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janders
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JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:05 pm

JetBlue Airways Corp. will offer its own version of a basic economy fare, saying its “success is at risk” if it doesn’t match the discounted, no-extras tickets being sold by larger rivals.

The change will be part of a broader shakeup of JetBlue’s fare system that will debut next year, President Joanna Geraghty told airline employees in a message Friday.

“At JetBlue, we never liked the ‘no frills’ approach,” Geraghty said. But “customer behavior suggests our success is at risk if we do not disrupt this market by lowering fares without sacrificing the experience.”


https://www.bloomberg.com/news/articles ... fare-class

Yet again another example that price trumps service in eyes of bulk of consumers.
"We make war that we may live in peace." -- Aristotle
 
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lightsaber
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:16 pm

Unfortunately, the search engines for coach only highlight basic economy. Until the airlines start offering a comparison with amenities, the search have become worthless for anyone looking for more than Y- but not business.

Sadly, they must put more seats (reduce pitch) as that is what the market demands.

Lightsaber
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airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:24 pm

These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.
Last edited by airliner371 on Fri Sep 28, 2018 5:26 pm, edited 1 time in total.
 
B752OS
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:25 pm

If they cut the pitch on Even More Space seats (already one of the best values in the US airline business) this will really hurt them in my eyes.
 
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seabosdca
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:26 pm

These days, despite the extra hassle, I'm booking by visiting airline websites directly. There are rarely more than three airlines that make any sense for any given trip. I can avoid Y- when not booking AS, and also get so much more context.
 
Turnhouse1
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:30 pm

The other downside of this is that many corporate policies mandate 'cheapest' over any other criteria. Therefore people flying on business will have to book this. Which is bad for the passenger stuck in a middle seat, and potentially bad for JetBlue as they might have paid a bit more, though I suppose if they just flew another carrier basic economy because it was cheaper then JetBlue are benefiting.
 
airzona11
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:32 pm

If you are a consumer searching prices, and the search engines predominantly display the cheapest option, what do you expect? The airlines need to figure this game out. It is not on the consumer to need to do secondary research, "oh economy no longer means economy, I need to look for something called economy basic." etc.

Consumers are not to be blamed, airlines are the one offering the products and competing in the market.

Just wait until they start adding fuel surcharges back in.
 
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LAXintl
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:33 pm

Makes sense.
B6 needs to work on reinventing itself in the short run to generate better numbers. The start-up honeymoon is long over and cost have risen while revenues trail peers.

airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.


Actually, in many ways SWA was one of the first with basic economy pricing. They have long had many pricing buckets with bundled benefits. Consumers can choose from between the "Wanna Get Away', 'Anytime' and 'Biz select' buckets with their own varying perks.
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airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:40 pm

LAXintl wrote:
airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.


Actually, in many ways SWA was one of the first with basic economy pricing. They have long had many pricing buckets with bundled benefits. Consumers can choose from between the "Wanna Get Away', 'Anytime' and 'Biz select' buckets with their own varying perks.

No doubt, though I don't think you can consider it basic economy anymore. I think you'd agree that their lowest price bundle is far more generous than the others. I mean 'Wanna Get Away' is essentially a mix between 'Blue Plus' and 'Blue Flex.'
 
tphuang
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:43 pm

Sad day for JetBlue. The management bows down to Wall Street again.
 
micstatic
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:52 pm

Hah. They call themselves a disruptor. Maybe once.
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AA94
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 5:59 pm

tphuang wrote:
Sad day for JetBlue. The management bows down to Wall Street again.


Not sure what people really expect here. The street only cares about quarterly numbers, not long-term strategy or vision. When you're a legacy airline with an established critical mass, you buy yourself some more wiggle room. When you're JetBlue, with less than 10% domestic market share and trying to prove out a niche strategy, you have considerably less wiggle room.

Costs are rising, and revenues are stagnant. Time and time again, customers show that at the end of the day, they'll likely be flying the cheapest fare. In a perfect world, JetBlue wouldn't need to kowtow to Wall Street, but that's not the world we live in. The business may be healthy, but it's not booming. And investors hate that.
 
bob75013
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:10 pm

airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.


My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.
 
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Dieuwer
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:27 pm

B752OS wrote:
If they cut the pitch on Even More Space seats (already one of the best values in the US airline business) this will really hurt them in my eyes.


If they cut the pitch on EMS, then you might as well not fly B6 and pick one of the US3.
JetBlue really needs to tread carefully here as to not kill the goose with the golden eggs.
 
flyguy84
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:30 pm

bob75013 wrote:
airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.


My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.

I'd be interested to see if Southwest does follow suit - if they will charge for bags on the deep discount fares. Southwest does need to compete in the fare game - as their fares are really no longer competitive for the most part.
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Cubsrule
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:35 pm

flyguy84 wrote:
bob75013 wrote:
airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.


My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.

I'd be interested to see if Southwest does follow suit - if they will charge for bags on the deep discount fares. Southwest does need to compete in the fare game - as their fares are really no longer competitive for the most part.


Why do they need to compete in the fare game? They are still making money hand over fist.
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aaflyer777
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:35 pm

Sounds a lot like they're going with Deltas version of Basic Economy which really isn't that bad. Can't choose your seat and you can't change your ticket. Could have been a lot worse, especially if they went with AA or UAs version where they charge your for carry on bags.
 
chonetsao
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:35 pm

The day you become one of 'them', the same moment you loose your competitive advantage.
 
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enilria
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:42 pm

lightsaber wrote:
Unfortunately, the search engines for coach only highlight basic economy. Until the airlines start offering a comparison with amenities, the search have become worthless for anyone looking for more than Y- but not business.

Sadly, they must put more seats (reduce pitch) as that is what the market demands.

Lightsaber

Yup. This is exactly why it happened. You can have a higher price than NK/F9 and be ok, but more than a legacy is death. You have to have a product at their price point.
 
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:43 pm

bob75013 wrote:
airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.


My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.

Very hard for WN to match as there is no seat assignment to begin with. This puts WN in quite a hole.
 
bob75013
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:44 pm

Cubsrule wrote:
flyguy84 wrote:
bob75013 wrote:

My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.

I'd be interested to see if Southwest does follow suit - if they will charge for bags on the deep discount fares. Southwest does need to compete in the fare game - as their fares are really no longer competitive for the most part.


Why do they need to compete in the fare game? They are still making money hand over fist.


I'm guessing that a fair number of people will start flying carriers that are significantly cheaper -- affecting load factor and profit. That's why Same as Jet Blue.

It's not Spirit , Allegiant or Frontier that concern me, but when the legacies and now Jet Blue start offering a superior product at ULCC prices, then that is a different story.

As I said in my original post, if I can save almost $200 on a Dallas/Chicago roundtrip by flying United (maybe $100 after fees), I have to think long and hard about why WN is the better option,
Last edited by bob75013 on Fri Sep 28, 2018 6:51 pm, edited 3 times in total.
 
Kno
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:46 pm

Ugh I get that people are voting with their wallets but I really hate this bare bones Y movement.

An apathetic culture has been generated amongst the flying public where everyone expects a horrible experience no matter what and says F it it’s going to be awful no matter what so I might as well go with the best price.

A lot of these modern day travelers are booking with stupidity and instant gratification - not stopping to think that all the extra fees tacked on to their basic fare once they show up at the airport will cost the same or more than just getting an upgraded ticket in advance.

I see the argument for having the freedom of more choices in what you want to spend and how you want to experience travel, but I still have my opinion. Oh well I’ll pay the extra 20-40 up front to pick my seat and pop my bag in the overhead bin with no worries.
 
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:48 pm

Dieuwer wrote:
JetBlue really needs to tread carefully here as to not kill the goose with the golden eggs.


There are no golden eggs. That's the problem. Goose is producing bronze eggs at best.

B6 needs to do something to be more competitive and produce better financial numbers especially since cost are only going to rise as fleet ages and unions agreements become fully apparent on the balance sheet.
"We make war that we may live in peace." -- Aristotle
 
MIflyer12
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 6:56 pm

lightsaber wrote:
Unfortunately, the search engines for coach only highlight basic economy. Until the airlines start offering a comparison with amenities, the search have become worthless for anyone looking for more than Y- but not business.


Orbitz will identify a Delta basic economy fare in its itinerary/price list. There's a hyperlink to Basic Economy restrictions.

Checked bag Fee applies
Personal item Included
Carry-on bag Included
Seat choice Not allowed
Cancellations or changes Not allowed

Google Flights does not identify Delta BE fares.

We could fault display engines for not giving fuller detail. We could fault Southwest for not appearing in consumer search engines at all.
 
dbo861
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:03 pm

enilria wrote:
bob75013 wrote:
airliner371 wrote:
These decisions are really helping Southwest solidify their own position in the market. Southwest went from the original no-frills airline to the airline that won't sacrifice comfort or flexibility for price. It's really fascinating.

In the end, I think there is a case for an airline like Southwest to charge slightly more for every customer to know exactly what they're getting: a solid, flexible, comfortable and friendly experience. If you're not an elite member on these other carriers, you can trust that no matter what, your experience on Southwest is nearly guaranteed. It's nothing over-the-moon, but it's solid and reliable, and if I can be just slightly hyperbolic to make the point, it's humane.


My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.

The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.

I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.

Very hard for WN to match as there is no seat assignment to begin with. This puts WN in quite a hole.


I've thought about this. Not that I'm advocating it, but Southwest could add their own version of Basic Economy. I could see them adding a D boarding group for those who purchase the Basic economy ticket. Get rid of free bags, no change fees, and free cancelation for those in this fare group.

I love Southwest's "Transfarency" policy, but I really don't think it's going to last forever.
 
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LuxuryTravelled
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:09 pm

The only way JetBlue could be a disrupter again would be to attack premium transatantic.
 
Jshank83
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:09 pm

MIflyer12 wrote:

Google Flights does not identify Delta BE fares.


They do after you click on a fare. Then you can choose basic or regular and it shows which each includes. But I do wish there was a way to filter economy and basic economy in the view with all the airlines shown.
 
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Dieuwer
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:10 pm

janders wrote:
Dieuwer wrote:
JetBlue really needs to tread carefully here as to not kill the goose with the golden eggs.


There are no golden eggs. That's the problem. Goose is producing bronze eggs at best.

B6 needs to do something to be more competitive and produce better financial numbers especially since cost are only going to rise as fleet ages and unions agreements become fully apparent on the balance sheet.


So you think B6 will produce better financial numbers by becoming an also-ran?
 
heavymetal
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:12 pm

tphuang wrote:
Sad day for JetBlue. The management bows down to Wall Street again.


Better that they do it on their own accord, in a manner they can control, than be forced into it by activist shareholders. They can roll it out in as friendly and "JetBlue" of a way as possible.
 
slcdeltarumd11
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:13 pm

The race to the bottom continues! I still think and hope southwest can resist joining his race.

People say one thing about airlines and services when you ask them, but they do book a very different way.
 
airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:14 pm

dbo861 wrote:
I love Southwest's "Transfarency" policy, but I really don't think it's going to last forever.

People have been saying this for over a decade now and bags (<- plural) still fly free. Not saying it won't happen, but there's no indication it will at the moment, the airline is producing near-record profits.

JetBlue's issue is they aren't doing so hot. They're profitable, quite profitable, but they have plenty of room to do better. At the end of the day, JetBlue is a leisure-centric airline whether they like it or not, and leisure travelers are price sensitive. And yes, Southwest is leisure-centric too, but I think you'd be surprised how many business travelers fly Southwest... particularly small and "hipster" businesses.
 
tphuang
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:18 pm

AA94 wrote:
tphuang wrote:
Sad day for JetBlue. The management bows down to Wall Street again.


Not sure what people really expect here. The street only cares about quarterly numbers, not long-term strategy or vision. When you're a legacy airline with an established critical mass, you buy yourself some more wiggle room. When you're JetBlue, with less than 10% domestic market share and trying to prove out a niche strategy, you have considerably less wiggle room.

Costs are rising, and revenues are stagnant. Time and time again, customers show that at the end of the day, they'll likely be flying the cheapest fare. In a perfect world, JetBlue wouldn't need to kowtow to Wall Street, but that's not the world we live in. The business may be healthy, but it's not booming. And investors hate that.


I expected them to do this, but it's still sad. And bowing to wall street really has very little to do with market share. AA/DL tows the line, whereas Kirby just went ahead with his expansion plan anyway and succeeded. We will see how this works out. I would more concerned if they start cutting routes like AS.

janders wrote:
Dieuwer wrote:
JetBlue really needs to tread carefully here as to not kill the goose with the golden eggs.


There are no golden eggs. That's the problem. Goose is producing bronze eggs at best.

B6 needs to do something to be more competitive and produce better financial numbers especially since cost are only going to rise as fleet ages and unions agreements become fully apparent on the balance sheet.


That's the thing. They are very competitive. Their RASM performance has been good all year. The've been hurt by fuel price going up more than most airlines since they don't do any hedging. They run some routes that are loosing too much money (like Cuba and LGB) and Q2 was a bad quarter. But Q1 they were definitely above average.

Having the most legroom in Y and Y+ helps them generate revenue premium in BOS and JFK. They'd risk loosing that revenue premium if they back away from it.
 
Blerg
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:19 pm

People are saying that B6 isn't doing so well or they could be doing better. What exactly is the problem here? Is the main concern that they are not as profitable as some other airlines? Or their profits are not living up to the standards of some Wall Street guys who want larger bonuses? The last time I checked B6 was making healthy profits.
 
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Dieuwer
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:21 pm

One way or the other, if JetBlue is going to cheapen its product/brand image, I bet that it will be Delta who will be laughing all the way to the bank in BOS and JFK.
 
airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:26 pm

Blerg wrote:
People are saying that B6 isn't doing so well or they could be doing better. What exactly is the problem here? Is the main concern that they are not as profitable as some other airlines? Or their profits are not living up to the standards of some Wall Street guys who want larger bonuses? The last time I checked B6 was making healthy profits.

Those profits allow them to reinvest in the airline. Without it, you stop innovating. And yes, a lot of the reason this is happening is because of those Wall Street guys want larger bonuses. I didn't say it was a problem for consumers, but it is a problem for the airline.
 
tphuang
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:27 pm

Blerg wrote:
People are saying that B6 isn't doing so well or they could be doing better. What exactly is the problem here? Is the main concern that they are not as profitable as some other airlines? Or their profits are not living up to the standards of some Wall Street guys who want larger bonuses? The last time I checked B6 was making healthy profits.


Well, they had a bad Q2, because the fuel prices shot up more for them than most other airlines and revenue didn't growth. And then, they said they are sticking by mid to high single digit growth at the earnings call, which caused their stock prices to drop. Before that, they had been above average for many quarters in a row. In terms of revenue growth, they've been better than AS/NK/WN this year while behind UA/DL. It's pretty good. If they flew TATL, it'd be up more. But I digress.

So they have investor day coming up and they've got to come up with things to make investors happy. Check the previous 2 investor day. We got cabin densification + no more free bags from that. So their new things is basic economy.

I fully expect them to cut a few underperforming cities. Only thing is I hope the Europe flight will be announced soon.
 
Cubsrule
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:28 pm

bob75013 wrote:
Cubsrule wrote:
flyguy84 wrote:
I'd be interested to see if Southwest does follow suit - if they will charge for bags on the deep discount fares. Southwest does need to compete in the fare game - as their fares are really no longer competitive for the most part.


Why do they need to compete in the fare game? They are still making money hand over fist.


I'm guessing that a fair number of people will start flying carriers that are significantly cheaper -- affecting load factor and profit. That's why Same as Jet Blue.

It's not Spirit , Allegiant or Frontier that concern me, but when the legacies and now Jet Blue start offering a superior product at ULCC prices, then that is a different story.

As I said in my original post, if I can save almost $200 on a Dallas/Chicago roundtrip by flying United (maybe $100 after fees), I have to think long and hard about why WN is the better option,


Help me out with why that evidently hasn't happened to date but yet you believe it will happen now.
I can't decide whether I miss the tulip or the bowling shoe more
 
airbazar
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:30 pm

bob75013 wrote:
My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).

I don't think they need or will follow suit because WN doesn't sell through online third party sites so they are not really competing on fares that way. WN are in a market all to their own where people just go to their website under the assumption or belief that it will be cheaper (because the adds say so), or because it's the only option.
The basic economy fares are being driven by millennials who on average make 20% less money than the babyboomer generation at the same age while carrying significantly more debt. As a result they can't afford the fares that older generations can afford but they are the future market. So basic economy is the way airlines are finding to attract the future generation. One survey I saw said that 27% of millennials would fly while standing if it was cheaper. Just be glad we're not there yet.
 
msycajun
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:32 pm

I've heard that B6 execs have been spotted visiting the F9 headquarters. Make of that what you will.
 
WaywardMemphian
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:35 pm

airzona11 wrote:
If you are a consumer searching prices, and the search engines predominantly display the cheapest option, what do you expect? The airlines need to figure this game out. It is not on the consumer to need to do secondary research, "oh economy no longer means economy, I need to look for something called economy basic." etc.

Consumers are not to be blamed, airlines are the one offering the products and competing in the market.

Just wait until they start adding fuel surcharges back in.



Southwest avoids booking search engines like Kayak. It doesn't seem to hurt them
 
bob75013
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:36 pm

Cubsrule wrote:
bob75013 wrote:
Cubsrule wrote:

Why do they need to compete in the fare game? They are still making money hand over fist.


I'm guessing that a fair number of people will start flying carriers that are significantly cheaper -- affecting load factor and profit. That's why Same as Jet Blue.

It's not Spirit , Allegiant or Frontier that concern me, but when the legacies and now Jet Blue start offering a superior product at ULCC prices, then that is a different story.

As I said in my original post, if I can save almost $200 on a Dallas/Chicago roundtrip by flying United (maybe $100 after fees), I have to think long and hard about why WN is the better option,


Help me out with why that evidently hasn't happened to date but yet you believe it will happen now.


Answer: because Wanna Get Away fares WERE competitive until about two months ago. They no longer are.
 
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Dieuwer
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:37 pm

airbazar wrote:
The basic economy fares are being driven by millennials who on average make 20% less money than the babyboomer generation at the same age while carrying significantly more debt. As a result they can't afford the fares that older generations can afford but they are the future market. So basic economy is the way airlines are finding to attract the future generation. One survey I saw said that 27% of millennials would fly while standing if it was cheaper. Just be glad we're not there yet.


Then perhaps millennials should pay off their debts first and not fly at all.
 
flymia
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:37 pm

Wow, this sucks. The only reason I would spend a little more on JetBlue was they had no scam of basic economy.

We all need to understand it is a scam. I just flew FLL-ORH-FLL for $204/rt. I got a carry on bag and picked my seat.

When JetBlue starts basic economy that same flight will be $204.00 round trip! Where "JetBlue Choice" or whatever pathetic name they have to pick a seat and change a date will be $20-$30 more.

This is NOT a change in fare structure. This is adding a fee to pick a freaking seat.

As for removing leg room I saw that coming. So long as they are 32-inches that is all you can ask for. It is better than anyone else. Though I suspect the A220 will have 31/30 inches.

There are no longer much choice in airlines. It is all the same garbage at this point other than Southwest.
"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)
 
airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:40 pm

msycajun wrote:
I've heard that B6 execs have been spotted visiting the F9 headquarters. Make of that what you will.

A merger/acquisition is on the horizon. Either they get taken over by AS, or they take over. Not necessarily tomorrow, or the day after, but it's coming.

Yeah, I'm gonna get a bunch of people responding saying "how can we have another merger, I hope it doesn't happen," but you have to see it coming, JetBlue is running out of expansion opportunity. Even if they go TATL, JFK and BOS only have so much room and they aren't set-up to start a new hub elsewhere. F9 would bring p2p flying, while AS would create a national carrier that can more effectively compete with the larger carriers for business travel, which is where the money is at.
 
Cubsrule
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:42 pm

bob75013 wrote:
Cubsrule wrote:
bob75013 wrote:

I'm guessing that a fair number of people will start flying carriers that are significantly cheaper -- affecting load factor and profit. That's why Same as Jet Blue.

It's not Spirit , Allegiant or Frontier that concern me, but when the legacies and now Jet Blue start offering a superior product at ULCC prices, then that is a different story.

As I said in my original post, if I can save almost $200 on a Dallas/Chicago roundtrip by flying United (maybe $100 after fees), I have to think long and hard about why WN is the better option,


Help me out with why that evidently hasn't happened to date but yet you believe it will happen now.


Answer: because Wanna Get Away fares WERE competitive until about two months ago. They no longer are.


WGA fares have been uncompetitive in the markets in which I fly for years. Did they change in your markets?
I can't decide whether I miss the tulip or the bowling shoe more
 
airliner371
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:43 pm

flymia wrote:
There are no longer much choice in airlines. It is all the same garbage at this point other than Southwest.

And that's where Southwest wins for positioning itself that way. Until a new disrupter comes in and screws everything up for everyone... MOXY!?
 
heavymetal
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:44 pm

tphuang wrote:

I expected them to do this, but it's still sad. And bowing to wall street really has very little to do with market share. AA/DL tows the line, whereas Kirby just went ahead with his expansion plan anyway and succeeded. We will see how this works out. I would more concerned if they start cutting routes like AS.


The Street has beaten down AAL for their heavy debtload, even while they toe the party line of capacity discipline. Delta can do nearly as they please because they deliver superior results in just about every metric imaginable: operational performance, financial performance, reinvesting in the business and employees, and returning capital to shareholders.

It remains to be seen whether or not the UAL expansion plan succeeds, so to say it has "succeeded" already is a tad premature. One good quarter, 2Q 2018, does not make a definitive case, especially when the year-over-year comps for United had such a low barrier that things would be much worse if they hadn't beaten them.

It will take a solid 2-3 years, minimum, to really understand if Kirby's strategy at UAL is paying off. I'm not saying it won't pay off, but to declare success already is premature.

tphuang wrote:
That's the thing. They are very competitive. Their RASM performance has been good all year. The've been hurt by fuel price going up more than most airlines since they don't do any hedging. They run some routes that are loosing too much money (like Cuba and LGB) and Q2 was a bad quarter. But Q1 they were definitely above average.

Having the most legroom in Y and Y+ helps them generate revenue premium in BOS and JFK. They'd risk loosing that revenue premium if they back away from it.


Having the most legroom in Y and Y+ helps them generate a revenue premium, perhaps, but it also is a huge contributing factor to their higher cost per seat mile vs. relative peers like Alaska and Southwest. Based on margins alone, historically, JetBlue has not been appropriately compensated for that generous legroom. Alaska and Southwest have generally had better margins, which clearly shows that either a) JetBlue cannot control its costs, b) JetBlue isn't being paid enough of a premium for the extra legroom, or c) a combination of both.
Last edited by heavymetal on Fri Sep 28, 2018 8:03 pm, edited 1 time in total.
 
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Dieuwer
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 7:52 pm

Well, if the logic is that: cramming more seats = $$$ then maybe JetBlue should start shrinking legroom in Mint too and cram another Mint row in there... :roll:
 
bob75013
Posts: 818
Joined: Tue Jun 23, 2015 5:05 pm

Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 8:00 pm

Cubsrule wrote:
bob75013 wrote:
Cubsrule wrote:

Help me out with why that evidently hasn't happened to date but yet you believe it will happen now.


Answer: because Wanna Get Away fares WERE competitive until about two months ago. They no longer are.


WGA fares have been uncompetitive in the markets in which I fly for years. Did they change in your markets?


Yup by a factor of 2x to 3x.

I just flew DFW/ORD RT on United (economy, not discounted economy) for $155. I'm United 1K so I get a big economy seat up front at a minimum. In fact, I got a comped upgrade to first on the outbound leg.
The same Wana Get Away fare on Southwest would have been just short of $300
 
heavymetal
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Re: JetBlue to add Basic Economy product. Company “success is at risk” if not matches others

Fri Sep 28, 2018 8:02 pm

Dieuwer wrote:
Well, if the logic is that: cramming more seats = $$$ then maybe JetBlue should start shrinking legroom in Mint too and cram another Mint row in there... :roll:


It's a balancing act. To date, JetBlue has found out the hard way that less seats does not necessarily = more $$$, so they have changed that slightly. By all public communications, Mint appears to be paying for the floor space it takes up. I wouldn't expect JetBlue to say otherwise, but until we have better data to go off, it appears to be doing fine.

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