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onwFan
Posts: 440
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 7:31 pm

LAXintl wrote:
usxguy wrote:
re: LAWA/LAX T5 and AA

I thought all of T5 was common use? Or do a few carriers have preferential use?

LAWA can, and will, allow other airlines to use preferential gates if the host airline has long enough gaps in turns. So after the airlines file their SCRs & SSIMs with the airports, if someone wants to come in later and put a flight in and use one of AA's gates, they can, if no other common use gates are available. *or use a remote pad


AA currently has preferential use of 4 gates in T-5 (5th one once terminal gate reconfiguration is finished) as part of proprietary investments in its master lease that runs till 2039.
AA may also access up to 5 other gates on common use basis, plus a common use bus gate in T-5. They have exclusive use of ~40,000sq/ft office/facility space in T5 aswell.

I was going through the lease agreement, and as you said, AA’s agreement was for a max of 10 gates in T5. So what was the plan for the remaining 5 gates? Were only the carriers without preferential gates planned to move to the MSC? It would appear that the gates in question here are those 5.
 
FSDan
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 7:36 pm

ryby92 wrote:
FSDan wrote:
ryby92 wrote:

You must assume that AA would sit idly and do absolutely nothing to defend a major hub such as PHL.


No, I'm assuming that some people might continue to choose B6 even with an AA competitive response due to the PTVs, Mint service (if it was deployed on the route), etc.


Nothing to stop AA from throwing in a 787 ( plenty will be available out of PHL) even if for repositioning purposes to compete or even 777 widebody to Hawaii to do the same for west coast. Remember they operated A332 LAX-PHL in like manner previously. Need to recognize times are changing and not to automatically assume that old playbook is still in use.


Oh, I'm well aware times are changing - this whole thread demonstrates that amply. And that's part of why I could see B6 jumping onto a route like LAX-PHL that conventional wisdom says "AA owns".

Regarding AA throwing a 787 on the route, sure, they could do that (it was actually already planned for this summer before COVID hit, replacing the 332). Do I think the 787 is some sort of magic B6 crusher? Not necessarily. Has AA stated that they plan to do less domestic widebody flying? Yes. Is there a need to rotate a 788 to LAX? Not through next summer based on schedules AA has announced so far. Maybe if CHC does end up starting in winter 2021 there will be a need for that, although it could just as easily be routed from DFW, ORD, or even MIA. Either way, the mere threat of an AA response is not reason enough for B6 to stay out of this market, in my opinion.
This is my signature until I think of a better one.
 
FSDan
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 7:47 pm

airportugal310 wrote:
FSDan wrote:
I don't know what HA will do now that they won't be getting any connections from B6 at LGB. If WN were to enter LGB-Hawai'i, that might push them out.


HA was not connecting anyone at LGB onward. The flight arrived usually as BOS and JFK were boarding, which were the only true connections that could have happened anyways...(I took it about 2-3x a month to/from HNL)

That flight was/is pure O&D, and B6 leaving the market only changes the fact that HA will likely need a new ground handler. Nothing more, nothing less


Fair enough. I forgot HA typically has their mainland flights timed for an RON rather than onward connections.
This is my signature until I think of a better one.
 
ScottB
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 7:48 pm

FSDan wrote:
I think PHL transcon service suffers due to a combination of its location between D.C. and NYC, and AA's dominance in PHL keeping other legacies small there.


Eh, I think PHL transcon service suffers mostly because Philadelphia is relatively poor for large metro areas and the finance/entertainment industries are not as important there (Scumcast being an obvious exception). Fare levels from L.A. to Philly are lower than to WAS, NYC, or MIA/FLL and broadly similar to BOS -- but BOS is a much more competitive market with five carriers operating non-stop to LAX. L.A.-Philly is a smaller market than all of those -- it even punches below L.A.-Atlanta and L.A.-Orlando though fares to MCO are about 15% lower than to PHL. Still, in a highly competitive market like LAX-MCO that's not a huge discount compared to the LAX-PHL near-monopoly. One can basically say the same about SFO-PHL except that SFO-BOS does quite a bit better than SFO-PHL and SFO-PHL is slightly larger than SFO-MCO.

FSDan wrote:
Regarding LGB, I think WN could reasonably run an operation of ~25x daily flights from there (SMF, OAK/SFO/SJC, LAS, PHX, DEN, maybe HNL or OGG).


They've already announced AUS -- I have to wonder if they had some info about B6 exiting LGB or were just exerting pressure. I think they go 4-5x in the short-haul markets -- OAK, SJC, SMF, LAX, PHX, DEN -- with maybe a handful of single dailies to places like MDW, DAL, HOU, and STL. BWI would be a real dark horse. Assuming the industry recovers to near pre-Covid levels I'd guess they get to around 30 daily departures.

tphuang wrote:
I don't think anyone expects them to be as important as big 4 in LA Area. But they do have an opportunity to be more relevant than they are now. I'm sure there are many network benefits to having greater presence in LAX. Maybe it will help them get more corporate contracts on these important mint transcon routes. And there is also the possibility of them of getting more of the old VX crowd.

But they have to put a real effort here. They need to have as many mint, newly configured A321Ns and A220 over here as possible. They need a product differentiator if they want to establish themselves. And they have to eventually at least service places like PHX and DEN a couple times a day.


I think that getting a minimum viable selection of destinations and schedules will be more important than product. Product is nice to have, but they're not going to get corporate contracts without a broader network from LAX. Presumably they get that, but they need to serve places like PHX, SMF, PDX, and DEN, rather than RNO and BZN.
 
Tack
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 9:19 pm

ScottB wrote:
FSDan wrote:
I think PHL transcon service suffers due to a combination of its location between D.C. and NYC, and AA's dominance in PHL keeping other legacies small there.


Eh, I think PHL transcon service suffers mostly because Philadelphia is relatively poor for large metro areas and the finance/entertainment industries are not as important there (Scumcast being an obvious exception). Fare levels from L.A. to Philly are lower than to WAS, NYC, or MIA/FLL and broadly similar to BOS -- but BOS is a much more competitive market with five carriers operating non-stop to LAX. L.A.-Philly is a smaller market than all of those -- it even punches below L.A.-Atlanta and L.A.-Orlando though fares to MCO are about 15% lower than to PHL. Still, in a highly competitive market like LAX-MCO that's not a huge discount compared to the LAX-PHL near-monopoly. One can basically say the same about SFO-PHL except that SFO-BOS does quite a bit better than SFO-PHL and SFO-PHL is slightly larger than SFO-MCO.

FSDan wrote:
Regarding LGB, I think WN could reasonably run an operation of ~25x daily flights from there (SMF, OAK/SFO/SJC, LAS, PHX, DEN, maybe HNL or OGG).


They've already announced AUS -- I have to wonder if they had some info about B6 exiting LGB or were just exerting pressure. I think they go 4-5x in the short-haul markets -- OAK, SJC, SMF, LAX, PHX, DEN -- with maybe a handful of single dailies to places like MDW, DAL, HOU, and STL. BWI would be a real dark horse. Assuming the industry recovers to near pre-Covid levels I'd guess they get to around 30 daily departures.

tphuang wrote:
I don't think anyone expects them to be as important as big 4 in LA Area. But they do have an opportunity to be more relevant than they are now. I'm sure there are many network benefits to having greater presence in LAX. Maybe it will help them get more corporate contracts on these important mint transcon routes. And there is also the possibility of them of getting more of the old VX crowd.

But they have to put a real effort here. They need to have as many mint, newly configured A321Ns and A220 over here as possible. They need a product differentiator if they want to establish themselves. And they have to eventually at least service places like PHX and DEN a couple times a day.


I think that getting a minimum viable selection of destinations and schedules will be more important than product. Product is nice to have, but they're not going to get corporate contracts without a broader network from LAX. Presumably they get that, but they need to serve places like PHX, SMF, PDX, and DEN, rather than RNO and BZN.


Corporate contracts are everything. I’m not disputing that B6 has a great product. But the fact that their network can’t get me to a boat load of destinations, both domestically and internationally? That’s what makes them a non starter for my travel. It’s all about the network. Something even AS has realized. Love em or hate em, AA and OW, for my company, has the best network of destinations and carriers. I’m hopeful B6 learns from AS, get your toehold at LAX but throw a ton into building partnerships and a network. Mint, on its own, isn’t competitive with any of the US3 networks or even AS now with the AA partnership.
 
MAH4546
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 9:52 pm

Planeboy17 wrote:
MAH4546 wrote:
tphuang wrote:
Seems reasonable to assume so. I'd guess 5 to 10 flights to central america. I think they will do well to GUA/SAL/SJO. Not sure about Mexican markets though. Those are notoriously tough given Mexican ULCC pressure.



All indications are that JetBlue is not moving out of T5 anytime soon. AA will shrink big time at LAX. We will see what happens to their prior T4/T5 plans. They don't exactly have $1.6 billion to throw around right now. And if they do, they'd rather spend it on DFW and CLT than LAX. Either JetBlue is overly optimistic here about getting additional gates at 5 or LAWA has given them indication that they will get necessary gates (around 8 or 9 at least) if they continue to grow.


Pretty simple. BUR always performed better to JFK. And even ONT performed better than LGB by last summer to JFK. They can keep the 2x all-core A321N to BUR and 2x A320 to ONT now and pile the rest of capacity to LAX.

Over the next couople of years, I think you will see something like 15 to 16 flights a day from JFK/EWR and LAX.


There you go again with baseless assumptions passing them off as fact. AA will shrink, it will remain LAX’s single largest carrier, but will absolutely adjust capacity. It will also work to consolidate all flying into T4 and T5 and close the Eagle’s Nest. And there has been zero indications so far regarding terminal renovation changes. If anything, it now becomes a better time than ever to renovate, especially with an emptier terminal meaning renovations can be done more cheaply and efficiently.

There is no indication that JetBlue is in T5 for the long-haul whatsoever. JetBlue will relocate to the Midfield Concourse in all likelihood.

I enjoy how you chide someone for making assumptions and respond to their assumptions with your own assumptions.
Classic.


No. I chide somebody when they pass off assumptions as being factual. You can make assumptions, just say they are assumptions.
a.
 
Dominion301
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 10:31 pm

Sorry if this was asked up thread, but does anyone here think that WN will go all-in at LGB?
 
wnflyguy
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 10:33 pm

Dominion301 wrote:
Sorry if this was asked up thread, but does anyone here think that WN will go all-in at LGB?

Yes
Flyguy
My Wings are clipped just another Retired Airline person. The Ultimate Armchair out of the loop airline industry geek. Aloha Mr Hand!
 
wedgetail737
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:00 pm

I would like to think AS would re-enter the SEA-LGB market, but I don't think it'll happen.
 
MDGLongBeach
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:09 pm

wedgetail737 wrote:
I would like to think AS would re-enter the SEA-LGB market, but I don't think it'll happen.


Well considering there's 0 competition on the route now, and that there's a possibility DAL (who was rumored to use the slots they got earlier this year for SEA and ATL), may drop their slots... it may be good for AS to re-enter for 1x or 2x a day freq, and maybe to PDX as well.
 
TYWoolman
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:14 pm

heretothere wrote:
Well, based on their moves the last few weeks, I think it’s safe to say B6 is not interested in any partnerships with AA, UA, or AS anytime soon...



Maybe...but going into EWR and now LAX seems to usurp growth and draw attention from United, which may be a means to not only provide short-term growth for JetBlue but also position it to be attractive as a merger candidate in the future: United may find it more worthwhile on the industry upside to buy JetBlue then compete arguing rationalization and synergies!
 
cynlb
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:27 pm

This just in- Long Beach to offer empty JetBlue slots to Southwest, Hawaiian and Delta airlines

https://lbpost.com/news/long-beach-to-o ... a-airlines
 
catiii
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:38 pm

TYWoolman wrote:
heretothere wrote:
Well, based on their moves the last few weeks, I think it’s safe to say B6 is not interested in any partnerships with AA, UA, or AS anytime soon...



Maybe...but going into EWR and now LAX seems to usurp growth and draw attention from United, which may be a means to not only provide short-term growth for JetBlue but also position it to be attractive as a merger candidate in the future: United may find it more worthwhile on the industry upside to buy JetBlue then compete arguing rationalization and synergies!


This theory popped up on the EWR announcement thread, and I can not understand why people think that B6 is entering the market to spur UA to engage in M&A. It is farcical and certainly not reflective of how the world works. If B6 wanted to engage in M&A with UA they'd just call them. They wouldn’t enter into a bunch of competitive markets to “get their attention.”

And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.
 
MIflyer12
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Re: JetBlue makes LAX West Coast focus city

Fri Jul 10, 2020 11:56 pm

catiii wrote:
And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.


That certainly is the point of view of the established - and published - DOJ criteria for airline anti-trust review that have been in place for two decades.
https://www.justice.gov/atr/department-justice-2
 
JoseSalazar
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:00 am

TYWoolman wrote:
heretothere wrote:
Well, based on their moves the last few weeks, I think it’s safe to say B6 is not interested in any partnerships with AA, UA, or AS anytime soon...



Maybe...but going into EWR and now LAX seems to usurp growth and draw attention from United, which may be a means to not only provide short-term growth for JetBlue but also position it to be attractive as a merger candidate in the future: United may find it more worthwhile on the industry upside to buy JetBlue then compete arguing rationalization and synergies!

Creating more overlap and more that would likely need to be divested doesn’t seem like the best merger prep strategy. I don’t think jetblue is really making business decisions based on making itself attractive for M&A. I think they are trying to play a little offense mixed in with their defense, and in the case of LGB, divorce itself from a long, bad relationship and take advantage of a new opportunity.
 
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:16 am

delete
Flu+Covid19 is bad. Consider a flu vaccine, if not for yourself, to protect someone you care about.
 
strfyr51
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:17 am

LAXintl wrote:
JetBlue today announced it will make LAX its primary base of operations in greater Los Angeles, advancing its focus city strategy and building relevance for the airline in one of the busiest markets in the world.
To enable the shift, the airline will move service currently operated at Long Beach Airport (LGB) to LAX, along with its Long Beach crew and maintenance bases, beginning in October.

Press release:
http://otp.investis.com/clients/us/jetb ... wsid=69600

Image

Effective October 7, 2020, JetBlue will operate nonstop service between LAX and seven new markets:
Austin-Bergstrom International Airport (AUS)
Bozeman Yellowstone International Airport (BZN) [seasonal]
Las Vegas McCarran International Airport (LAS)
Reno-Tahoe International Airport (RNO)
Salt Lake City International Airport (SLC)
San Francisco International Airport (SFO)
Seattle-Tacoma International Airport (SEA)

New markets will complement existing nonstop service between LAX and:
Boston Logan International Airport (BOS) *MINT*
Buffalo Niagara International Airport (BUF)
Fort Lauderdale-Hollywood International Airport (FLL) *MINT*
New York John F. Kennedy International Airport (JFK) *MINT*
Newark Liberty International Airport (EWR) *MINT* [Launching July 23]
Orlando International Airport (MCO)

JetBlue’s final day of operations in Long Beach will be October 6.


Good luck to them. LAX while large is certainly a very competitive market, and others wont just stand by and watch B6 as they did with them in LGB.

Now they're stepping up to the Majors!! Good for them! They should have stepped up a damn long time ago!
 
Tack
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:18 am

wedgetail737 wrote:
I would like to think AS would re-enter the SEA-LGB market, but I don't think it'll happen.


I’m retired AS. I started in 1982 when they first opened LGB. So I’m going to say no way. Their biggest bitch with LGB is that it’s a very low yield market. When I started, their marketing was to avoid LAX at all costs. The fact that most of the initial flights in 1982 were tag flights sharing an AC with ONT made it a market that did ok, but not great. After the Jet America merger they went all in on west coast flying to OAK/SFO and PACNORWEST but found that the yields out of LGB just didn’t compare to those out of LAX. Now that they have the 175s it might get a look- but I’m sticking with a solid Hell No. I just haven’t seen where the yields are worth the trouble. LGB isn’t that great of place to fly into or out of for many bis folks.
 
tphuang
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:27 am

catiii wrote:
I think you'll see more Mint expansion out of LAX to markets it does and does not already serve, including markets that JetBlue doesn't already serve. I think the 220s, when they get a critical mass, will allow them to launch TCON expansion into a host of markets that can't support Mint but could support TCON service to LAX. The will free up 320s to come back east and replace some of the 190 flying out of BOS. The fleet mix of low density and high density 321s, plus ETOPS coming on line, will open up options to Hawaii and north and south of the border.

The problem is that they are only taking 5 non-LR A321NEOs in 2021/2022. Mint is needed to expand their profile in EWR and LAX. All the A321NEOS they've taken so far this year looks to be 200 all-core config. I hope we will hear more from JetBlue management in Q2 on how they are going to proceed with mint.

Agreed that A220 would work well on stuff like HPN, RSW, PBI, JAX, BDL, PVD and maybe even RIC/CHS. All markets they have some brand recognition on east coast.

FSDan wrote:
Oh, I'm well aware times are changing - this whole thread demonstrates that amply. And that's part of why I could see B6 jumping onto a route like LAX-PHL that conventional wisdom says "AA owns".

Regarding AA throwing a 787 on the route, sure, they could do that (it was actually already planned for this summer before COVID hit, replacing the 332). Do I think the 787 is some sort of magic B6 crusher? Not necessarily. Has AA stated that they plan to do less domestic widebody flying? Yes. Is there a need to rotate a 788 to LAX? Not through next summer based on schedules AA has announced so far. Maybe if CHC does end up starting in winter 2021 there will be a need for that, although it could just as easily be routed from DFW, ORD, or even MIA. Either way, the mere threat of an AA response is not reason enough for B6 to stay out of this market, in my opinion.

The problem for AA is that they don't have a good option against mint. 787-8 has too many Y seats and not enough J cabin. A321T is too premium for something like PHL-LAX. 16 J + 143 Y/Y+ is pretty ideal for non NYC-LAX/SFO transcon markets with some premium demand. I agree with your earlier assertion that mint would do better out of PHL than Florida stuff. Too much ULCC competition on PHL to Florida at the moment.

I think they will add new mint markets out of LAX. The 2 most obvious options are IAD and PHL. The former is a more premium market but they left there already. The latter is gaining some traction now that they are making a play for NJ market.

But it will b a while before they do that. I think the next batch of mint aircraft will all be going to growing EWR-LAX/SFO.
 
strfyr51
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:28 am

janders wrote:
Funny take from Crankyflier

“This is stupid,” Snyder told TPG on Thursday. “It’s smart that they’re finally leaving Long Beach. However, instead they’ve decided to go into one of the most competitive airports in the world on routes where they’ll really add little value and I don’t see how this works.”

https://thepointsguy.com/news/jetblue-t ... alignment/

To put it in perspective, 5 airlines already call LAX a hub or focus city. Now add in JetBlue to the mix.

well? The question is? Then HOW do you measure yourself as a carrier if you're not going head up with the biggest and the best? JBLU can gain considerable traction being where some of the world's biggest and best carriers congregate. they could strike deals for interline services and connect to international carriers on Both coasts. Their only shortcoming?
they lack dispersion to the interior USA airports.
 
MrPeanut
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:32 am

Tack wrote:
Corporate contracts are everything.


The importance of corporate contracts is overstated. Valuable? Sure, but not end all be all. They can help support certain routes with certain spend commitments to maintain that specific route. However, corporate contracts are rarely exclusive and if they contain minimum spend requirements, they are usually very achievable for customers to achieve because customer need to give their own employees the ability to select their carrier of choice and hedge against risk. The only time corporate contracts add significant value for airlines is on long distance overseas flights with minimum spend commitments. Otherwise, they often have little teeth in the agreements to bind customers to one specific airline.

ScottB wrote:
AA is not in a position of strength at PHX. They're not the leading carrier for O&D traffic at PHX and they're basically relying on low-yielding connections over the airport.


And yet AA made money in PHX and lost money at LAX. Having the largest market share does not equate to profitability when a market is highly fragmented such as LAX, and compounding this issue is the extremely high cost of operating a hub at LAX.


LAXintl wrote:
One thing to consider playing with the big boys means paying bigger bills. Hopefully the revenue follows.

For example A321 landing fee at LGB vs LAX for FY2019.

LGB = $667

LAX = $1894

So everything from landing fees, to parking, to utility fees, rental, per passenger fees etc will be dearer at LAX - thousands per flight which will need to be earned somehow via ticket revenue.

Best of luck


B6's lower cost structure will help, especially as it relates to the legacy carriers. I am less concerned about B6 and more concerned about the added pressure this puts on the legacies.
 
evank516
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:42 am

I know jetBlue was having some issues before the pandemic hit so maybe this is the perfect time to take advantage and restructure themselves and come out stronger and stay independent. Would be nice to see them return to their former glory.
 
Tack
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:48 am

MrPeanut wrote:
Tack wrote:
Corporate contracts are everything.


The importance of corporate contracts is overstated. Valuable? Sure, but not end all be all. They can help support certain routes with certain spend commitments to maintain that specific route. However, corporate contracts are rarely exclusive and if they contain minimum spend requirements, they are usually very achievable for customers to achieve because customer need to give their own employees the ability to select their carrier of choice and hedge against risk. The only time corporate contracts add significant value for airlines is on long distance overseas flights with minimum spend commitments. Otherwise, they often have little teeth in the agreements to bind customers to one specific airline.

ScottB wrote:
AA is not in a position of strength at PHX. They're not the leading carrier for O&D traffic at PHX and they're basically relying on low-yielding connections over the airport.


And yet AA made money in PHX and lost money at LAX. Having the largest market share does not equate to profitability when a market is highly fragmented such as LAX, and compounding this issue is the extremely high cost of operating a hub at LAX.


LAXintl wrote:
One thing to consider playing with the big boys means paying bigger bills. Hopefully the revenue follows.

For example A321 landing fee at LGB vs LAX for FY2019.

LGB = $667

LAX = $1894

So everything from landing fees, to parking, to utility fees, rental, per passenger fees etc will be dearer at LAX - thousands per flight which will need to be earned somehow via ticket revenue.

Best of luck


B6's lower cost structure will help, especially as it relates to the legacy carriers. I am less concerned about B6 and more concerned about the added pressure this puts on the legacies.


Not entirely true. While at AS our Corp sales force fell over themselves to land any corporate account they could. The quest for those contracts drove our partner search both internationally and domestically. Further, that quest helped push new cities into the spotlight for AS service. Corporate contracts are more than just valuable, they bring big revenue, build brand loyalty, and not just from airfares. The domestic connectivity of the AS/AA WCIA and it’s full OW membership are being driven, due in no small part, by a need to offer global flights to help land those ‘overstated’ contracts. This will be an issue for B6.
Last edited by Tack on Sat Jul 11, 2020 12:59 am, edited 5 times in total.
 
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diverdave
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:49 am

MAH4546 wrote:
No. I chide somebody when they pass off assumptions as being factual. You can make assumptions, just say they are assumptions.


Not to mention the assumptions that COVID-19 will be in our rear view mirror by fall.

That would be great if it happens, but the trends are not running in that direction.
 
MrPeanut
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:50 am

tphuang wrote:
I don't see how AA will have the $1.6 billion for their project at this point. And I don't see AA operating more than 150 flights at LAX for the next couple of years.


I think 150 is on the high side. Probably looking at closer to 100. You might see something like JFK whereby the final product is a fraction of what was originally proposed. Construction is great in the sense that they can always slow roll the project until the environment becomes better, or in the case of AA, re-organize in bankruptcy. Also, they will probably reduce costs eliminating a lot of costly aesthetics which is very common when actual costs of construction bump up against budget.
 
MrPeanut
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:05 am

Tack wrote:
MrPeanut wrote:
Tack wrote:
Corporate contracts are everything.


The importance of corporate contracts is overstated. Valuable? Sure, but not end all be all. They can help support certain routes with certain spend commitments to maintain that specific route. However, corporate contracts are rarely exclusive and if they contain minimum spend requirements, they are usually very achievable for customers to achieve because customer need to give their own employees the ability to select their carrier of choice and hedge against risk. The only time corporate contracts add significant value for airlines is on long distance overseas flights with minimum spend commitments. Otherwise, they often have little teeth in the agreements to bind customers to one specific airline.

ScottB wrote:
AA is not in a position of strength at PHX. They're not the leading carrier for O&D traffic at PHX and they're basically relying on low-yielding connections over the airport.


And yet AA made money in PHX and lost money at LAX. Having the largest market share does not equate to profitability when a market is highly fragmented such as LAX, and compounding this issue is the extremely high cost of operating a hub at LAX.


LAXintl wrote:
One thing to consider playing with the big boys means paying bigger bills. Hopefully the revenue follows.

For example A321 landing fee at LGB vs LAX for FY2019.

LGB = $667

LAX = $1894

So everything from landing fees, to parking, to utility fees, rental, per passenger fees etc will be dearer at LAX - thousands per flight which will need to be earned somehow via ticket revenue.

Best of luck


B6's lower cost structure will help, especially as it relates to the legacy carriers. I am less concerned about B6 and more concerned about the added pressure this puts on the legacies.


Not entirely true. While at AS our Corp sales force fell over themselves to land any corporate account they could. The quest for those contracts drove our partner search both internationally and domestically. Further, that quest helped push new cities into the spotlight for AS service. Corporate contracts are more than overstated. The domestic connectivity of the AS/AA WCIA and it’s full OW membership are being driven, due in no small part, by a need to offer global flights to help land those ‘overstated’ contracts. This will be an issue for B6.


Well of course your sales people would fall over themselves. They are paid based on quota. So anytime they get a sale (in this case new corporate contract), it is a time for them to celebrate. I would fully expect that.

However, I am just telling you that these contracts have very little teeth to them. Therefore, signing a contract is one thing, actually getting the revenue out of those contracts is another. The non-exclusivity and/or very low spend commitments (unless on specific long distance flights), don't provide the value that is touted.

Like I said, they provide some value in terms of revenue commitment, but their low commitment levels and non-exclusivity rarely means significant incremental benefit to the airline. Another way to look at it is how many of those employees would have flown that specific airline regardless of contract? Most have already made their minds up on preferred carrier (or preferred carrier for a specific route), so the corporate contract does little to get the airline incremental revenue. The only possible exception is if a contract has a high spend commitment. However, most companies do not agree to high spend commitments due to risk and because they want to give their employees options.
 
Tack
Posts: 90
Joined: Thu Oct 04, 2018 11:13 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:19 am

MrPeanut wrote:
Tack wrote:
MrPeanut wrote:

The importance of corporate contracts is overstated. Valuable? Sure, but not end all be all. They can help support certain routes with certain spend commitments to maintain that specific route. However, corporate contracts are rarely exclusive and if they contain minimum spend requirements, they are usually very achievable for customers to achieve because customer need to give their own employees the ability to select their carrier of choice and hedge against risk. The only time corporate contracts add significant value for airlines is on long distance overseas flights with minimum spend commitments. Otherwise, they often have little teeth in the agreements to bind customers to one specific airline.



And yet AA made money in PHX and lost money at LAX. Having the largest market share does not equate to profitability when a market is highly fragmented such as LAX, and compounding this issue is the extremely high cost of operating a hub at LAX.




B6's lower cost structure will help, especially as it relates to the legacy carriers. I am less concerned about B6 and more concerned about the added pressure this puts on the legacies.


Not entirely true. While at AS our Corp sales force fell over themselves to land any corporate account they could. The quest for those contracts drove our partner search both internationally and domestically. Further, that quest helped push new cities into the spotlight for AS service. Corporate contracts are more than overstated. The domestic connectivity of the AS/AA WCIA and it’s full OW membership are being driven, due in no small part, by a need to offer global flights to help land those ‘overstated’ contracts. This will be an issue for B6.


Well of course your sales people would fall over themselves. They are paid based on quota. So anytime they get a sale (in this case new corporate contract), it is a time for them to celebrate. I would fully expect that.

However, I am just telling you that these contracts have very little teeth to them. Therefore, signing a contract is one thing, actually getting the revenue out of those contracts is another. The non-exclusivity and/or very low spend commitments (unless on specific long distance flights), don't provide the value that is touted.

Like I said, they provide some value in terms of revenue commitment, but their low commitment levels and non-exclusivity rarely means significant incremental benefit to the airline. Another way to look at it is how many of those employees would have flown that specific airline regardless of contract? Most have already made their minds up on preferred carrier (or preferred carrier for a specific route), so the corporate contract does little to get the airline incremental revenue. The only possible exception is if a contract has a high spend commitment. However, most companies do not agree to high spend commitments due to risk and because they want to give their employees options.


Not sure what your background is but what your saying isn’t the least bit inline with how AS and many airlines view these contracts. They absolutely push a big amount of money to the carrier and build loyalty. Through a myriad of revenue channels. I appreciate your take, but it’s just that, a take or view. Airlines want and need corporate revenue and build their networks to accommodate the higher value customer that they bring. I’ll admit my saying that they’re everything was indeed overstated. But you’re far too discounting of their value. I’ll go out on a limb and say that was a missing piece for B6 while hubbing in LGB.
Cheers!
 
arfbool
Posts: 98
Joined: Wed Sep 08, 2010 2:02 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:20 am

What corporate travel is happening these days? At my company, every meeting has been moved online indefinitely. Site travel is rare.
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:20 am

strfyr51 wrote:
LAXintl wrote:
JetBlue today announced it will make LAX its primary base of operations in greater Los Angeles, advancing its focus city strategy and building relevance for the airline in one of the busiest markets in the world.
To enable the shift, the airline will move service currently operated at Long Beach Airport (LGB) to LAX, along with its Long Beach crew and maintenance bases, beginning in October.

Press release:
http://otp.investis.com/clients/us/jetb ... wsid=69600

Image

Effective October 7, 2020, JetBlue will operate nonstop service between LAX and seven new markets:
Austin-Bergstrom International Airport (AUS)
Bozeman Yellowstone International Airport (BZN) [seasonal]
Las Vegas McCarran International Airport (LAS)
Reno-Tahoe International Airport (RNO)
Salt Lake City International Airport (SLC)
San Francisco International Airport (SFO)
Seattle-Tacoma International Airport (SEA)

New markets will complement existing nonstop service between LAX and:
Boston Logan International Airport (BOS) *MINT*
Buffalo Niagara International Airport (BUF)
Fort Lauderdale-Hollywood International Airport (FLL) *MINT*
New York John F. Kennedy International Airport (JFK) *MINT*
Newark Liberty International Airport (EWR) *MINT* [Launching July 23]
Orlando International Airport (MCO)

JetBlue’s final day of operations in Long Beach will be October 6.


Good luck to them. LAX while large is certainly a very competitive market, and others wont just stand by and watch B6 as they did with them in LGB.

Now they're stepping up to the Majors!! Good for them! They should have stepped up a damn long time ago!

They’ve been a major airline for some time. If LAX had made the access available they would have been in with this level of service 5 years ago.
 
tphuang
Posts: 5213
Joined: Tue Mar 14, 2017 2:04 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:20 am

Tack wrote:
Mint, on its own, isn’t competitive with any of the US3 networks or even AS now with the AA partnership.

Yet, Mint somehow generated higher yield on NYC-LAX than UA and the most profitable part of their network after NYC VFR flights.

ScottB wrote:
Eh, I think PHL transcon service suffers mostly because Philadelphia is relatively poor for large metro areas and the finance/entertainment industries are not as important there (Scumcast being an obvious exception). Fare levels from L.A. to Philly are lower than to WAS, NYC, or MIA/FLL and broadly similar to BOS -- but BOS is a much more competitive market with five carriers operating non-stop to LAX. L.A.-Philly is a smaller market than all of those -- it even punches below L.A.-Atlanta and L.A.-Orlando though fares to MCO are about 15% lower than to PHL. Still, in a highly competitive market like LAX-MCO that's not a huge discount compared to the LAX-PHL near-monopoly. One can basically say the same about SFO-PHL except that SFO-BOS does quite a bit better than SFO-PHL and SFO-PHL is slightly larger than SFO-MCO.

If we remove NK's fare data on PHL-LAX and put premium product on there, would that make it more competitive to BOS in fare/demand level? I do think IAD-LAX makes more sense than PHL

I think that getting a minimum viable selection of destinations and schedules will be more important than product. Product is nice to have, but they're not going to get corporate contracts without a broader network from LAX. Presumably they get that, but they need to serve places like PHX, SMF, PDX, and DEN, rather than RNO and BZN.

In the beginning, it will be more about capturing more of the corporate pie for NY/BOS firms with west coast offices. Looks like most of their expansion at LAX won't start until 2023. Maybe they won't have the necessary gate access until that time. Maybe by then, they can capture more corporate dollar that do a lot of transcon travel. I don't see them going more than 2x to places like PHX/SMF/PDX/DEN. That's just too bloody and they don't have the resources to compete for clients that do mostly west coast travel.
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:21 am

MIflyer12 wrote:
catiii wrote:
And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.


That certainly is the point of view of the established - and published - DOJ criteria for airline anti-trust review that have been in place for two decades.
https://www.justice.gov/atr/department-justice-2


Really? You sure about that? It wasn’t the indication US got from DOJ when they tried to take over DL and were touting competition elimination.

It’s not the indication multiple carriers have gotten from DOJ in how they’d view NYC (as a whole market instead of individual airports) when it comes to divestiture.

Your 20 year old House testimony notwithstanding.

And the main point stands: JetBlue isn’t entering EWR transcon markets to get UA’s attention so that UA will view them as a viable M&A target.
Last edited by catiii on Sat Jul 11, 2020 1:33 am, edited 1 time in total.
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:27 am

strfyr51 wrote:
Then HOW do you measure yourself as a carrier if you're not going head up with the biggest and the best? JBLU can gain considerable traction being where some of the world's biggest and best carriers congregate. they could strike deals for interline services


This is a historically uninformed post and antiquated post.

They have codeshares and interlines with almost 50 carriers. Their TCON product was the death of UA in JFK. They’re beating DL in BOS in margin. They’re winning FLL against WN and NK. They disrupted the TCON market such that every carrier had to go to lay flat seats to remain competitive (exactly why AS is going to have to exit).

At the end of the day the only thing that matters is shareholder value, not an anachronistic view of the world that says you have to compete at some airport otherwise you’re not a “major” airline.
Last edited by catiii on Sat Jul 11, 2020 1:42 am, edited 1 time in total.
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:31 am

Tack wrote:
MrPeanut wrote:
Tack wrote:

Not entirely true. While at AS our Corp sales force fell over themselves to land any corporate account they could. The quest for those contracts drove our partner search both internationally and domestically. Further, that quest helped push new cities into the spotlight for AS service. Corporate contracts are more than overstated. The domestic connectivity of the AS/AA WCIA and it’s full OW membership are being driven, due in no small part, by a need to offer global flights to help land those ‘overstated’ contracts. This will be an issue for B6.


Well of course your sales people would fall over themselves. They are paid based on quota. So anytime they get a sale (in this case new corporate contract), it is a time for them to celebrate. I would fully expect that.

However, I am just telling you that these contracts have very little teeth to them. Therefore, signing a contract is one thing, actually getting the revenue out of those contracts is another. The non-exclusivity and/or very low spend commitments (unless on specific long distance flights), don't provide the value that is touted.

Like I said, they provide some value in terms of revenue commitment, but their low commitment levels and non-exclusivity rarely means significant incremental benefit to the airline. Another way to look at it is how many of those employees would have flown that specific airline regardless of contract? Most have already made their minds up on preferred carrier (or preferred carrier for a specific route), so the corporate contract does little to get the airline incremental revenue. The only possible exception is if a contract has a high spend commitment. However, most companies do not agree to high spend commitments due to risk and because they want to give their employees options.


Not sure what your background is but what your saying isn’t the least bit inline with how AS and many airlines view these contracts. They absolutely push a big amount of money to the carrier and build loyalty. Through a myriad of revenue channels. I appreciate your take, but it’s just that, a take or view. Airlines want and need corporate revenue and build their networks to accommodate the higher value customer that they bring. I’ll admit my saying that they’re everything was indeed overstated. But you’re far too discounting of their value. I’ll go out on a limb and say that was a missing piece for B6 while hubbing in LGB.
Cheers!


Out of curiosity what’s YOUR background. You’re in corporate sales at Alaska?
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:39 am

tphuang wrote:
catiii wrote:
I think you'll see more Mint expansion out of LAX to markets it does and does not already serve, including markets that JetBlue doesn't already serve. I think the 220s, when they get a critical mass, will allow them to launch TCON expansion into a host of markets that can't support Mint but could support TCON service to LAX. The will free up 320s to come back east and replace some of the 190 flying out of BOS. The fleet mix of low density and high density 321s, plus ETOPS coming on line, will open up options to Hawaii and north and south of the border.

The problem is that they are only taking 5 non-LR A321NEOs in 2021/2022. Mint is needed to expand their profile in EWR and LAX. All the A321NEOS they've taken so far this year looks to be 200 all-core config. I hope we will hear more from JetBlue management in Q2 on how they are going to proceed with mint.

Agreed that A220 would work well on stuff like HPN, RSW, PBI, JAX, BDL, PVD and maybe even RIC/CHS. All markets they have some brand recognition on east coast.


Let’s see if the order book holds as is or if they swap in different models and defer others.
 
DTWLAX
Posts: 1107
Joined: Sun Aug 16, 2009 4:19 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:42 am

wedgetail737 wrote:
I would like to think AS would re-enter the SEA-LGB market, but I don't think it'll happen.

AS serves LAX and SNA well. With LGB being right in between LAX and SNA, I do not think AS feels the need to add flights to LGB, at least not in the near future with the low travel demand.
 
TYWoolman
Posts: 609
Joined: Sat Jun 24, 2017 8:24 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 1:46 am

catiii wrote:
TYWoolman wrote:
heretothere wrote:
Well, based on their moves the last few weeks, I think it’s safe to say B6 is not interested in any partnerships with AA, UA, or AS anytime soon...



Maybe...but going into EWR and now LAX seems to usurp growth and draw attention from United, which may be a means to not only provide short-term growth for JetBlue but also position it to be attractive as a merger candidate in the future: United may find it more worthwhile on the industry upside to buy JetBlue then compete arguing rationalization and synergies!


This theory popped up on the EWR announcement thread, and I can not understand why people think that B6 is entering the market to spur UA to engage in M&A. It is farcical and certainly not reflective of how the world works. If B6 wanted to engage in M&A with UA they'd just call them. They wouldn’t enter into a bunch of competitive markets to “get their attention.”

And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.


Maybe you're right. But there is such a thing as route and slot divestitures in order to get a deal done if on the perspective of United it considered JetBlue to be worth it (Boston, JFK, etc...)
 
catiii
Posts: 3587
Joined: Mon Mar 31, 2008 1:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 2:13 am

TYWoolman wrote:
catiii wrote:
TYWoolman wrote:


Maybe...but going into EWR and now LAX seems to usurp growth and draw attention from United, which may be a means to not only provide short-term growth for JetBlue but also position it to be attractive as a merger candidate in the future: United may find it more worthwhile on the industry upside to buy JetBlue then compete arguing rationalization and synergies!


This theory popped up on the EWR announcement thread, and I can not understand why people think that B6 is entering the market to spur UA to engage in M&A. It is farcical and certainly not reflective of how the world works. If B6 wanted to engage in M&A with UA they'd just call them. They wouldn’t enter into a bunch of competitive markets to “get their attention.”

And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.


Maybe you're right. But there is such a thing as route and slot divestitures in order to get a deal done if on the perspective of United it considered JetBlue to be worth it (Boston, JFK, etc...)


And given that DOJ has indicated that it would view market concentration by just that, market and not airport, the value of acquiring a carrier in New York like JetBlue when you’re a carrier like UA diminishes significantly given the divestiture you’d have to make.

It’s secondary to the main point: it’s farcical to think that JetBlue entered the Newark market to draw attention to itself so that United would acquire it.
 
Tack
Posts: 90
Joined: Thu Oct 04, 2018 11:13 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 2:13 am

catiii wrote:
Tack wrote:
MrPeanut wrote:

Well of course your sales people would fall over themselves. They are paid based on quota. So anytime they get a sale (in this case new corporate contract), it is a time for them to celebrate. I would fully expect that.

However, I am just telling you that these contracts have very little teeth to them. Therefore, signing a contract is one thing, actually getting the revenue out of those contracts is another. The non-exclusivity and/or very low spend commitments (unless on specific long distance flights), don't provide the value that is touted.

Like I said, they provide some value in terms of revenue commitment, but their low commitment levels and non-exclusivity rarely means significant incremental benefit to the airline. Another way to look at it is how many of those employees would have flown that specific airline regardless of contract? Most have already made their minds up on preferred carrier (or preferred carrier for a specific route), so the corporate contract does little to get the airline incremental revenue. The only possible exception is if a contract has a high spend commitment. However, most companies do not agree to high spend commitments due to risk and because they want to give their employees options.


Not sure what your background is but what your saying isn’t the least bit inline with how AS and many airlines view these contracts. They absolutely push a big amount of money to the carrier and build loyalty. Through a myriad of revenue channels. I appreciate your take, but it’s just that, a take or view. Airlines want and need corporate revenue and build their networks to accommodate the higher value customer that they bring. I’ll admit my saying that they’re everything was indeed overstated. But you’re far too discounting of their value. I’ll go out on a limb and say that was a missing piece for B6 while hubbing in LGB.
Cheers!


Out of curiosity what’s YOUR background. You’re in corporate sales at Alaska?


I’ll bite...I wore many hats while there for 36 years. I was one of a handful of folks that started the AS push into international markets. I was based at LAX at that time. I was operationally responsible for the LAX-SJD start up. Later on I wrote the Canadian operational plan and opened LAX-YYZ. That market was borne out of a desire to capture high value business flying. Both contractual and at will biz customers. Following that, I was involved with the expansion into the Russian Far East. Specifically Vladivostok and Yuzhno-Sakhalinsk. While we sold mostly tourist packages, we began that entry to those cities to capture oil and gas contracts. Finally I started the ONT-MEX route, which again, was a desire to get a toe hold in a huge business city and be able to bid for Corp flight contracts, with the ultimate goal to receive route authority from LAX. My interaction with planning and sales, which I felt was useless at the time due to my operational chops, taught me how much value AS placed on corporate contracts. Many of those I worked with on that side of the fence moved on to Corp sales positions with the US3 and shared some of the thought process that those airlines had in regard to capturing high value contracts. So while I’ll admit my knowledge isn’t as a negotiator for that business, I had a seat at the table during planning and can tell you, revenue/ loyalty from those contracts was openly discussed and sought after. I’ll stand by what I said earlier, that type of contracted flying isn’t available to B6 unless they’re at LAX. And while Mint is amazing, they’re operating with one arm tied behind their back until they broaden their network.
 
TYWoolman
Posts: 609
Joined: Sat Jun 24, 2017 8:24 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 3:14 am

catiii wrote:
TYWoolman wrote:
catiii wrote:

This theory popped up on the EWR announcement thread, and I can not understand why people think that B6 is entering the market to spur UA to engage in M&A. It is farcical and certainly not reflective of how the world works. If B6 wanted to engage in M&A with UA they'd just call them. They wouldn’t enter into a bunch of competitive markets to “get their attention.”

And anyway, most Antitrust reviews would look at the elimination of competition on overlapping routes as a bad thing, not a good thing.


Maybe you're right. But there is such a thing as route and slot divestitures in order to get a deal done if on the perspective of United it considered JetBlue to be worth it (Boston, JFK, etc...)


And given that DOJ has indicated that it would view market concentration by just that, market and not airport, the value of acquiring a carrier in New York like JetBlue when you’re a carrier like UA diminishes significantly given the divestiture you’d have to make.

It’s secondary to the main point: it’s farcical to think that JetBlue entered the Newark market to draw attention to itself so that United would acquire it.


Well, if the notion that JetBlue's recent developments shield it from possible merger scenarios, as the original post I replied to directly theorized, then it can hold true that it precisely facilitates it, as having operations in major cities make it more of an alluring fit during the next shopping spree (including JetBlue making a case to be the acquirer). Likelyhood of DOT approval is irrelevant to my opinion and, yes, is secondary. To your main point, I wouldn't 100% rule my opinion out.
 
klkla
Posts: 847
Joined: Fri Jul 16, 2004 8:51 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 3:42 am

nine4nine wrote:
airportugal310 wrote:
From the LGB Airport Instagram page (and maybe its on Facebook too...)

Statement from Long Beach Airport Director Cynthia Guidry on today's @jetblue announcement:

“We will always be grateful for the investment JetBlue made in our community and the tremendous service they offered our passengers. We understand that the aviation industry – now more than ever – is constantly changing and airlines nationwide are making difficult business decisions to stay competitive in light of the pandemic. We expect strong interest in the slots as they become available.”



Lol. Deflect...!..Deflect....!!!! What they meant to say was.... “In light of our unfriendly community and non-business friendly policies adapted by the inept mongoloids on our City Council and the Knuckleheads at the Airport Authority, we’ve made an environment that is unsustainable for any airline to make money much less a fortress operation. With the loss of JetBlue, we look forward to eventually returning to the Long Beach Airport of the past catering to short lived public charter carriers.”


LOL... In a couple years SWA will have a larger successful operation at LGB thanks to JetBlue leaving the airport. I'm not saying it was a bad move on their part to leave, but to assume that Long Beach won't be able to replace them is not realistic.

What they meant to say was, "Don't let the door hit you on the way out."
 
JoseSalazar
Posts: 230
Joined: Mon Oct 14, 2019 3:18 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 3:49 am

klkla wrote:
nine4nine wrote:
airportugal310 wrote:
From the LGB Airport Instagram page (and maybe its on Facebook too...)

Statement from Long Beach Airport Director Cynthia Guidry on today's @jetblue announcement:

“We will always be grateful for the investment JetBlue made in our community and the tremendous service they offered our passengers. We understand that the aviation industry – now more than ever – is constantly changing and airlines nationwide are making difficult business decisions to stay competitive in light of the pandemic. We expect strong interest in the slots as they become available.”



Lol. Deflect...!..Deflect....!!!! What they meant to say was.... “In light of our unfriendly community and non-business friendly policies adapted by the inept mongoloids on our City Council and the Knuckleheads at the Airport Authority, we’ve made an environment that is unsustainable for any airline to make money much less a fortress operation. With the loss of JetBlue, we look forward to eventually returning to the Long Beach Airport of the past catering to short lived public charter carriers.”


LOL... In a couple years SWA will have a larger successful operation at LGB thanks to JetBlue leaving the airport. I'm not saying it was a bad move on their part to leave, but to assume that Long Beach won't be able to replace them is not realistic.

What they meant to say was, "Don't let the door hit you on the way out."

How many years do you think it will take until WN is profitable at LGB?
 
ScottB
Posts: 6993
Joined: Fri Jul 28, 2000 1:25 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 4:41 am

tphuang wrote:
If we remove NK's fare data on PHL-LAX and put premium product on there, would that make it more competitive to BOS in fare/demand level? I do think IAD-LAX makes more sense than PHL


It certainly doesn't make PHL more competitive on a demand level. Comparing airport pairs in 2019Q2, excluding NK, LAX-PHL is at about 1100 PDEW; LAX-BOS is a bit under 1900. If you just remove NK's fare data the average LAX-PHL fare moves above LAX-BOS by about 3% -- but we'd expect LAX-BOS fares to be pretty competitive with five carriers operating non-stop. Yields for LAX-PHL are worse than LAX-TPA, even. The only worse transcon markets from LAX I see are to BWI and MCO.

tphuang wrote:
In the beginning, it will be more about capturing more of the corporate pie for NY/BOS firms with west coast offices. Looks like most of their expansion at LAX won't start until 2023. Maybe they won't have the necessary gate access until that time. Maybe by then, they can capture more corporate dollar that do a lot of transcon travel. I don't see them going more than 2x to places like PHX/SMF/PDX/DEN. That's just too bloody and they don't have the resources to compete for clients that do mostly west coast travel.


Without a hub west of MCO or FLL, they're going to be hard-pressed to capture much loyalty from passengers in the L.A. Basin who need more than transcons with lie-flat seats, especially if they have a limited network from LAX. Trying to compete in LAX-SFO with two daily flights would be like trying to compete in BOS-LGA with two daily flights. LAX is the place they need to be if they want to be relevant in L.A., but they're going to have to eat losses for years just as VX did.
 
usflyer msp
Posts: 3796
Joined: Tue May 23, 2000 11:50 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 5:18 am

ScottB wrote:
tphuang wrote:
In the beginning, it will be more about capturing more of the corporate pie for NY/BOS firms with west coast offices. Looks like most of their expansion at LAX won't start until 2023. Maybe they won't have the necessary gate access until that time. Maybe by then, they can capture more corporate dollar that do a lot of transcon travel. I don't see them going more than 2x to places like PHX/SMF/PDX/DEN. That's just too bloody and they don't have the resources to compete for clients that do mostly west coast travel.


Without a hub west of MCO or FLL, they're going to be hard-pressed to capture much loyalty from passengers in the L.A. Basin who need more than transcons with lie-flat seats, especially if they have a limited network from LAX. Trying to compete in LAX-SFO with two daily flights would be like trying to compete in BOS-LGA with two daily flights. LAX is the place they need to be if they want to be relevant in L.A., but they're going to have to eat losses for years just as VX did.


I concur with this. I think some people are way too optimistic about B6's chances of success at LAX. It is way more competitive than NYC or BOS and jetBlue's non-existent network west of New Jersey and Florida makes them a non-starter for most West Coast residents. Some people flew them because they preferred LGB but if they have to schlep to LAX they will probably chose one of the many carriers with a more comprehensive LAX network.
 
wv399
Posts: 88
Joined: Tue Apr 24, 2007 12:32 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 6:35 am

MDGLongBeach wrote:
JetBlue established itself at Long Beach in the SoCal market, and a lot of it's customers used the airline because of the LGB convenience. B6, being a new player in the LAX world, is going to have a very hard time competing with long time and well established airlines like ASA, US3 etc considering B6 no longer has the upper edge on convenience, as is now mixing itself into a pool with lots of other airlines providing (arguably) a little bit better of a service. All I've seen on LGB's socials, private groups, and some public domains, is people complaining they'll never fly B6 again now that they don't fly out of LGB. I'm not necessarily saying that it was a bad business decision in a way, but now B6 has a hole to dig themselves out of, and quite honestly I don't see them lasting at LAX very long unless they can manage a merge with AS.

I agree that B6, as many people here would agree, would've been in a better spot having merged with VX. Now they've been more or less forced to throw themselves into a difficult market with no real local support or dedicated customer base. AS could use this opportunity to merge with B6 and expand their east coast network to compliment their strong west coast network .


JetBlue is not new to LAX, and it competes quite successfully on product, service, and best of all profit; with the US3, AS, and WN. Actually, serving LGB for as long as it did WAS the hole it had dug itself into. The only reason they served LGB is because there was no space at LAX. No matter how many, or how few flights, the low-yielding LGB operation was plagued by losses. So finally leaving was a great business decision. It has left behind its worst performer, to strengthen one of its most profitable, and it doesn’t need a merger to do that. Virgin America is a $2.5 billion bullet that was dodged.
 
wv399
Posts: 88
Joined: Tue Apr 24, 2007 12:32 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 6:47 am

klkla wrote:
nine4nine wrote:
airportugal310 wrote:
From the LGB Airport Instagram page (and maybe its on Facebook too...)

Statement from Long Beach Airport Director Cynthia Guidry on today's @jetblue announcement:

“We will always be grateful for the investment JetBlue made in our community and the tremendous service they offered our passengers. We understand that the aviation industry – now more than ever – is constantly changing and airlines nationwide are making difficult business decisions to stay competitive in light of the pandemic. We expect strong interest in the slots as they become available.”



Lol. Deflect...!..Deflect....!!!! What they meant to say was.... “In light of our unfriendly community and non-business friendly policies adapted by the inept mongoloids on our City Council and the Knuckleheads at the Airport Authority, we’ve made an environment that is unsustainable for any airline to make money much less a fortress operation. With the loss of JetBlue, we look forward to eventually returning to the Long Beach Airport of the past catering to short lived public charter carriers.”


LOL... In a couple years SWA will have a larger successful operation at LGB thanks to JetBlue leaving the airport. I'm not saying it was a bad move on their part to leave, but to assume that Long Beach won't be able to replace them is not realistic.

What they meant to say was, "Don't let the door hit you on the way out."


LGB was a money loser for them, so they really had to jump at the opportunity to leave. Who knows when they’ll ever have a chance like this to grow at LAX?
 
usflyer msp
Posts: 3796
Joined: Tue May 23, 2000 11:50 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 6:49 am

wv399 wrote:
MDGLongBeach wrote:
JetBlue established itself at Long Beach in the SoCal market, and a lot of it's customers used the airline because of the LGB convenience. B6, being a new player in the LAX world, is going to have a very hard time competing with long time and well established airlines like ASA, US3 etc considering B6 no longer has the upper edge on convenience, as is now mixing itself into a pool with lots of other airlines providing (arguably) a little bit better of a service. All I've seen on LGB's socials, private groups, and some public domains, is people complaining they'll never fly B6 again now that they don't fly out of LGB. I'm not necessarily saying that it was a bad business decision in a way, but now B6 has a hole to dig themselves out of, and quite honestly I don't see them lasting at LAX very long unless they can manage a merge with AS.

I agree that B6, as many people here would agree, would've been in a better spot having merged with VX. Now they've been more or less forced to throw themselves into a difficult market with no real local support or dedicated customer base. AS could use this opportunity to merge with B6 and expand their east coast network to compliment their strong west coast network .


JetBlue is not new to LAX, and it competes quite successfully on product, service, and best of all profit; with the US3, AS, and WN. Actually, serving LGB for as long as it did WAS the hole it had dug itself into. The only reason they served LGB is because there was no space at LAX. No matter how many, or how few flights, the low-yielding LGB operation was plagued by losses. So finally leaving was a great business decision. It has left behind its worst performer, to strengthen one of its most profitable, and it doesn’t need a merger to do that. Virgin America is a $2.5 billion bullet that was dodged.


Operating a niche premium Transcon operation is a whole different story than having a base at a LAX. B6 will find a very different competitive environment and reaction to their product differetiation on short haul and midcons from LAX.
 
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LAX772LR
Posts: 13278
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Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 7:40 am

DoctorVenkman wrote:
LAX772LR wrote:
BUR serves as the Valley's primary gateway, and areas as far north as Santa Clarita. Also domestic pax coming from the likes of Camarillo, Calabasas, Woodland Hills, Tarzana, Encino, etc can shave a good 30min+ off their already traffic-laden drive by going to BUR, rather than continuing down the 405 to LAX.

Don't forget there are a ton of areas in LA proper where BUR is significantly more convenient - Hollywood, Los Feliz, Downtown LA, Silverlake, etc... not to mention big areas of wealth like Pasadena and La Canada are right nearby too. I live on the east side and basically everyone I know looks for flights out of BUR before LAX.

Agree for the most part, though I certainly would not call BUR "significantly more convenient" to DTLA.

Much easier to get to LAX: straight shot down 110+105 or 10+405.
I myself, suspect a more prosaic motive... ~Thranduil
 
tphuang
Posts: 5213
Joined: Tue Mar 14, 2017 2:04 pm

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 10:32 am

usflyer msp wrote:
ScottB wrote:
tphuang wrote:
In the beginning, it will be more about capturing more of the corporate pie for NY/BOS firms with west coast offices. Looks like most of their expansion at LAX won't start until 2023. Maybe they won't have the necessary gate access until that time. Maybe by then, they can capture more corporate dollar that do a lot of transcon travel. I don't see them going more than 2x to places like PHX/SMF/PDX/DEN. That's just too bloody and they don't have the resources to compete for clients that do mostly west coast travel.


Without a hub west of MCO or FLL, they're going to be hard-pressed to capture much loyalty from passengers in the L.A. Basin who need more than transcons with lie-flat seats, especially if they have a limited network from LAX. Trying to compete in LAX-SFO with two daily flights would be like trying to compete in BOS-LGA with two daily flights. LAX is the place they need to be if they want to be relevant in L.A., but they're going to have to eat losses for years just as VX did.


I concur with this. I think some people are way too optimistic about B6's chances of success at LAX. It is way more competitive than NYC or BOS and jetBlue's non-existent network west of New Jersey and Florida makes them a non-starter for most West Coast residents. Some people flew them because they preferred LGB but if they have to schlep to LAX they will probably chose one of the many carriers with a more comprehensive LAX network.


A 40 flight operation like they will have for the next couple of years (before this expansion in 2023) is likely to be 2/3 mint transcon (my guess is around 26 to 27 flights) in terms number of flight and even higher in terms of transcon. Given the margin they get on LAX mint, it will remain the most profitable focus city in the system. Even a 70 flight schedule is likely to have almost half of the flights on mint to transcon and HI and about 1/3 in west coast stuff. They are just going to have to eat the losses on the west coast stuff for network reasons.

I think they will have to go for at least 6 to 8 flights a day to SFO and 4 to 6 to LAS. Other west coast stuff will probably just get couple of flights a day. They don't have the number of gates to offer a full network out of LAX. So they will have to continue to appeal to those that fly a lot of transcon and serve all the leisure destinations out of LA like LAS, HI, bay area, PHX, Mexican resorts.

Also, LAX will be their major west coast hub. So it will capture some of the east coast connection traffic, which it was never able to do before. Something like JAX-LAX-LAS/SFO/SEA/SJD/HNL may not be high yielding or efficient connection, but it will help fill up the planes.
usflyer msp wrote:

Operating a niche premium Transcon operation is a whole different story than having a base at a LAX. B6 will find a very different competitive environment and reaction to their product differetiation on short haul and midcons from LAX.


They have had LGB operation and dealing with LA market for a long time now. They are not exactly an unknown in the area. I do think they will try to got after the old-VX crowd through product differentiation. And have a split operation at LA was always a bad thing for an airline the size of B6.
 
majano
Posts: 272
Joined: Sun Oct 14, 2018 10:45 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:25 pm

ShinyAndChrome wrote:
TWA772LR wrote:
Varsity1 wrote:
I wonder how Jetblue will fair there. LAX is highly competitive.

IMO they should've just sucked it up and outbid AS for VX. SFO is a better fit for them.


To be fair, AS had the deeper pockets and the better credit. If there was at least a shred of truth in what AS management said about the value of the VX acquisition and how important is was for their future, I don't think B6 outbidding them was a possibility.

And I'd argue the opposite point re: LAX vs SFO for B6. In SFO, UA's existing brand awareness and network strength create hefty economies of scale in terms of retaining passengers. LAX's fragmentation arguably works to the benefit of upstarts, who will have a larger pool of more brand-agnostic customers to tap into.

Very apt analysis!
 
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Midwestindy
Posts: 5280
Joined: Sun Mar 12, 2017 3:56 am

Re: JetBlue makes LAX West Coast focus city

Sat Jul 11, 2020 12:57 pm

klkla wrote:
nine4nine wrote:
airportugal310 wrote:
From the LGB Airport Instagram page (and maybe its on Facebook too...)

Statement from Long Beach Airport Director Cynthia Guidry on today's @jetblue announcement:

“We will always be grateful for the investment JetBlue made in our community and the tremendous service they offered our passengers. We understand that the aviation industry – now more than ever – is constantly changing and airlines nationwide are making difficult business decisions to stay competitive in light of the pandemic. We expect strong interest in the slots as they become available.”



Lol. Deflect...!..Deflect....!!!! What they meant to say was.... “In light of our unfriendly community and non-business friendly policies adapted by the inept mongoloids on our City Council and the Knuckleheads at the Airport Authority, we’ve made an environment that is unsustainable for any airline to make money much less a fortress operation. With the loss of JetBlue, we look forward to eventually returning to the Long Beach Airport of the past catering to short lived public charter carriers.”


LOL... In a couple years SWA will have a larger successful operation at LGB thanks to JetBlue leaving the airport. I'm not saying it was a bad move on their part to leave, but to assume that Long Beach won't be able to replace them is not realistic.

What they meant to say was, "Don't let the door hit you on the way out."


How much does WN actually care about LGB? It's a tiny airport for them, probably the 5th largest airport for them in the LA area alone...
Tack wrote:
MrPeanut wrote:
Tack wrote:

Not entirely true. While at AS our Corp sales force fell over themselves to land any corporate account they could. The quest for those contracts drove our partner search both internationally and domestically. Further, that quest helped push new cities into the spotlight for AS service. Corporate contracts are more than overstated. The domestic connectivity of the AS/AA WCIA and it’s full OW membership are being driven, due in no small part, by a need to offer global flights to help land those ‘overstated’ contracts. This will be an issue for B6.


Well of course your sales people would fall over themselves. They are paid based on quota. So anytime they get a sale (in this case new corporate contract), it is a time for them to celebrate. I would fully expect that.

However, I am just telling you that these contracts have very little teeth to them. Therefore, signing a contract is one thing, actually getting the revenue out of those contracts is another. The non-exclusivity and/or very low spend commitments (unless on specific long distance flights), don't provide the value that is touted.

Like I said, they provide some value in terms of revenue commitment, but their low commitment levels and non-exclusivity rarely means significant incremental benefit to the airline. Another way to look at it is how many of those employees would have flown that specific airline regardless of contract? Most have already made their minds up on preferred carrier (or preferred carrier for a specific route), so the corporate contract does little to get the airline incremental revenue. The only possible exception is if a contract has a high spend commitment. However, most companies do not agree to high spend commitments due to risk and because they want to give their employees options.


Not sure what your background is but what your saying isn’t the least bit inline with how AS and many airlines view these contracts. They absolutely push a big amount of money to the carrier and build loyalty. Through a myriad of revenue channels. I appreciate your take, but it’s just that, a take or view. Airlines want and need corporate revenue and build their networks to accommodate the higher value customer that they bring. I’ll admit my saying that they’re everything was indeed overstated. But you’re far too discounting of their value. I’ll go out on a limb and say that was a missing piece for B6 while hubbing in LGB.
Cheers!


I can vouch for this, I work/worked for a couple of the major corporate travel spenders & have done internal projects related to corporate travel, and airlines put in a lot of work to win our $150M+ in airline spending a year (large majority in Business/First class). Examples: Complimentary Platinum status for a year, 25% off airline vacation packages, deep discounts for First class, e.t.c

Exclusivity is largely enforced on specifically negotiated routes, but even though we are Northeast based, B6 can't really compete for our business since they really only offer First/Business on TCONs & have abysmal network coverage outside of the northeast

There is a long list of cities/routes added by airlines that were specifically added for specific corporate contracts, so they are important to airlines bottom line in normal times.
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