JetBlue creates buzz with low fares and unlimited sodas
- It's rare for an airline to make money while offering cheap tickets and good customer service, and on top of that, be deemed the hippest carrier around.
But it's that combination that's making JetBlue the buzz of the airline industry after just a year and a half in business. Whether it's the free satellite television at every seat or the smiling faces greeting passengers at the gate, JetBlue is packing its planes with new and repeat customers.
Its rise has come so fast that some industry onlookers wonder whether it can last. Most, however, bet that JetBlue's success will continue as long as it keeps doing what it's doing now.
People like Betsy Casados of Colton, Calif., are fueling its rapid growth. She became a JetBlue convert during a recent trip from Ontario, Calif., to New York City.
"It was delightful," said Casados, who used to fly low-cost leader Southwest Airlines between the coasts. "I don't remember the last time I called a flight delightful."
Its fares run as low as $49 each way, which stand to become ever more attractive to budget-minded travelers during the slowdown.
"These hard economic times are nirvana for JetBlue," said Holly Hegeman, chief executive of planebusiness.com, a Web site that gives financial analysis of airlines. "Nothing makes people happier than flying on an airline that makes them feel like they are getting a great deal for their money."
JetBlue is the brainstorm of David Neeleman, who knows what it takes to build a successful start-up carrier because he's done it before. His first effort was Morris Air, which he sold for $130 million to Southwest in 1993, and then he helped found Canada's WestJet.
In early 1999, he raised $130 million from investors, including Western Presidio and J.P. Morgan Chase, that had helped finance his other start-ups. He also persuaded billionaire George Soros to come on board.
Neeleman, 41, wanted its home base to be New York, a huge market that lacks a prominent low-cost carrier. Instead of the constantly delayed La Guardia Airport, he set his sights on John F. Kennedy International. While farther from midtown Manhattan, JFK is much less crowded.
In deciding where to fly, he looked for opportunities at secondary airports close to large cities. Instead of Miami, he went for Fort Lauderdale. Oakland was picked over San Francisco. Last month, JetBlue said Cleveland may be added in the future.
It's a flight system developed and perfected by Southwest founder Herb Kelleher, whom Neeleman considers a friend.
Neeleman purchased only new aircraft - 16 A320s from Airbus Industrie, each with 162 seats. His philosophy is that new planes give an airline "instant credibility" with travelers.
On average, JetBlue says it is filling about 80 percent of its seats, compared with about 68 percent for the industry. It now operates 80 flights a day to 16 cities nationwide, with Long Beach, Calif., to be added later this month and Washington in October.
JetBlue now employs 1,800, among them an executive team that includes top players from Continental and Southwest. The airline expects to bring in $300 million in revenues this year. It was first profitable last August and has made money consistently since November.
Do you think JetBlue has a chance at CLE, and what gates would they most likely occupy, since all of the gates are occupied?