I don't see AA's need for another JFK terminal. AA just built a $1.3 billion edifice to replace the old terminals 8 and 9 and it was downsized by almost half after construction began. Apparently, the streetside concourse can be expanded on each end (as the downsizing consisted of shortening the check-in and main concourse areas).
1) Expanding the terminal would probably involve a significant capital expenditure, not to mention shutting down sections of the brand new terminal, which AA could avoid just by using the new Terminal 5. It would also prevent another airline from getting and going to the politicians and demanding slots just because they have facilities.
2) The is a hugely long waiting line for the E170/E190 jets. If AA purchased JetBlue they could get 50+ E190's and would have orders for an additional 50 more. Many of those E190 orders could probably be easily converted to E170 orders which would dramatically expand Eagles 70+ seat fleet (which AA would probably love to do with oil prices being what they are).
2.5) JetBlue also has a significant amount of A320's and a large number of A320 orders that have yet to be filled. This could allow for an accelerated MD80 retirements. Furthermore many of those A320 orders could be changed to A319 orders allowing for further fleet flexibility. Many airlines already fly both A320's and 737's and having such a large A320 fleet would reduce, if not eliminate, any extra operation costs associated from operating both fleet types. AA could even divest itself of many of the A320 orders, make a good bit of money doing it and partially pay for the transaction this way.
3) With JFK about to be slot controlled (it already is to a certain extent in the afternoons) buying JetBlue would give AA a ton of new JFK slots from which to expand from the airport both domestically and internationally.
4) Buying JetBlue would allow for American to have a significant domestic and international operations out of one airport in New York for the first time ever. This would allow for AA to finally turn JFK into a proper hub and would allow for much more effective feeding of the rapidly growing JFK European operation. Furthermore, it would finally provide real competition to the only real hub in the NYC metro area, Continental out of Newark.
4.5) Having to compete with a UA/CO combination out of EWR and an expanded Delta presence out of JFK (which includes an effective domestic feeding system for their European operations combined with the extensive DL/AF and NW/KLM parternships), AA would probably be looking at a way to effective compete with them out of New York, internationally. Buying JetBlue would help solve this problem.
5) JetBlue started up after the last major round of hiring at AMR. This means absolutely zero issues regarding seniority as all of the JetBlue employees would fall to the bottom of their respective employee group seniority lists. With respect to costs, AA's starting wages are competitive with JetBlue's wages (just looking at the starting pay scales), so there probably wouldn't be a significant cost increase to the JetBlue operationally with AA takeover.
Arguments against:
1) 55% of JetBlue's capacity runs what we would affectionally call, the Snowbird routes (i.e. Northeast to Florida). The yields on these markets are extremely poor. Many would look at this and wonder if American's JetBlue takeover would simply by PanAm/National redux, especially since PanAm did this expressly to help feed their European operation.
--Counterpoint: There weren't really connecting hubs or feeding operations that we know of today back in 1979 when PanAm took over National, so there was no real effective model for feeding passengers from one flight to another. AA would create the first modern hub with its massive DFW expansion and operation in the early 1980's.
--Counterpoint 2: There was significant labor discord during and after the PanAm/National merger with seniority list integration, flying assignments, international routes, pay scales, a generally since of arrogance amongst the PanAm employees that they shouldn't even be dealing this a lowly carrier like National. American is not PanAm and there wouldn't be the seniority integration, et al. that helped to drive the bitterness between the PanAm and National
--Counterpoint 3: PanAm grossly overpaid for National and tried to justify by claiming that National owned most of their planes. Unless JetBlue suddenly and dramatically increases in value, I would think that 1 billion dollars (and that's for every single share) for lots of planes and a brand new terminal, and a domestic feeder system which will aid in European service expansion (by getting connecting passengers to JFK) would be a fair deal. AA could probably try to acquire JetBlue for significantly less.
