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American Airlines and JetSMART to Create the Broadest Network in the Americas

American Airlines and JetSMART have signed a letter of intent to create the broadest and most rewarding network in the Americas. Under the proposed partnership, American would acquire a minority ownership stake in JetSMART.

American Airlines and JetSMART Propose the Creation of the Broadest Network in the Americas - Courtesy American Airlines

On Thursday (July 29, 2021), American Airlines announced that they have signed a letter of intent with JetSMART to create the broadest and most rewarding network in the Americas. Under the proposed partnership, American would acquire a minority stake in JetSMART, allowing the carrier to rapidly grow their low-cost South American network. Additionally, customers would be able to earn and redeem AAdvantage miles when flying with JetSMART. The partnership would tie together American’s full-service global presence with JetSMART’s complimentary ULCC network in South America, offering competitive fares and expanded connectivity throughout North and South America.

In Thursday’s announcement, American Airlines’ Chief Revenue Officer, Vasu Raja, said,

“This proposed investment in JetSMART would give customers access to the largest network, lowest fares and best travel loyalty program in the Americas. This would enable JetSMART and American to grow aggressively and profitably across Latin America as demand recovers, while preserving the best aspects of each carrier’s business model. This partnership would also make AAdvantage the largest travel loyalty program in the Americas, creating more ways for customers to earn travel rewards and use their miles to access new destinations and elite benefits globally, no matter whether they earn in Latin or North America.”

Founded in 2016, JetSMART operates out of Chile and Argentina and is an ultra-low-cost portfolio airline of Indigo Partners. The airline operates a modern fleet of 20 Airbus A320 Family aircraft and offers short-haul domestic and international service to 33 destinations throughout South America. JetSMART also has 79 Additional Airbus A320 Family aircraft on order. Phoenix, Arizona-based Indigo Partners LLC is a private equity firm that focuses on investments in the air transport sector. The company’s current portfolio includes investments in Wizz Air, Frontier Airlines, Volaris, JetSMART, Cebu Pacific and Enerjet.

Also commenting on the proposed partnership, JetSMART’s Chief Executive Officer, Estuardo Ortiz, added,

“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.”

In addition to taking a minority ownership stake in JetSMART, American and Indigo Partners would jointly commit to providing additional capital to fund potential future opportunities in the region. The partnership, along with others in Latin America, would give American Airlines’ customers access to more low fares and travel options on a network twice the size of other big alliances.

American Airlines and JetSMART Service to and Within South America - Courtesy American Airlines

American Airlines has served Latin America since 1942 and currently offers service to 17 South American destinations from Dallas/Fort Worth, Miami and New York. American Airlines’ purpose is to “care for people on life’s journey.” Shares in the American Airlines Group, Inc., trade on NASDAQ under the ticker symbol AAL and the company’s stock is included in the S&P 500.

Source: American Airlines

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