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American Airlines announces major new partnership with South American ULCC JetSmart

July 29, 2021
5 min read
A mockup of an American Airlines aircraft tail and a JetSMART aircraft tail next to each other.
American Airlines announces major new partnership with South American ULCC JetSmart
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American Airlines is doubling down on South America — and moving past a pre-pandemic breakup.

The U.S. carrier on Tuesday announced a partnership with South American ultra low-cost carrier JetSmart (branded as JetSMART).

JetSmart, which was founded in 2016, operates primarily out of bases in Chile and Argentina. The airline has a fleet of 20 Airbus A320ceo and A320neo aircraft, with 79 more pending deliveries. It flies short-haul routes throughout the two countries, as well as to destinations in Brazil, Uruguay, Peru and Colombia.

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It's owned by Indigo Partners, the private equity firm that owns a range of ULCCs including Frontier Airlines in the U.S., Wizz Air in Europe, Volaris in Mexico and Cebu Pacific in the Philippines, among others.

Under the partnership, the two airlines will codeshare, and American Airlines AAdvantage members will be able to earn and redeem miles on JetSmart. American will purchase a minority ownership stake in the ULCC, and American and Indigo will "jointly commit to provide additional capital to fund potential future opportunities in the region," the airlines said in a statement.

American operates flights to 17 cities in South America, while JetSmart currently services 33 cities. The airlines will offer connections in Cali, Medellin and Bogota, Colombia; Lima, Peru; Buenos Aires, Argentina; and Santiago, Chile.

(Image courtesy of American Airlines)

The partnership comes alongside American's existing codeshare agreement with Brazilian carrier GOL.

Together, the two codeshare agreements help make up for American Airlines' still-stinging 2019 loss of its codeshare with Latam, which is the South American airline stemming from the 2012 merger of Chilean flag carrier Lan and Brazilian airline Tam.

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In 2019, Delta Air Lines announced its own partnership with and ownership stake in Latam, effectively stealing the carrier away from American Airlines and its other Oneworld partners.

Still, American said, the impetus for the new partnership is to expand service for its customers based on current opportunities — not to make up for the pre-pandemic Latam breakup.

"What's unique is what JetSmart brings to the American Airlines network," Vasu Raja, American's chief revenue officer, said in a media briefing.

More: Americans can now visit 105 countries and territories — here’s the complete list

"For a long time, American Airlines has been the largest long-haul carrier into South America," Raja added. "We've continued to bolster the network and we have plans coming out of here to be able to continue to grow in South America and grow, really, quite aggressively."

It was not clear when the alliance would fully take effect, however. Raja said that the airlines anticipate introducing the codeshare "as quickly as we can," but that the integration of the AAdvantage program could take longer.

"We want to be really thoughtful about how we roll out an entirety of benefits to the customers that preserves the integrity of these business models and fulfills our purpose behind the deal," he said.

(Image courtesy of Jetsmart)

Notably, Raja said, the partnership will help American appeal to potential customers who are visiting the U.S.

"As many as 65% of our customer base on these routes originates in South America," Raja said.

While American Airlines would prefer to be viewed as a mainline, premium carrier — on par with Delta and United, even if those competitors are more deliberately trying to appeal to customers as "premium" — Raja said he was not concerned that allying with a ULCC could hurt perceptions of the U.S. carrier.

"Don't be fooled by the name," Raja said of the ULCC moniker, referring to airlines based in non-U.S. markets around the globe. "The quality of product that ULCCs are offering, especially this ULCC, JetSmart is not just competitive with more traditional network competitors in the area — it's very often superior."

More: 6 things we learned about Delta this week during its earnings call

"These are new airplanes with modern seats and a great schedule and travel pattern for either a connecting passenger or especially a nonstop passenger," he added. "So ULCC notwithstanding, this is a product which certainly we'd be very proud to put our customers on, otherwise we wouldn't be engaging in a partnership such as this."

Featured image by Image courtesy of American Airlines
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Apply for American Express® Gold Card
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Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees