usair330
Posts: 691
Joined: Thu Mar 14, 2002 12:48 pm

JetBlue Taking A Chance?

Thu Jul 14, 2005 2:43 pm

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.
 
StevenUhl777
Posts: 3281
Joined: Sun Jul 08, 2001 11:02 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 2:46 pm

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
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
planemannyc
Posts: 939
Joined: Wed Aug 06, 2003 12:54 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 2:54 pm

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
 
DB777
Posts: 864
Joined: Wed Apr 11, 2001 1:16 pm

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:09 pm

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
 
planemannyc
Posts: 939
Joined: Wed Aug 06, 2003 12:54 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:15 pm

As long as it does not become another ATL.....at least the come armed with 15 flighys daily this time.

Best,

Wasim / Planemannyc
 
JBLUA320
Posts: 2999
Joined: Mon May 27, 2002 8:51 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:25 pm

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
 
planemannyc
Posts: 939
Joined: Wed Aug 06, 2003 12:54 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:33 pm

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
 
padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:38 pm

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.
 
planemannyc
Posts: 939
Joined: Wed Aug 06, 2003 12:54 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 3:47 pm

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
 
B6FA4ever
Posts: 752
Joined: Sun Aug 24, 2003 6:49 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 4:19 pm

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
 
lowecur
Posts: 512
Joined: Wed Jan 26, 2005 1:18 pm

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 8:09 pm

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.
 
goingboeing
Posts: 4727
Joined: Sat Dec 04, 1999 1:58 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:21 pm

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?
 
luvfa
Posts: 334
Joined: Wed May 25, 2005 10:05 pm

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:23 pm

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 avatar
chrisnh
Posts: 3429
Joined: Tue Jun 29, 1999 3:59 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:25 pm

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
 
LGAtoIND
Posts: 416
Joined: Sun Jan 23, 2005 5:32 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:31 pm

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".
 
luvfa
Posts: 334
Joined: Wed May 25, 2005 10:05 pm

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:33 pm

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.
 
dartland
Posts: 514
Joined: Wed Apr 20, 2005 5:09 am

RE: JetBlue Taking A Chance?

Thu Jul 14, 2005 10:48 pm

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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