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JetBlue Taking A Chance?  
User currently offlineUSAir330 From United States of America, joined Mar 2002, 824 posts, RR: 1
Posted (9 years 2 months 1 week 16 hours ago) and read 1725 times:

I don't like to pretend I'm an Armchair CEO and make predictions. My question is, is B6 taking a chance by operating from all 3 NYC airports to FL? Can it hurt them in the longrun?

The way I think of it is if you have 130 pax. all going to FLL and 100 decide they want to go through LGA and the other 30 decide to go through JFK wont that hurt them a bit? It would be like sending 2 A320's from JFK to FLL at the same exact time.

16 replies: All unread, jump to last
 
User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 1, posted (9 years 2 months 1 week 16 hours ago) and read 1715 times:

JFK makes sense, LGA to a point. But out of EWR? I'm not a big CO fan, but even I'll admit that trying to take on CO in EWR is not the smartest of moves. It will either bite B6 in a big way, or be a huge coup against a legacy carrier.

I'll bet on the former... Wink


User currently offlinePlanemannyc From United States of America, joined Aug 2003, 1008 posts, RR: 8
Reply 2, posted (9 years 2 months 1 week 16 hours ago) and read 1717 times:
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I think B6 is banking on the fact that in the tri-state area, it has built a great brand recognition. Also, NYC metro area is huge - 18 million people. I think B6 feels that there are enough passengers going from NJ to FLL / MIA and their new planes (relatively), 24 channel live TV will get passengers going from NJ on B6. Of course, CO will fight tough as CO feels this is an encroachment on it's own turf. It is not as easy as JFK or even LGA. LGA was started because a lot of NYC, and especially Manhattan customers found the 45+ min trip to JFK too much for a short trip to FLL. I guess they now betting that you bring the flights closer to the Jersey passengers, and they will try the airline as well. I think it is a good bet.

I would not be surprised if B6 does not start FL flights from BDL and PHL in the near future.

My $0.02.

Best,

Wasim / Planemannyc


User currently offlineDB777 From United States of America, joined Apr 2001, 885 posts, RR: 43
Reply 3, posted (9 years 2 months 1 week 15 hours ago) and read 1666 times:
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One would presume that B6 did a lot of market research in determining whether to do it or not. It wouldn't be that difficult to ascertain how many of their current JFK pax live closer to EWR, plus a lot of other factors. And hopefully they knew that CO would fight to protect their turf with increased flights and lower fares and they still decided to risk the gamble based on their market research.


Photographing aircraft since the Earth was flat and on Airliners.net since #338
User currently offlinePlanemannyc From United States of America, joined Aug 2003, 1008 posts, RR: 8
Reply 4, posted (9 years 2 months 1 week 15 hours ago) and read 1663 times:
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As long as it does not become another ATL.....at least the come armed with 15 flighys daily this time.

Best,

Wasim / Planemannyc


User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 5, posted (9 years 2 months 1 week 15 hours ago) and read 1648 times:
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Planemannyc,

They pulled out of ATL because the plane could be used elsewhere and they didnt want to enter a 3 way fare way with DL and FL. The ATL flights were making money.

JBLU


User currently offlinePlanemannyc From United States of America, joined Aug 2003, 1008 posts, RR: 8
Reply 6, posted (9 years 2 months 1 week 15 hours ago) and read 1630 times:
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JBLU,

Please don't get me wrong, I really like B6 and I think they have a very sound strategy. I think ATL was a good lesson, and pulling out at that time made a lot of sense. I think EWR services have a much greater chance of survival. The stakes are higher this time, and B6 is not known for making a bold move without studying the market first. ATL seemed to be more like a feeler destination.

Best,

Wasim / Planemannyc


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 7, posted (9 years 2 months 1 week 15 hours ago) and read 1621 times:

Neeleman may be making a big mistake. Going up against CO in EWR and AA in MIA is only going to prove once and for all to these airlines that going low cost is the only safe haven left. Delta is already a believer. CO/AA still have the swager that one sees at fortress hubs. Once they see Jetblue beating them in margins Month after Month in these markets it will hit them like a ton of bricks. Southwest for as big as they are did not rock the boat for many years, and before the majors knew what happened it was too late. ie US Air, TWA, United. Jetblue on the other hand is giving them fair warning. More than enough chance to restructure costs yet again.

User currently offlinePlanemannyc From United States of America, joined Aug 2003, 1008 posts, RR: 8
Reply 8, posted (9 years 2 months 1 week 15 hours ago) and read 1602 times:
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Which do you think will happen first..B6 will make money at EWR or CO/AA will reduce cost enough to be profitable? I am willing to bet that B6 would be the winner. Prices on so many routes have come down to match and even beat B6, yet B6 remains profitable. Problem with legacies is not just higher crew cost, they have huge debts to work with as well, and typically higher maintenance cost. But no question, B6 will find it tougher and tougher down the line as all of the US becomes one large LCC market.

Again, my crazy opinion (crazier still at 2:45 am -- and I have to be at work at 9:00 tomorrow!)

Best,

Wasim / Planemannyc


User currently offlineB6FA4ever From United States of America, joined Aug 2003, 816 posts, RR: 11
Reply 9, posted (9 years 2 months 1 week 14 hours ago) and read 1568 times:

Quoting DB777 (Reply 3):
One would presume that B6 did a lot of market research in determining whether to do it or not. It wouldn't be that difficult to ascertain how many of their current JFK pax live closer to EWR, plus a lot of other factors. And hopefully they knew that CO would fight to protect their turf with increased flights and lower fares and they still decided to risk the gamble based on their market research.

one of the researches we did was offer a survey on our website and i believe one of the questions it asked was which area do you live at (New York area, Los Angeles area, etc.) if you selected NY area it then offered a couple choices as to a more precise area, (NYC area, Long Island, Newark, etc.) FA4B6 would know more on that because i remember he had a post regarding this survey on another thread.

anyways, apparently there is quite a lot of people that reside in the EWR area to warrant service as far as customer location goes.

all-in-all i believe this will eventually become a co-existance compitition much like in JFK (w/ AA and DL) and same as BOS (w/ AA, DL) to florida...just w/ a bigger fight since EWR is a "fortress" hub as stated above.

~B6FA4ever


User currently offlineLowecur From United States of America, joined Jan 2005, 585 posts, RR: 0
Reply 10, posted (9 years 2 months 1 week 10 hours ago) and read 1449 times:

This is not a gamble at all. This first and foremost reason is to open gates at an already tight facility at JFK. They have done their homework and know the demographics that fly JFK from NJ. They are then adding a few more flts in anticipation of a percentage of the CAL loyal defecting.

The next move will be MIA to free up FLL. This is mandatory if they want gate space for direct flts from upstate and new markets to FLL.

The interesting move will be the opening of Islip. This will be the first direct contest against WN. I look for this station to open sometime in 06 as more 190s arrive.


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 11, posted (9 years 2 months 1 week 8 hours ago) and read 1297 times:

Hmmmm...their breakeven load factor (according to their April 10Q) is 82.8. Actual load factor is 85.8. How much of that 85.8 is coming from NJ to JFK? And what impact will it have when folks who might have made the trip to JFK now opt to go out of EWR? Will it impact their system wide load factor numbers?

User currently offlineLuvfa From United States of America, joined May 2005, 446 posts, RR: 4
Reply 12, posted (9 years 2 months 1 week 8 hours ago) and read 1290 times:

If you look at the facts:

EWR has the most expensive avg. one-way fare to Florida. B6 mainly flies to Florida and looks for airports that are overpriced. I thought it was more of a reach for B6 to fly out of LGA, (being that it is only 8 miles from JFK) was more of a reach, but they were successful. Flying out of JFK will allow people in Northern NJ, the Poconos or the West side of the Hudson Valley of NY to consider Jetblue. My in-laws live in Hackensack, NJ and they would never consider going to JFK or LGA even if the fare was cheaper. They are strictly EWR. Anything else just isn't worth the hassle.

Any way, good luck to B6 on your EWR service. I know my wife will non-rev on you guys to EWR rather than JFK. You are always a pleasure to non-rev on!

BTW CO has a monopoly on EWR-TPA service at this time. Looking forward to seeing some competition there!


User currently offlineChrisNH From United States of America, joined Jun 1999, 4116 posts, RR: 2
Reply 13, posted (9 years 2 months 1 week 8 hours ago) and read 1282 times:

CO is financially healthy enough to battle JetBlue at Newark. In my opinion, JetBlue will retrench after awhile. Just because you're a Wall Street darling (or were) doesn't mean you can come waltzing into a hub and do damage...not if the incumbent is a healthy one.

Chris in NH


User currently offlineLGAtoIND From United States of America, joined Jan 2005, 490 posts, RR: 1
Reply 14, posted (9 years 2 months 1 week 8 hours ago) and read 1266 times:

People on here act as if B6 has never taken on a Legacy carrier before. Have you all forgotten how we have taken on AA, UA, and DL at JFK and LGA, and succedded? These 3 airlines probably have the same number of flights to Florida and CA that Continental does. Also, JetBlue's arrival will bring a lot of new traffic into the routes, much like the "Southwest Effect".

User currently offlineLuvfa From United States of America, joined May 2005, 446 posts, RR: 4
Reply 15, posted (9 years 2 months 1 week 8 hours ago) and read 1263 times:

I worked for a two other carriers that fle EWR-FLA in the mid to late 90's. Both were very successful on those routes. The problem was the airlines themselves were not very organized companies. Jetblu on the other hand, has their act together.
Obviously CO, one of the strongest legacy carriers, isn't going anywhere. I feel both B6 and CO will be able to exist in EWR.


User currently offlineDartland From United States of America, joined Apr 2005, 644 posts, RR: 2
Reply 16, posted (9 years 2 months 1 week 8 hours ago) and read 1224 times:
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Given the number of flights per day and load factor between NYC and FL, one would have to believe there is enough room for B6 and CO to coexist and both make mony out of EWR.

There are certainly enough people in the North NJ area to fly B6 to FL. There are also certainly enough people who will also do so on CO because of loyalty (and ff miles), not to mention the people connecting to foreign destinations.

ATL is different because it is primarily a hub airport, with limited O&D service -- there just was not enough room for both of them. EWR has significant O&D service (especially on all airlines not CO) giving it plenty of room for both B6 and CO.

That being said, it'll be interesting to see what happens. Assuming CO matches B6's fares, it'll be a war of which passengers want more: ff miles and the legacy feel, or B6's IFE.

Personally, I always prefer Song because they provide both!


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