost airline belonging to Indigo Partners’ group. The purchase is a part of a brand-new partnership and codeshare agreement, which will see a new mega-network between the Americas.
Under the proposed network from July 2022, American’s flights to Santiago will become a connecting point for dozens of domestic and short-haul international flights. The carrier serves Santiago from three of its hubs in New York, Miami, and Dallas-Ft. Worth. Smaller hubs would include Buenos Aries and dozens of other connections for passengers. Here’s a look at the route map.
Stay informed: Sign up for our daily and weekly aviation news digests.
American Airlines also highlighted another major benefit for passengers: the potential to earn miles. While JetSMART does not have its own mileage program, travelers on connecting flights will be able to earn and spend AAMiles, giving more incentive and creating “the best travel loyalty program in the Americas.”
The investment is a long-term strategy, with low-cost JetSMART looking to expand quickly and profitably in the near future. American is also committing to further funding in the coming years to support further development where possible.
The announcement was met with excitement at both airlines. In a statement, JetSMART CEO Estuardo Ortiz said,
“By connecting and growing our respective networks, and maintaining our distinct business models, we see a compelling value proposition. When completed, this proposed partnership would accelerate JetSMART’s path to becoming the leading South American low-cost carrier while expanding service for American’s customers.”
American has been making a concerted push to expand its presence in South America. Since last year, it deepened its partnership with Brazilian low-cost airline GOL to include frequent-flier reciprocity and several new routes. The move also comes as American tackles Delta’s dominance through its ownership stake in LATAM, the region’s biggest carrier.
GOL has also welcomed American’s latest investment, with CEO Paulo Kakinoff noting in its quarterly earnings call today,
“We have a very strong partnership with American. That movement is part of a plan to enhance its strong footprint in the region. It is also promising to all the partnerships because the stronger the American is in the region, the most attractive will be our offer. We welcome that movement of American Airlines investing in the region.”
Overall, the move today will be a big win for American Airlines’ and JetSMART’s passengers, providing a broader network and challenge to Delta’s dominance.
What do you think about American’s latest investment? Let us know in the comments!