South America’s JetSmart to adopt American’s AAdvantage loyalty program

American Airlines' AAdvantage loyalty program is about to get a little bit bigger with the addition of South American budget carrier JetSmart.

The Chilean airline will adopt AAdvantage as its own loyalty program later this year, JetSmart CEO Estuardo Ortiz said Tuesday at the Routes Americas conference in Bogota, Colombia. Once complete, any traveler on JetSmart's flights will be able to accrue or redeem AAdvantage miles.

"We think, for a certain segment, it's going to be pretty valuable," Ortiz said of the plan, which he called "pioneering."

The airlines are still determining if JetSmart flights will be eligible for AAdvantage tier status, he added.

JetSmart's adoption of AAdvantage comes three years after the airlines unveiled a wide-ranging partnership. The unique deal saw American, a full-service carrier, take an equity stake in ultra-low-cost carrier JetSmart with plans for future codeshare and loyalty tie-ups.

The deal followed American's loss of longtime partner LATAM to Delta Air Lines in 2019. LATAM and Delta subsequently launched a joint venture covering U.S.-South America flights in late 2022. The partnership allows LATAM and Delta to legally coordinate flights, fares and other commercial activities.

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American — which also forged a new partnership with Brazilian airline Gol after losing LATAM — completed its purchase of a 35.4% stake in JetSmart in late 2022. The airlines implemented codeshares on the discounter's flights in Chile and Peru last year. Codeshares in Argentina and Colombia, where JetSmart launched domestic flights earlier in March, are set to begin later this year.

One airline adopting another's loyalty program is unusual, but not unheard of, in global air travel. Finnair adopted Avios as its loyalty currency earlier in March, joining the likes of Aer Lingus, British Airways, Iberia and Qatar Airways. Avios is owned by International Airlines Group. Also, Copa Airlines used United Airlines' MileagePlus program for its loyalty needs until launching its own program, ConnectMiles, in 2015.

For JetSmart, Ortiz sees adopting AAdvantage as a boost to the rapidly growing budget airline's business. Some selling points are that AAdvantage is the largest airline loyalty program in the world and one of the largest in Latin America.

"I think we're evolving in a manner that we really didn't expect but it's definitely welcome," he said. "It's more passengers, [and] it's higher yields."

American executives have previously described the partnership as expanding the utility of AAdvantage in South America. That could subsequently boost membership in the program — which is highly lucrative for American — and get more people on the airline's flights into and out of the region.

JetSmart operates 35 aircraft across four countries: Argentina, Chile, Colombia and Peru. It has orders for another 73 Airbus A320neo-family planes and likely more from majority owner Indigo Partners, according to the latest orders and deliveries data from Airbus.

Asked about JetSmart's growth plans, Ortiz declined to provide specifics but said the focus for the next few years is to further develop its network in the four countries where it already operates.

Ortiz was mum on any plans to serve the U.S.