American Airlines aims to buy stake in Indigo Partner’s JetSMART

American Airlines and JetSMART announced today the signing of a letter of intent through which both companies will advance in a codeshare agreement for flights between the United States and South America, and in which they also propose the entry of the American airline to the capital of the ultra low-cost with a minority stake.

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The agreement will also include AAdvantage loyalty program members earning and using miles on JetSMART flights.

JetSMART is owned by Indigo Partners, and began operations in Chile in 2016. Since, it has started an aggressive expansion program in South America, including the launch of a subsidiary in Argentina in 2018 and an upcoming one in Peru.

American previously tried to launch a partnership with LATAM Airlines, which was frustrated after the agreement the Chilean-Brazilian holding company reached with Delta Airlines last year.

«This investment proposal in JetSMART would give customers access to the largest network, lowest fares and the best travel loyalty program in America,» said Vasu Raja, American’s Chief Revenue Officer.

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«This would allow JetSMART and American to grow aggressively and profitably throughout Latin America as demand recovers while preserving the best aspects of each company’s business model. This partnership would also make AAdvantage the largest program. of travel loyalty in America, creating more ways for customers to earn travel rewards and use their miles to access new destinations and benefits globally, regardless of whether they travel in Latin America or North America, «he added.

For his part, Bill Franke, founder and managing partner of Indigo Partners, said that «we look forward to working with American to continue offering low rates and options to customers throughout South America.»

«By growing and connecting our respective route networks, and each maintaining its business model, we see a compelling value proposition for our future growth. By completing this proposed alliance, it would accelerate JetSMART’s path to becoming the ultra airline. South America’s leading low cost, while expanding service for American customers, «added Estuardo Ortiz, CEO of JetSMART.

From its subsidiaries in Chile and Argentina, JetSMART operates a network of 33 destinations in South America, while American Airlines flies to 17 destinations in the region from its hubs in Dallas-Fort Worth, Miami, and New York.

«The planned investments and the codeshare agreements are subject to the final documentation and the respective regulatory approvals,» they concluded from both companies.