American Airlines Courts Danger With Partnership Strategy
Despite being the largest U.S. airline by many metrics, American Airlines (NASDAQ: AAL) had some glaring strategic weaknesses even before the COVID-19 pandemic crushed the industry last year.
First, American is undersized on the West Coast compared to top rivals Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL). Relatedly, American Airlines has a weak position on routes to Asia relative to Delta and (especially) United. Second, American Airlines has a much smaller footprint in New York City -- the largest and most important air travel market in the U.S. -- than its rivals.
Last year, American Airlines announced partnerships with Alaska Air (NYSE: ALK) and JetBlue Airways (NASDAQ: JBLU) to address its shortcomings on the West Coast and in the Northeast, respectively. Yet teaming up with JetBlue in particular could backfire in the long run. Let's take a look.
Source Fool.com
