American Airlines eyes minority stake in Chile’s JetSMART

American Airlines (AA, Dallas/Fort Worth) has announced a new partnership with JetSMART (JA, Santiago de Chile Int’l) entailing both an extensive codeshare agreement and the potential acquisition of a minority stake in the Chilean low-cost carrier.

“This proposed investment in JetSMART would give customers access to the largest network, lowest fares and best travel loyalty program in the Americas. 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,” said Vasu Raja, American’s Chief Revenue Officer.

The carriers did not disclose the exact stake American Airlines may acquire. JetSMART is believed to be owned, for the most part, by US-based Indigo Partners. The Chilean parent company owns JetSMART Argentina (WJ, Buenos Aires Ezeiza), is in the process of launching JetSMART Peru, and said it would also be interested in establishing JetSMART Colombia in 2022. It has also touted a possible subsidiary in Brazil.

The letter of intent also covers the extension of the AAdvantage loyalty programme to JetSMART’s flights. American Airlines and Indigo Partners have also jointly committed to financing JetSMART’s future expansion in South America. The finalisation of the agreement is subject to both corporate and regulatory approvals.

According to the ch-aviation fleets advanced module, JetSMART currently operates six A320-200s and nine A320-200Ns in Chile and a further five A320-200s in Argentina. The carrier has a further fifty-six A320-200Ns, seven A321-200Ns, and twelve A321-200NX(XLR)s on firm order from Airbus. It does not currently operate to the United States but said that it could launch such flights in the future using the forthcoming A321-200NX(XLR)s.

American Airlines had partnered with then Oneworld fellow carrier LATAM Airlines (LA, Santiago de Chile Int’l) through 2020, when the Chilean airline left the alliance after it had received investment from Delta Air Lines.