It allows them to collude on pricing, scheduling, etc in ways that otherwise would be deemed anti-competitive. It means that the airlines no longer compete against each other; instead, they co-operate. It usually involves the pooling of revenues on the routes included.
Here is AA's definition of Joint Business Agreement, in the context of the announcement of their JBA across the Atlantic with BA and Iberia:
A joint business is made when two or more companies agree to do business in one specific area (in this case between Europe and the US) to provide a specific service and share revenues.
The three airlines can now co-operate commercially on flights between the EU, Switzerland and Norway and the US, Canada and Mexico.