American Airlines is planning to take a stake in South American carrier Jetsmart. The US airline says it has signed a letter of intent to take a minority position in the ultra-low cost carrier. In addition, a codeshare agreement is also in the works between the two airlines.
Jetsmart, founded in 2016, is controlled by Indigo Partners, which also owns stakes in Wizz Air, Frontier Airlines, Volaris, Cebu Pacific and Canadian start-up Enerjet. The agreement jointly commits American and Indigo Partners to provide additional capital to fund potential future opportunities in the region.
The South American carrier operates short-haul domestic and international services from Chile and Argentina to 33 destinations within the continent, using Airbus A320 aircraft. AA network currently includes 17 destinations in South America served from its US hubs at Dallas Fort Worth, Miami and New York.
According to a statement from American, the proposed partnership “would uniquely tie together the full-service, global presence of American with the complementary network of ultra-low-cost carrier Jetsmart in South America to offer competitive fares and expanded travel options for flyers throughout North and South America”.
In addition the deal would allow AAdvantage members to earn and redeem miles on Jetsmart flights.
The move by American follows last year’s announcement of the joint venture between Delta Air Lines and Latin American carrier LATAM.
“This proposed investment in Jetsmart would give customers access to the largest network, lowest fares and best travel loyalty program in the Americas,” said Vasu Raja, American’s chief revenue officer. “This would enable Jetsmart and American to grow aggressively and profitably across Latin America as demand recovers, while preserving the best aspects of each carrier’s business model.”