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Is a Merger inevitable between Alaska and JetBlue? (Part 2 of 3)

In part 2 of this 3-part article series aviation journalist and analyst Alex Martinez Rivera is looking at who could possibly acquire who in the Alaska and JetBlue merger possibility.

Review of Part 1

Part one discussed in detail why Alaska and JetBlue is an example of a merger of equals. In addition, their strengths at their respective coasts were explained.

Furthermore, we looked at the reasons why JetBlue held out hope on Long Beach as long as they did and how not having a second round of the Cares Act could trigger a round of airline consolidation

Not the original plan of Alaska Airlines

Alaska has already paired back destinations. It could mean relying on American to feed passenger traffic along East of the Mississippi. Also, it would mean divesting more flights in the midwest and the plains to survive.

If the plan was to get parity at the gates why did Alaska merge with Virgin America?

However, Alaska’s strength comes back to Seattle (SEA), San Francisco (SFO), and the new hub of Los Angeles (LAX).

Alaska Airlines LAX
Alaska’s LAX.

Alaska, JetBlue, and American

  • Alaska is evidently expanding for a total of 35 destinations in Southern California. The airline already has a presence on the West Coast. JetBlue, strategic-wise, never had a comprehensive (or specifically) a cohesive direction when one talks about the West Coast.
  • American (in theory) is the largest airline in the world. They have said the airline isn’t as profitable in Los Angeles as in other hubs.
  • JetBlue’s realignment in operations from Long Beach to its new home at LAX in October is ominous.

Having another airline at LAX is a losing proposition.

JetBlue’s West Coast operations

JetBlue Leaving Operations from Long Beach to Los Angeles International Airport in October. CBS 2 Los Angeles/YouTube.

Whether JetBlue can break the decade of losing propositions for its West Coast Operations remains to be seen.

Using that 9/11 expertise would certainly help them get in the right direction.

It becomes equally important to answer that question because that answer will give perspective on whether there is a tenth round of consolidation.

In addition, JetBlue’s plan to take a gate in London has been delayed. It wouldn’t surprise me if it gets scrapped as airlines require all the capital they can get at this point.

Who would buy who in the Alaska and JetBlue merger possibility?

As a Business Administrator what I look specifically in a merger is risk compliance and divestitures* (in percentage) and what the companies need to do.

(*Divestiture: The action or process of selling off subsidiary business interests or investments).

So, who buys who at the end of the road if the divestiture is minimal?

With the due diligence done. The divestitures of both companies are unquestionably minimal.

However, if one thinks there isn’t any (government) to the airlines one must think of legacy and years in the air. If one goes comparing such standards as the most important evidence then by size and by seniority Alaska Airlines becomes the winner.

JetBlue is starting basically from scratch again in the West Coast.

With this merger, whichever company survives undoubtedly becomes a stronger company. Having a reach stretch that comparatively looks like full fledge airline from Alaska and Hawaii to as far east as Barbados and Saint Lucia, and as far south as Lima, Peru.

However for a merger to work one needs to know where the companies encounter the same area.

In other words, where do these companies have the same flights?

Alaska and JetBlue route overlaps, divestiture details

Los Angeles LAX routes

alaska and jetblue merger, jetblue focus city strategy

From Los Angeles (LAX) the overlap routes become the following on a North-South Direction:

  • Bozeman Yellowstone International Airport, Montana (BZN).
  • McCarran International Airport (LAS) Las Vegas, Nevada.
  • Salt Lake City International Airport, Utah (SLC).
  • San Francisco International Airport, California (SFO).
  • Seattle-Tacoma International Airport (SEA), Washington State.

On an East-West Direction the following airports overlap within the airlines:

  • Boston Logan International Airport (BOS), Massachusetts.
  • Fort Lauderdale–Hollywood International Airport (FLL), Florida.
  • Newark Liberty International Airport (EWR), New Jersey.
  • New York John F. Kennedy International Airport (JFK), New York.
alaska and jetblue merger, jetblue focus city strategy

San Francisco (SFO) routes

From San Francisco the overlap is focused on an East-West Direction.

alaska and jetblue merger, jetblue focus city strategy
  • Boston Logan International Airport (BOS), Massachusetts.
  • Fort Lauderdale–Hollywood International Airport (FLL), Florida.
  • Newark Liberty International Airport (EWR), New Jersey.
  • New York John F. Kennedy International Airport (JFK), New York.
  • Orlando International Airport (MCO), Florida.

Surprisingly, the only overlap on a North-South Direction is Los Angeles International Airport (LAX).

alaska and jetblue merger, jetblue focus city strategy

Portland (PDX) routes

Portland International Airport (PDX), due to the proximity of Seattle-Tacoma, becomes a stronghold for Alaska Airlines. The overall overlap is in an East-West direction.

JetBlue Porland (PDX) network
JetBlue’s Portland (PDX) network.
  • Fort Lauderdale–Hollywood International Airport (FLL), Florida.
  • Boston Logan International Airport (BOS), Massachusetts.
  • New York John F. Kennedy International Airport (JFK), New York.

(Author’s note: I am not concerned about the Portland to Long Beach flight as JetBlue will be changing its operations to LAX next October).

Seattle/Tacoma (SEA) routes

Lastly, in Seattle-Tacoma, the divestitures are minimal as well. Again Seattle/Tacoma is concentrated in an East-West direction which doesn’t take into account the North-South flights which are the Department of Justice Anti-Trust Rules for red flags.

Alaska Seattle network
Alaska’s Seattle (SEA) network.
  • Boston Logan International Airport (BOS), Massachusetts.
  • Fort Lauderdale–Hollywood International Airport (FLL), Florida.
  • New York John F. Kennedy International Airport (JFK), New York.
JetBlue Seattle (SEA) network
JetBlue’s Seattle (SEA) network.

The only North-South route that might cause concern is the flight to Los Angeles (LAX). Alaska Airlines and JetBlue both fly that specific flight.

In part 3 of 3, Alex Martinez Rivera will conclude his evaluation of an Alaska and JetBlue merger possibility. He will also present an analysis of possible further acquisition or merger scenarios among other airlines. Questions or comments? You can contact the reporter here.

Featured Image: Alaska Airlines.

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