Chile’s Fiscalía Nacional Económica (FNE) has approved American Airlines' proposed investment in the local ultra-low-cost carrier JetSMART. This gives way to the launch of a partnership between both companies, the introduction of a codeshare agreement, and more.
Partnership approved
On December 22, 2022, the Chilean FNE, the entity responsible for defending and promoting competition in all markets or productive sectors of the Chilean economy, approved American Airlines’ minority investment in JetSMART. After a thorough investigation, the FNE announced that the partnership between both companies would not generate a negative impact on the commercial landscape in the country.
Neither JetSMART nor American Airlines currently have a partnership or operate codeshare agreements with other airlines in the country. In the past, American Airlines used to have a codeshare agreement with LATAM Airlines Group. However, Delta’s surprising investment in LATAM in 2019 forced American Airlines out and in need of a new partner.
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In July 2021, American Airlines and JetSMART signed a letter of intent. Both companies announced the launch of a partnership that would “uniquely tie together the full-service, global presence of American with the complementary network of ultra-low-cost carrier JetSMART in South America.” Through this alliance, the airlines would be able to grow aggressively and profitability across Latin America while preserving the best aspects of each carrier’s business model. JetSMART is an ultra-low-cost carrier backed by the specialized Indigo Partners fund. American is a full-service airline serving over 50 countries globally from the United States.
The amount American Airlines will invest in Chile’s JetSMART has not been disclosed. JetSMART provided Simple Flying with the following statement,
"We are very pleased with the approval of our alliance with American Airlines by the Chilean FNE's Office, as it is a significant step in this process that will move forward with its corresponding stages and will undoubtedly bring enormous benefits to our passengers, with a larger route network between the United States and South America, the lowest fares and the best travel loyalty program in the Americas. We believe this partnership represents a unique opportunity to leverage the strengths of the ULCC and network airline business models."
Codeshare agreement incoming
By approving this partnership, Chile’s FNE is giving way for both carriers to announce their new codeshare and interline agreements. The FNE said,
“Both parties are currently in the process of launching bilateral cooperation interline and codeshare agreements as part of their alliance.”
The future codeshare agreement would allow American Airlines to market more connections from Santiago de Chile International Airport (SCL), where JetSMART is based. JetSMART operates flights from Santiago to six South American countries (Argentina, Brazil, Chile, Colombia, Peru, and Uruguay).
Moreover, JetSMART also has commercial branches in Argentina and Peru, where it operates domestic and international services (JetSMART Peru was recently authorized to launch 22 new international routes from Lima, Cuzco, and Arequipa). JetSMART is also eyeing a new subsidiary in Colombia.
Both airlines are also looking to launch a frequent flyer program, according to Chile’s FNE.
JetSMART’s connectivity across South America
According to data by ch-aviation, JetSMART currently has a fleet of ten aircraft in Chile, including three Airbus A320ceos, four A320neos, and three A321neos. In Argentina, JetSMART operates eight aircraft, all A320ceos. Finally, in Peru, JetSMART has four A320neos. The airline expects to receive 102 additional planes in the coming years, including 41 A320neos, 47 A321neos, and 14 A321XLRs.
According to Cirium, JetSMART currently operates 974 weekly flights across South America, averaging 193.9 seats per departure.
Are you excited about American Airlines and JetSMART’s partnership? Let us know in the comments below.