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Kris
January 21st, 2004, 11:54 PM
January 22, 2004

JetBlue Airways Wants to Serve La Guardia

By MICHELINE MAYNARD

JetBlue Airways, the low-fare carrier that has become the largest airline serving Kennedy International Airport, asked the federal government yesterday for permission to begin flying from La Guardia Airport as well.

The move is the latest step in an aggressive expansion drive by the four-year-old airline, which is based in Queens. Earlier this month, it began service from Boston, and it has ordered dozens of new aircraft that it will begin putting into service this year.

If the Transportation Department approves its request, JetBlue plans to begin flights from La Guardia this spring, said a spokesman, Gareth Edmondson-Jones. A spokeswoman for the department said it had not yet reviewed the application.

JetBlue asked the government for 10 takeoff and landing slots at La Guardia, which would allow it to schedule five flights a day. It plans to operate from two gates, Mr. Edmondson-Jones said.

JetBlue has 83 flights a day from J.F.K., flying to 19 cities, out of its 222 daily flights to 22 destinations in the United States and Puerto Rico.

Last month, JetBlue passed American Airlines to become the leading airline at J.F.K. in terms of passengers carried. Mr. Edmondson-Jones declined to say which cities JetBlue would serve from La Guardia.

In a statement, the airline's chief executive, David Neeleman, said that JetBlue did not plan to cut back on service to J.F.K., where the airline is constructing a new terminal and a new hangar. However, Mr. Neeleman said that some passengers prefer to fly into and out of La Guardia, which is closer to Manhattan and easier to reach from many areas than J.F.K. is.

"It does give our passengers another option when they choose to fly JetBlue," Mr. Neeleman said in the statement.

La Guardia gained a reputation during the late 1990's as a crowded airport beset by delays. But passenger levels have fallen since the economic downturn and the Sept. 11 attacks, leaving room to expand service.

In the 12 months ended in November, La Guardia handled 22.4 million passengers, according to the Port Authority of New York and New Jersey. That is down more than 11 percent from the 25.3 million people La Guardia handled in 2000.

The move by JetBlue comes as US Airways is seeking to sell several of its assets to raise cash. Those assets include its East Coast shuttle; gates at La Guardia and in Boston; and one of its hubs, in Pittsburgh, Philadelphia or Charlotte.

JetBlue is thought to be among the airlines that have requested information from US Airways, according to people briefed on the discussions. Mr. Edmondson-Jones would not comment. But he said there was no need to buy US Airways' gates at La Guardia to begin service because takeoff and landing slots are available.

"Obviously, we need confirmation back" from the government before putting the plan into action, Mr. Edmondson-Jones said. He added that the airline would be able to start service in two to three months once it decided to add an airport to its roster.

Despite its dominance at J.F.K., JetBlue lags behind another low-fare carrier, Delta Air Lines' Song, which offers service from all three New York-area airports. But JetBlue is quickly expanding, with plans to add both cities and aircraft. On March 3, it plans to begin service from New York to Sacramento.

Copyright 2004 The New York Times Company

krulltime
July 7th, 2004, 03:56 PM
Timing's right as JetBlue revs up in NY
Expands service as majors flounder


By Tommy Fernandez
July 6, 2004

http://www.crainsny.com/images/articles/21285.jpg

IN THE BLACK: David Neeleman's JetBlue is adding services and staying profitable as its rivals lose billions.

As the major airlines falter, JetBlue Airways Corp. is stepping up its invasion of New York airspace.

The Queens-based low-fare carrier will increase its daily flights out of the city by at least a third in coming months, adding service to the Dominican Republic and debuting flights out of La Guardia Airport. During the winter, the airline plans to offer 71 daily departures from New York to Florida alone.

To facilitate its growth, the airline has ordered 223 aircraft to supplement its 60-plane fleet. It's even holding options to buy another 150, in case consumer demand is greater than expected.

"You know, this is just the beginning," says founder and Chief Executive David Neeleman, under whose leadership the 4-year-old company has become the top carrier operating out of John F. Kennedy International Airport.

Its timing couldn't be better. The profitable discounter is expanding while its competitors are at their weakest. The six major carriers combined lost more than $1 billion in the first quarter of this year, and they're expected to lose a total of $3 billion in 2004. United Airlines is struggling through its reorganization process after the federal government refused to provide it with $1.1 billion in loan guarantees.

"JetBlue has the opportunity to strike now when it is at its strongest, before the other guys have recovered," says airline analyst Robert Mann of R.W. Mann & Co., who owns stock in JetBlue. "From a battle-planning perspective, this is the best time to attack."

Even the majors' discount offspring are on the defensive. Delta Air Lines' 14-month-old low-fare unit, Song, has announced that it will reduce its flights nationwide by a quarter during the month of September.

Experts warn that JetBlue's aggressive strategy and rapid expansion will come at a price. As JetBlue grows, it will have a tougher time sticking with the lean, low-cost model that helped it undercut the major carriers. Its staff size will swell, its planes will get older and its ancillary expenses, such as pension contributions, will increase.


Bureaucratic shift

"As any company gets bigger, it inevitably becomes much less of an entrepreneurial operation and more like another bureaucracy," says Mr. Mann. "The same thing, more or less, will happen to JetBlue."

Yet the potential rewards in the New York market far outweigh any negatives--at least for now.

When JetBlue debuts service at La Guardia this fall, it will have access to a new base of consumers in Manhattan and the northern suburbs for whom JFK is too far away. The airline will operate seven daily flights to Fort Lauderdale.

The La Guardia service is just one element of JetBlue's Florida expansion. The airline plans to operate 17 Fort Lauderdale flights and 15 to Orlando from its home base at JFK. In addition, it will run 14 flights to West Palm Beach, 10 to Fort Myers and eight to Tampa. These schedules represent increases of at least 10% for each city.

Loading up on Florida flights has the potential to be quite lucrative. According to the Florida Commission on Tourism, more than 6.8 million people flew from New York state to Florida in 2002, the most recent year for which statistics are available.

JetBlue is also set to reap big gains by creating low-fare options for travel to the Dominican Republic. Last month, it launched one daily flight to Santo Domingo and two to Santiago out of JFK.

New York's Dominican community, pegged at more than 500,000 people, is among the city's fastest-growing populations. With major carriers' fares averaging $600, many Dominican immigrants haven't been able to fly home frequently. JetBlue's fares, averaging $300, could spur thousands to consider regular air travel to the Caribbean.

"There is no question that discount fares will help many Dominicans go home at least once, or maybe twice, a year," says Ramona Hernández, director of the Dominican Studies Institute at the City University of New York.

JetBlue can afford to expand to additional markets because it retains big cost advantages over the major carriers--especially when it comes to salaries. JetBlue spends only a quarter of its revenues on wages, while Delta's salary expenses account for more than 40%, according to Plunkett Research. JetBlue, which has no unionized workers, pays lower salaries but offers greater job security, better overtime pay and quicker paths to promotion. Meanwhile, the majors continue to battle their unions over wages.

On average, it costs JetBlue roughly 7 cents to transport one passenger one mile, compared to 11.5 cents for the major carriers. Consequently, the airline can undercut the giants' prices for many routes and remain in the black.

Analysts project that JetBlue will post revenues of $1.3 billion in 2004, a 30% increase over last year's performance. Because of competition and higher fuel prices, earnings per share will fall slightly, to 83 cents per share from 85 cents. That's far better than the results for the carrier's money-losing rivals.


Cash to spare

"JetBlue can still generate a good profit with these low fares," says Peter Belobaba, head of the global airline industry program at the Massachusetts Institute of Technology. "The problem for the major carriers is that the low fares don't cover their high costs."

With positive cash flow, JetBlue can build up capital to help pay for its new planes or hedge against fuel cost spikes. The recent escalation of jet fuel prices to nearly $40 per barrel didn't hurt JetBlue as much as it did other carriers, because the airline has locked in 45% of its fuel supply for the year at $24 per barrel. None of the majors had the cash to hedge.

"A lot of the other companies don't have the money to see themselves through this," says JetBlue's Mr. Neeleman.


Copyright 2004, Crain Communications, Inc

Bob
November 11th, 2004, 06:56 PM
I have heard nothing but good about Jet Blue; however, to my knowledge the airline runs nothing but Airbus.

I never had a problem with Airbus, until that 2001 AAL587 accident Airbus claims was the pilot's fault the tail snapped off.

Bottom line: if it isn't Boeing, I'm not going!

Gulcrapek
November 11th, 2004, 10:09 PM
^It's probably not just me thinking that's more than a little paranoid.

TWA800 was a Boeing. That didn't fare too well. Maybe you should just fly MDs. Oh wait, SwissAir a few years ago. Not to offend you in any way, but if you were serious about what you just posted, it's really kinda illogical.

Hof
December 16th, 2004, 10:41 AM
I like JetBlue.I have flown with them several times and the experience has always been pleasant.
When you fly JetBlue,you're in a new plane and you sit on leather.The plane's interior smells like a Jaguar.
They are the first airline,I believe,to have TV monitors(located in the seatbacks,just like an Escalade) for all passengers,so if you can't look out the window at the landscape below or if you don't want to endlessly reread the safety and evacuation cartoons,you can always watch Oprah or surf the cable channels.You are even supplied with gratis headsets as you board.
Or you can just turn it off and not be bothered,unlike most planes where a movie you probably didn't want to watch is presented on a bigscreen and the headsets cost you.
They have a channel with a little plane superimposed over a route map,so you can figure out where you're flying over with ease.It also indicates the plane's speed,direction,Mach Numbers,etc.If you ever wondered about stuff like that while flying,well,JetBlue's little telescreens will scratch that particular itch.
You can't beat their fares,either.As I am a repeat customer,I'm regularly sent emails with special offers,like $49 each way,Florida to NYC.In June,I flew to NYC on a regular,everyday $69 fare.I was given a coupon for discounted ground transportation--$5 off the $13 shuttle bus to Manhattan from JFK--when I purchased my ticket.
During the flight,attendants pass out little bags of BLUE potato chips,a charming marketing effort,and after flying,I'm sent an email thanking me for flying with them.These guys have really thought things through.I was so impressed,I bought some of their stock,and it's appreciated nicely as their operation grows.
I certainly hope that as JetBlue gets bigger,their business model evolves as well.Their standards and their profitability have given the traveler a great alternative to the expensive,sloppily managed carriers.
It would be a shame if they fell into the big Toilet of Unprofitability that most airlines swim in nowdays.

NewYorkYankee
December 16th, 2004, 11:01 AM
Sounds like a great airline!

NYatKNIGHT
December 16th, 2004, 11:10 AM
I'm on JetBlue whenever I possibly can, it's the best.
They also let you de-plane out of the back (in most airports), so if you're seated in the rear you don't have to wait for all those rows to leave first. As for the meal - they don't have one. It keeps costs down, and they encourage you to bring aboard whatever you want to eat - fine by me. They still give you the free drinks and provide the snack. It's a better flight without the whole big meal service anyway.

JMGarcia
December 16th, 2004, 02:42 PM
The best seat back TV thingy I've seen is on Song that allows you to play games and quizes against other passengers. A great way to kill part of a flight.

Personally, I think JetBlue is great for flights within about 3 hours. Longer than that I prefer the larger aircraft that most of their competition flies.

Plus, being a fairly frequent traveller, having a regular shot at an upgrade is hard to compete against for an airline like JetBlue. I personally think that the airlines business is going to split into price first airlines (a la Jet Blue) and service first airlines (where those majors that survive will probably have to head).