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JetBlue & How It's Building On Southwest's Success  
User currently offlineSFOintern From United States of America, joined Oct 2001, 770 posts, RR: 5
Posted (12 years 11 months 3 weeks 3 days 13 hours ago) and read 2404 times:

When Neeleman sold his baby Morris Air to Southwest in 1993, WN was shrewd enough to recognize him as a business threat. So it stipulated that he couldn't work in the airline industry for 5 years.

Lo and behold, Neeleman came back --and came back big time-- in 1999, the year after his voluntary exile, to found jetBlue.

Stating the Obvious

In many ways, Neeleman has mimicked the Southwest formula. He's chosen less congested destination airports, a single fleet type to cut costs, you know, the basic southwest fundamentals.

But jetBlue seems to be building on Southwest's successful formula; applying it to a new kind of stylish, value-oriented proposal. As its average stage length increases, jetBlue's lowered costs come in handy.

This tends to make me think some sort of international service is coming up for jB's prospects... I'm thinking the Caribbean, Mexico, or Canada.

WN & B7 -- The Dynamic Duo

In what ways do you see jetBlue applying WN's strategies for its own niche?

Already, jetBlue is advertising itself as the "low-fare, high frills" airline, whereas Southwest prides itself on being the "low-fare, low-frills" airline.

Interesting fact for you

In 1971, Southwest's slogan was:
The Somebody Else Up There Who Loves You

jetBlue recently came out with a slogan:
Somebody Up There Likes You


Hey now!  Big thumbs up

55 replies: All unread, showing first 25:
 
User currently offlineGreg From United Kingdom, joined May 2005, 0 posts, RR: 0
Reply 1, posted (12 years 11 months 3 weeks 3 days 12 hours ago) and read 2267 times:

It's way too early to be handing accolades out to JB. They have how many planes? 15 or so? Hardly a fleet...more like a handful. And they serve a bunch of low yield tourist destinations. It's impossible to compare them to Southwest.

It'll be interesting to see how well they weather the current situation. They may say they are profitable...but then again, who knows? I don't see an IPO being offered any time soon.


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4506 posts, RR: 34
Reply 2, posted (12 years 11 months 3 weeks 3 days 12 hours ago) and read 2251 times:

Two pages JetBlue seems to be borrowing successfully from WN is flying to less-used airports, and cities who have suffered price abuse from the Cartel.

JetBlue's main hub is the prime example of the underused airport...they are catching the wave of rebuilding at JFK. That's going to be a completely new airport within a few years, and a lot of improvement is already open. For years my parents avoided JFK like the plague for trips to Europe. This spring, they flew JetBlue down to catch their Air France flight. On their return trip they sailed through the snazzy new T1's customs at rush hour and JetBlue gladly accomodated them on an earlier flight. For both O & D and connections, JetBlue is well poised to take advantage of the new JFK.

At Rochester, New York, where fares are 4th highest in nation (per DOT), JetBlue has been a huge success, with high load factors to JFK. The Cartel doesn't seem inclined to compete. American dropped its ERJ's from ROC to LGA last spring...why compete with low fares when you can only make money by gouging? After Sept 11, US Airways cut 5 of 8 LGA flights; some of that was probably coming anyway.

Yes, all that quickly-instituted Upstate NY service was to some extent done to please the NY Congressional delegation who got JetBlue the slots at JFK. But the numbers, and the response of the Cartel, validate the business sense of that decision. JetBlue flies a third of its daily capacity to Upstate NY; they wouldn't be so profitable if such a large segment weren't performing.


Jim











Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineCritter592 From , joined Dec 1969, posts, RR:
Reply 3, posted (12 years 11 months 3 weeks 3 days 11 hours ago) and read 2235 times:

I have just 2 words for this:

GO JETBLUE!!!!!!!!!


User currently offlineLowfareair From , joined Dec 1969, posts, RR:
Reply 4, posted (12 years 11 months 3 weeks 3 days 11 hours ago) and read 2216 times:

>>It'll be interesting to see how well they weather the current situation. They may say they are profitable...but then again, who knows? I don't see an IPO being offered any time soon.<<

Greg: they have posted a profit(Don't know if operating or net but nonetheless it's a profit!) of about $10 million on 140 million of revenue.

They aren't the only ones putting off an IPO. COEx is delaying theirs I think.


User currently offlineRayChuang From United States of America, joined Jun 2000, 8018 posts, RR: 5
Reply 5, posted (12 years 11 months 3 weeks 3 days 10 hours ago) and read 2199 times:

I think because B6 is successful being a higher-class Southwest, they will probably do well in the long run because they won't have the high seat-mile costs that plague the majors.

One thing I do see is B6 buying 12-14 A321's by 2004-2005 to accommodate JFK-FLL and JFK-US West Coast flights.


User currently offlineGreg From United Kingdom, joined May 2005, 0 posts, RR: 0
Reply 6, posted (12 years 11 months 3 weeks 3 days 9 hours ago) and read 2186 times:

Neeleman is sweating his IPO because he wants his original investment back (as due his backers). At one point, he had some fairly deep pockets, but they are not so deep anymore. He needs the money to fund those aircraft that are on captital leases (not operating leases). It will be very interesting in about six months.

Still, comparing a year old company with 15 planes with one that has 250 planes and 30 YEARS of profitibility is fairly ridiculous.


User currently offlineDeltaSFO From United States of America, joined Nov 2000, 2488 posts, RR: 22
Reply 7, posted (12 years 11 months 3 weeks 3 days 9 hours ago) and read 2177 times:

When I get a look at JB's balance sheet, I'll decide whether or not to sing their praises. Oh, wait, they're not even publicly traded. Nevermind.

Also, their transcons from JFK and IAD to OAK and LGB are nice for the market segment they serve, but if you guys think that the big money travelers in these markets are leaving the Big Three for jetBlue, you're smoking some high grain crack.



It's a new day. Every moment matters. Now, more than ever.
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32899 posts, RR: 71
Reply 8, posted (12 years 11 months 3 weeks 3 days 8 hours ago) and read 2158 times:

DeltaSFO, think? They are! jetBlue has already become on of the dominant carriers between the Miami area and New York City, with for flights a day between South Florida and JFK than any other airline (8 right now; 13 by December). Thier Long Beach and Oakland services have been so succsesful, that third dailies are coming from JFK. JFK-LGB goes triple daily 1 November (announced after the attacks). FLL-LGB is not far off, and, yes, jetBlue will be able to give dominant AA a run for its money (AA runs seven daily Miami-Los Angeles flights). The fact is that business travelers, myself included, are sick of paying high, last-minute fares on AA, UA, etc. I could not care less if I don't have an FF program, but if jetBlue can get to were I need to go at a good price with service that the majors can't offer, I'm all for it. Besides, I'll still fly the majors when jetBlue is not an option.


a.
User currently offlineGreg From United Kingdom, joined May 2005, 0 posts, RR: 0
Reply 9, posted (12 years 11 months 3 weeks 3 days 8 hours ago) and read 2156 times:

If you could care less whether they have a FF program, they you are NOT a frequent flyer. Don't try to pass yourself as one.

You're right that they may dominate certain segments of the market..but then again, JFK sees very little domestic service. Include traffic from LGA and EWR (both closer to NYC than JFK) and see what results you get

Give AA or DL, or UA a run for the money? They can squash little JB like a bug. They will never be a major player in transcon routes till they server SFO and LAX.


User currently offlineDeltaSFO From United States of America, joined Nov 2000, 2488 posts, RR: 22
Reply 10, posted (12 years 11 months 3 weeks 3 days 7 hours ago) and read 2138 times:

Wow, SFOintern, good use of the vernacular. Very descriptive.  Big thumbs up


It's a new day. Every moment matters. Now, more than ever.
User currently offlineLowfareair From , joined Dec 1969, posts, RR:
Reply 11, posted (12 years 11 months 3 weeks 3 days 6 hours ago) and read 2115 times:

Greg: I know a guy in NYC who flies once/month to San Fran on his own money. Would he rather pay the $2500 and get FF miles, or pay $500 on B6 but w/No FF miles? The last year says his choice.

User currently offlineMah4546 From Sweden, joined Jan 2001, 32899 posts, RR: 71
Reply 12, posted (12 years 11 months 3 weeks 3 days 4 hours ago) and read 2090 times:

Greg, add LGA/EWR and jetBlue is still #4 on Miami-New York City, after American, Continental, and Delta. And yes, I am a frequent flyer, I just perfer saving money over getting FF points, though, like I said, I have NOTHING against the majors, AA is my favourite airline, and unless I am flying to NYC, I do fly them.


a.
User currently offlineGreg From United Kingdom, joined May 2005, 0 posts, RR: 0
Reply 13, posted (12 years 11 months 3 weeks 3 days 4 hours ago) and read 2090 times:

You may not like what I say...but it's right. Jet Blue has a limited fleet and destinations. Being number four in a market is like being number 14. I don't wish them any ill-will...I just don't see them as being as successful as some of the other posters. They tend to have a cult-like following which is kind of strange...

SFO_Intern is free to call me anything he likes--it's his opinion. I don't take much stock in what students say until they can back that education with some success. So, to me he's basically a zero.


User currently offlineCPDC10-30 From United Kingdom, joined Feb 2000, 4785 posts, RR: 23
Reply 14, posted (12 years 11 months 3 weeks 3 days 4 hours ago) and read 2070 times:

Greg, you're a zero to all of us here, so its a washout I guess  Smile/happy/getting dizzy

User currently offlineDazed767 From United States of America, joined May 1999, 5498 posts, RR: 51
Reply 15, posted (12 years 11 months 3 weeks 3 days 3 hours ago) and read 2064 times:

They are doing well, and they will grow larger. They are a new airline, they aren't going to have 250 planes and 60 destinations like WN. They expanded quickly in almost 2 years and are doing good....18 planes and 17 destinations...not bad. May all your skies be JETBLUE, Greg  Acting devilish

User currently offlineLsjef From , joined Dec 1969, posts, RR:
Reply 16, posted (12 years 11 months 3 weeks 3 days 3 hours ago) and read 2048 times:

Greg, please lay low while the loudmouths calm down. It's a pity to see the JB zealots so predictably trading punches with those who see things more conservatively (and, I think, more realistically). The facts just fade away, and the thread evolves into a war...

As for facts, SWA had a fleet of 353 as of last June...not 250.


User currently offlineSFOintern From United States of America, joined Oct 2001, 770 posts, RR: 5
Reply 17, posted (12 years 11 months 3 weeks 3 days 2 hours ago) and read 2037 times:

Greg,

In the coming years, as I enter my chosen career, I hope to prove your ass wrong. By then you should be fully rotting in hell.

And for the record, I am not a jB zealot. You are an idiot for thinking that I am directly comparing jB to WN.

All I was trying to ask was how jB is using WN strategies, and modifying them for its operation. Gauging jetBlue's success, while maybe premature, is something that gets more definite as time goes by.

All the trade magazines are trumpeting Neeleman's success, so do you think they're being premature too?

By and large, there is no question WN is the beacon of airline success... but that does not mean jetBlue couldn't be following WN's path.


User currently offlineSFOintern From United States of America, joined Oct 2001, 770 posts, RR: 5
Reply 18, posted (12 years 11 months 3 weeks 3 days 2 hours ago) and read 2026 times:

If you also notice, jetBlue picked the right time to enter the transcontinental market when it did. Tower Air folded some time ago, and there had been low-fare transcontinental demand that had not been met.

Interestingly, jetBlue's trunk routes (with the exception of JFK-ROC) are mimicking Tower's trunk routes... JFK-Florida and to the West Coast. Tower also flew San Juan flights, so low-fare JFK-SJU flights are a feasible possibility.

As much as I hate to say this, jetBlue is hurting the Big Three. Although the pain may be small at this point, it could get worse. My beloved United will have its yields eroded (even if slightly) on its SFO/LAX-IAD transcons when jB starts IAD-OAK/LGB.

This is why United is starting IAD-OAK. If United didn't see a potential threat, it wouldn't be making a defensive move.


User currently offlineSccutler From United States of America, joined Jan 2000, 5538 posts, RR: 28
Reply 19, posted (12 years 11 months 3 weeks 3 days 2 hours ago) and read 2023 times:

It's all about service, and (just like WN), if JB can continue to provide reliable service, well-presented and at a competetive cost, they have a good shot.

As for those who claim the absence of a FF program materially affects JB's prospects, I beg to differ; a FF program is one way to differentiate from similar competitors; JB does so with price, service and... what, attitude? Something.

The strategy of starting with a big pile of cash (something Neeleman could do because of the credibility he gained with Morris); and growing big enough to have substantial frequency on some core routes, appears to be a well-conceived one; even when times were great, it is tough for a major to "squash" a competitor whose costs are som much lower. Now, big traditional airlines are having to conserve capital, and can scarcely afford to throw money at losing routes, just to spank a competitor whose costs are lower.

But I agree- the capital markets are in control now, and if JB can live through the next 18 months or so, I think they have the goods to be big.



...three miles from BRONS, clear for the ILS one five approach...
User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 20, posted (12 years 11 months 3 weeks 3 days 2 hours ago) and read 2022 times:

It seems like the last resort of those who are unable to successfully defend their points from valid criticism ends up being personal attacks. If you don't like what someone has to say - just call them a "hemorrhaged anus" or a "zero" - yeah, that will definitely put him in his place...NOT.

That said, while it seems that jetBlue is doing a good job finding niches at JFK and LGB, it still remains to be seen how effective that strategy will be in the long term. Unless the rules change at LGB, jetBlue will be limited by the 27 daily slots they possess there. By comparison, similar-sized Southwest stations are PDX (33 daily flights), PVD (28 daily flights), BHM, TUL (26 daily flights each), ISP, SDF, and OKC (23 daily flights each). I just don't see how you can have a "hub" with an operation that small unless you're America West.

Moreover, while I think JFK was an excellent choice for a home base, it will become a considerably more challenging environment in the next ten years. Growth at New York City's other two major airports (LGA and EWR) will certainly be constrained by capacity limitations; this is why both AA and DL put forth plans for significant expansions at JFK. And what will the operational environment at JFK be like when B6 has hypothetically expanded to 200 departures, while AA and/or DL have also expanded similarly (and don't forget the afternoon/evening rush hours)?

And, of course, the question remains: Where do they go after JFK/LGB/FLL?


User currently offlineSFOintern From United States of America, joined Oct 2001, 770 posts, RR: 5
Reply 21, posted (12 years 11 months 3 weeks 3 days 2 hours ago) and read 2008 times:

ScottB--

Greg has consistently based arguments on who is posting, quickly criticizing that even a valid point (whether wrong or not) is made by a teenager.

While I shouldn't be taking it personally, I've found his judgment of me as simply a "student nobody" as quite annoying.

Also, it is exactly the question of what to do after the three core cities that makes me wonder if jB is looking at international opportunities.


User currently offlineLsjef From , joined Dec 1969, posts, RR:
Reply 22, posted (12 years 11 months 3 weeks 3 days 1 hour ago) and read 1999 times:

SFOintern:

Greg can be pretty blunt in his opinions, but I think you are really over-reacting to him. Please take a little time away from this thread and reread what has been posted, and I think you will agree.

We all have our opinions, and we all enjoy the right to express them. But, none of us need to react to opinions with anatomical references and other crudities.


User currently offlineSFOintern From United States of America, joined Oct 2001, 770 posts, RR: 5
Reply 23, posted (12 years 11 months 3 weeks 3 days 1 hour ago) and read 1998 times:

Lsjef--

In retrospect, I did overreact and resorted to crassness, yes. But quite possibly you haven't read other threads where Greg's comments merit his place on other user's "most disrespected users" lists.

OK, I'm over it. Back to the topic... what about international service by jetBlue? What are some barriers to entry, or some potential firm-specific advantages for this type of service? (can you tell I've been thinking of econ a little too much lately?)


User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 24, posted (12 years 11 months 3 weeks 3 days 1 hour ago) and read 1993 times:

"In the coming years, as I enter my chosen career, I hope to prove your ass wrong. By then you should be fully rotting in hell" - yes, that's really quite mature.

Looking at "international opportunities" is certainly not following Southwest's strategy. The problem with international flying is that it introduces a quite a number of additional costs - like dealing with a different set of laws, multiple currencies, hiring bilingual staff to dealing, or customs and immigration. And most "international opportunities" beyond the Caribbean, Mexico, and Canada would require a new fleet type with additional range - again, another departure from Southwest's strategy.

Arguing that jetBlue is picking up passengers from the failure of Tower Air isn't entirely reassuring; after all, Tower failed. If jetBlue can do it while keeping RASM above CASM, then that's fine.


25 Post contains images Aloha 737-200 : Stop fighting guys. I have full faith in jetBlue and that it will do rather well in the following years nd yes I do, in some ways, think they are foll
26 Tango-Bravo : Aloha 737-200: Interesting thought about the possibility of jetBlue eventually flying to Europe. For starters, they will have already established plen
27 SFOintern : ScottB-- No, possible international expansion is not following Southwest's strategy. HOWEVER, jB could modify a southwest fundamental by making reason
28 Lsjef : It seems to me that we really aren't discussing "SWA fundamentals" as much as we are discussing smart tactics to deal with the enormous shortcomings o
29 Coronado : Sun Country's new 737-800 with all leather seating are a welcome addition to MSP, which SWA and JetBlue have to date avoided like a plague due to NWA'
30 Post contains images Mah4546 : Scott, jetBlue does not need anything more than LGB/FLL/JFK. Right there they have in thier hands America's largest O&D markets. While I do think A321
31 LoneStarMike : Our local NBC affiliate in Austin just ran a 30 second story on JetBlue. The story basically said that they were the first U.S. airline to begin insta
32 SFOintern : Lsjef-- Re: WN's growth... its CEO Parker has mentioned how its increasing size is starting to make operations cumbersome. It is hard for WN to make c
33 Lindy field : Do you people think that JetBlue will be able to capitalize on United's withdrawal from late-night and early morning operations? As a fairly frequent
34 Post contains images Aloha 737-200 : A330s WOULD be an interesting prospect, however, that's quite far off, IF it happens. If jetBluie is smart, they will avoid SWA at all costs, ALL COST
35 Greg : There is some misunderstanding that I want JetBlue to fail. This is not the case. I just don't see them as the Cinderella story that they portray to t
36 LGB Photos : Well all I can say is that before 9/11 jetBlue was running 97% load factor in and out of Long Beach(LGB) and now as of 10/16 their load factor is some
37 DCA-ROCguy : Greg, you're right that the Cartel carriers are better able to maintain a cash-flow fare battle with JetBlue if they so desired. Before Sept. 11, we w
38 Greg : I'll agree. To a point. There won't be any predatory pricing to eliminate competition. It was too effective! However, the majors can afford to slowly
39 Post contains images SFOintern : Believe it or not, I actually do agree with your LGB theory, much as I hate to say it Jim, Interesting point vis-a-vis the politics of airlines at fir
40 USAFHummer : Just a note, I, USAFHummer, am NOT the same person as the "Greg" that is posting...although my name happens to be Greg and I sign my threads with that
41 ScottB : I will simply have to respectfully disagree with SFOintern about Southwest's potential for growth in the future. While it is certainly true that maint
42 SFOintern : ScottB-- I respect your rebuttals. And I do agree then, that with more sophisticated computer programs, WN will be able to tweak its schedules efficie
43 SFOintern : Re: FLL Shoot, don't forget CO's best laid plans there. They do have a new terminal of their own now, remember.
44 Mah4546 : SFOInterm, CO does have a nice mini operation out of FLL, but I really don't think it will go anywhere. On mainline, all there is four destinations -
45 DCA-ROCguy : Your theory does offer one plausible reason that JetBlue entered LGB. There aren't direct route overlays by the majors. So JetBlue will have firmer co
46 Greg : Actually, I don't think LGB was the right move if they were strictly looking for a West Coast presence. Ontario, although somewhat in WN territory, wo
47 Post contains images N509JB : In the immortal words of Popeye "I've stands all I can, and I can’t stands no more" Honestly Greg, your complete ignorance of facts and spewing
48 Post contains images Pilot1113 : N509JB-- That's great!!! LOL! You've earned a place on my renovated buddy list! - Neil Harrison
49 Post contains images Dazed767 : I bow down to the. "We're not worthy, we're not worthy". I do not think it could be better said that that.
50 Airwarrior : Well said N509JB. I got a good chuckle out of that. Dont let this Greg idiot ruin your pride in your airline. I have flown you about 20 times now and
51 Lsjef : N509JB: you have actually only proven Greg's point...that JetBlue has an incredibly zealous following on this forum, and that zealots tend to be narro
52 N509JB : "you have actually only proven Greg's point...that JetBlue has an incredibly zealous following on this forum, and that zealots tend to be narrowly myo
53 Lsjef : N509JB, if I may clarify... ...the zealots of whom I wrote are not the customers of JetBlue but people such as yourself who consistently come across a
54 N509JB : "the zealots of whom I wrote are not the customers of JetBlue but people such as yourself who consistently come across as fanatical proponents of thei
55 174thfwff : The people who hate Jet Blue are... A) People who like being ripped off. B) People who have not flown them. C) People who are hated in real life, so t
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