American Airlines and JetSMART Sign Letter of Intent to Create the Broadest Network in the Americas.

American Airlines and JetSMART have signed a letter of intent to create the broadest network and most rewarding customer offering in the Americas. This 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.

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“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. This partnership would also make AAdvantage the largest travel loyalty program in the Americas, creating more ways for customers to earn travel rewards and use their miles to access new destinations and elite benefits globally, no matter whether they earn in Latin or North America.”

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Operating from Chile and Argentina, JetSMART is a portfolio airline of Indigo Partners, one of the world’s premier developers of new generation ultra-low-cost airlines. JetSMART operates a modern fleet of Airbus A320 aircraft and offers short-haul domestic and international service to 33 destinations throughout South America. American has served Latin America since 1942 and offers service to 17 destinations in South America from its U.S. hubs in Dallas-Fort Worth, Miami and New York. Through the two airlines’ codeshare, customers would be able to travel seamlessly throughout the Americas.

“By connecting and growing our respective networks, and maintaining our distinct business models, we see a compelling value proposition. When completed, this proposed partnership would accelerate JetSMART’s path to becoming the leading South American low-cost carrier while expanding service for American’s customers” Estuardo Ortiz, Chief Executive Officer of JetSMART said.

Under the proposed transaction, American would invest in JetSMART to facilitate this growth and give American a minority ownership stake in the short-haul South American carrier. Additionally, American and Indigo Partners would jointly commit to provide additional capital to fund potential future opportunities in the region.

The intended investments and codeshare agreements are subject to definitive documentation and any required governmental and regulatory approvals.

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