On April 30, United Airlines’ stock declined after news broke that it may be partnering with another airline.
Referring to the potential partnership, Yahoo Finance wrote, “Investors are right to be concerned that the larger United might be spending much time and effort on a partnership that federal officials could try hard to shut down — as they have in the past.”
An official statement hasn’t been released regarding United and JetBlue potentially teaming up.
Reuters reported, “While the alliance is expected to focus on providing greater connectivity to customers and allowing them to earn and burn frequent-flier miles, the two carriers will not coordinate on schedules and pricing.”
The deal, Yahoo Finance stated, would be very different from the Northeast Alliance, which came to an end in 2023 after federal regulations argued that it violated antitrust laws.
According to the outlet, the potential partnership would not have them “coordinate on key aspects of the business such as schedules and pricing.”
Reuters highlighted that since the COVID pandemic, JetBlue has struggled with profitability. “Its shares have fallen about 47% this year. In a sign of bearish investor sentiment, short interest in the company’s shares has risen by 35% since early February.” These issues have been further aggravated by the government’s trade policies enacted earlier this year.
Yahoo Finance added that at this time, United Airlines is not on their list of “10 best stocks” for investors to buy right now. However, they do seem insistent on expansion.
On Wednesday, per the outlet, CEO Scott Kirby said of United Airlines, “I would like to have a presence on the other side of the river at JFK (airport)… But man, all the headache, all the brain damage of buying a whole airline to get there. That’s a lot to do.”
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Author: S.M. Walsh