Wherever JetBlue goes, goodies follow

pilot602

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CNN) -- By now everyone knows that JetBlue is the darling of the travel business. People love to fly JetBlue and tell all their friends they should do the same; travel writers love to write about JetBlue because it is such a great story.

But other airlines don't feel the same way about JetBlue because it is forcing them to change -- or die.

Free worldwide ticket

When JetBlue enters a market, fares plummet and entrenched airlines panic. For example, JetBlue entered the Boston market this month with a bang, offering introductory fares as low as $69-$79 each way to cities in Florida and California. JetBlue has also announced that it is looking to add flights from New York's popular LaGuardia airport (in addition to its hub at Kennedy.)

You can bet that the big guys are not sitting idly by.

In addition to matching JetBlue's $79 fares, Delta and American are making a stunning offer to keep their New York and Boston customers away from JetBlue. Their bait? Buy just two round trips between Boston and New York to a handful of Florida or California cities, and you get a free roundtrip anywhere they fly -- in the world!

That means that two weekend trips on Delta or American between New York and Florida this winter could net you a free round trip from New York or Boston to Athens, or Buenos Aires or Tokyo. Not bad!

But keep in mind that Delta and American are going to make it difficult to actually use those award tickets. They are capacity controlled, which means that there will be few opportunities to use them to fly to desirable destinations. Plus, travel is forbidden on or around most major holidays.

Triple miles

Something similar happened when JetBlue announced that it would offer just three daily non-stop flights between Atlanta and Long Beach, California last summer. Delta fought back mightily.

What's interesting is that Delta didn't even serve Long Beach from its Atlanta hub. Nonetheless, it matched JetBlue's introductory one-way fares of just $99 from Atlanta to airports throughout the LA basin -- LAX, Ontario and Orange County. Not only that, but it offered triple miles to members of its SkyMiles program flying the routes -- that's almost 20,000 miles per round trip! (Keep in mind that it only takes 25,000 miles to earn a free round trip on Delta.)

<font color="blue">In the end, Delta won its fight with JetBlue, which exited the market in December. But Delta had to give away the store to do so.</font>

Wannabes

As a result of the enormous success of JetBlue, we now have Delta's SONG, which attempts to offer a similar mix of low fares and high hip factor on flights from northeastern cities to Florida. Soon, United will launch TED, a wannabe hip low-fare airline-within-an-airline in Denver.

Even low-fare giant Southwest Airlines has had to sit up and pay attention. For example, the ever-frugal carrier has never offered any in-flight entertainment other than the antics of its flight attendants. But now that it's competing with JetBlue, Southwest says that it is studying its entertainment options. AirTran, a similarly frugal low-fare carrier, just announced it would add XM satellite radio with over 100 channels of programming to seatbacks this summer.

None of this would have happened were it not for JetBlue.

Travelers benefit

So, while the big airlines are engaged in a brutal fight with JetBlue, travelers end up winning -- with lower fares and a slew of extra benefits. Stay tuned. JetBlue has a lot of growing to do.

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Delta won the fight but had to give away the store? Who left the ATL market, again? Oh, that's right. JB did. last time I looked Delta was still flying so apparently they didn't have to give away the store.


None of this would have happened without JB? If I recall SWA "invented/patented" the business model JB is using so "successfuly." So, actually JB wouldn't be possible without SWA.

Bah.

I hope JB does well, and I wish them no ill-will at all, but this article makes 'em sound like the second coming of Christ. They ain't.
 

tonyw

Well-Known Member
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I hope JB does well, and I wish them no ill-will at all, but this article makes 'em sound like the second coming of Christ. They ain't.

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Look, you've got a mainstream media whose only familiarity with the aviation industry is when they plunk their fat asses into a first class seat paid for by their employer.

And they've been told by the "experts" that we don't need the traditional carriers anymore and that the LCCs will take over the world. These are, of course, the same experts who said that the contracts in place which they are now calling unsustainable were great tools to get labor peace during the dot com days.

So they write stories like this one. And it's ridiculous.

A few years down the road, where there are still major airlines handling the majority of the traffic, they'll just write another article saying that the LCCs have found a niche and are doing well but the traditional airlines are the future of aviation.

And then the cycle will start again.
 

CK

Well-Known Member
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If I recall SWA "invented/patented" the business model JB is using so "successfuly." So, actually JB wouldn't be possible without SWA.



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Wasn't JB started buy ex SWA guys?
 

JollyRodger

New Member
SOLID GOLD!!!

PURE GOLD:

On one hand you have Tonyw, the verbatim cliche of the mainstream media's influence, now decrying their ignorance in reporting a story on why people like JBLU and how the industry is shifting.

Then you've got pilot602 posting a rosy article about JBLU, and then discrediting the entire story because he believes SW started the LCC business model.

I love it. No one can refute any of the FACTS that put forth in the article. WHY DON'T YOU JUST ADMIT THAT YOU DON'T LIKE JBLU? With all the different opinions here, people would respect yours if you would just come clean.

I don't know what kind of agenda you have, but for everyone who doesn't have one, they can see the emperor isn't wearing any clothes. Why is that so hard to admit?

The fact is that UAL, AA are having to "sell the store" to compete with JBLU in a lot of these markets. Do you really think AA can sell tickets from NY to @ $79 for a sustained period of time?

Finally what makes a couple of student-pilots such authoritative sources for commentary on the airline industry anyway? "Oh that article was so ridiculous" -You guys kill me. Thanks for the laughs.
 

pilot602

If specified, this will replace the title that
Re: SOLID GOLD!!!

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Dude, you're an idiot.

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SOLID GOLD!

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Thanks!
 

tonyw

Well-Known Member
Re: SOLID GOLD!!!

I've got problems with the media's reporting about the LCCs for a simple reason. It sounds just like the same kind of reporting we got when they told us that we'd all be buying our toothpaste online.

Remember that? The brick and mortar stores were all dead. The new wave of new online companies were going to kill them all, and the brick and mortar stores should invest all their soon to be non-existant profits on.

Or, how about their articles touting the financial genius of guys like Ken Lay, Jeff Skilling, and Bernie Ebbers? Remember those? Enron winning company of the year from Fortune?

Fact is, all we are seeing is the typical boom and bust of the airline industry, exacerbated by September 11.

I've got nothing against JetBlue or Southwest (although I personally would try to fly anyone but Southwest because I like assigned seats). What I do have a problem with is the media talking like they're going to be the only ones standing in the end.

We very well could see a legacy carrier disappear in the next few years. It wouldn't surprise me at all. But they will still be around because for all the hype about the LCCs, they carry about 20 percent of traffic.
 

fly22

Well-Known Member
Re: SOLID GOLD!!!

I like Mr. Neeleman and what he is doing. Until any of us have done what he has we probablly ought not to rip on him and his company. I like anyone who is willing to tkae a risk and be competitive. If Jblue goes under I'll still admire them for trying. I agree with Tony that if were going to get angry lets get angry at the media.
 

FL270

New Member
Re: SOLID GOLD!!!

This thread is interesting to me. I do find it fascinating how many folks love to bash JetBlue for being successful. Yes, former SWA folks are involved with the company. Yes, Neeleman did start the only airline ever to be bought out by Southwest. No, their business plan is not the same as Southwest's. It is similar, but there are differences ... JetBlue has largely focused its business on a single hub, JFK. JetBlue assigns seats. JetBlue flies outside the continental United States. JetBlue will soon operate more than one fleet type.

The ATL pull-out. That happened for one simple reason, and it has very little to do with Mother Delta. JetBlue is, thanks to the ignorance and short-sightedness of the Long Beach City Council, extremely limited in terms of the number of flights they can operate from LGB. They chose to end ATL service because they could make more money using those limited slots to go other places. By their own admission, the ATL service was profitable. However, it was MORE profitable to go elsewhere, so that's what they did.

Yes, a lot of aviation is cyclical. However, there are some real changes taking place. The Big Six are not always going to be the only option for most people. The growth of the LCCs means that more people in more cities, going to more places, have an LCC option if they want it. That wasn't always the case in the past. Yes, the Big Six (or, more likely, the Big Five) will survive, and they'll thrive again. However, you can't just discount the LCCs as niche players anymore.

Tony is absolutely right about the media being foolish. No question about it. The media also promotes the "flavor of the month", no question about it. However, the fact is that those major airlines who are aggressively fighting the LCCs (UA, AA, and DL) are losing money doing it. Yes, they can fare match those cheap fares. They can give away triple miles or free tickets to Bangkok. However, they're LOSING MONEY DOING IT. Sure, the losses are obscured by the profitable parts of the operation (transoceanic stuff). That doesn't change the fact that they don't have a business plan that allows them to make a profit selling $79 tickets to Florida. The LCCs do. In the past, the majors would do this sort of thing temporarily, to drive their poorly-capitalized competitors from the markets. However, the tables have turned ... it is the LCCs that are well-capitalized, and the network airlines that are on shaky ground.

I can't help but notice that the two airlines of the Big Six that are doing the best right now (Continental and Northwest) are the ones that are concentrating on doing what they do best, rather than trying to imitate the LCCs. I can't believe I'm the only person who sees that.

My $0.02 ...

FL270
 

pilot602

If specified, this will replace the title that
Re: SOLID GOLD!!!

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I can't help but notice that the two airlines of the Big Six that are doing the best right now (Continental and Northwest) are the ones that are concentrating on doing what they do best, rather than trying to imitate the LCCs. I can't believe I'm the only person who sees that.


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No you're not.

But I wasn't bashing JB. I was bashing the perception that they are some kind of uber-airline. They're not. Plain and simple.

Anyone, and I mean anyone, can take the best funded start-up of anything and make it work for a few years. The real test is whether they're around in 20 years and still as successful as they were when they started. The question is how do they handle the problems they haven't yet faced (aging aircraft fleets, a pilot group who is tired of "5-yr contracts," rising fuel/operating costs, etc.). And no one knows the answers to those questions ... yet.

I completely agree with you that the mainlines should stick to doing what they do best and that's route coverage and "perks" but that doesn't mean we should just say oh look JB is the model that's going to solve everyones problems. Because the fact of the matter is it aint.

I'll say it again ... I do not wish JB and ill-will. But any company that has their pilots on 5-yr contracts and whose CEO has said he'd shut the company down before he allowed a union on the property is a company that has a lot to prove, in my eyes. Just MHO, of course. And what the hell do I know?
 

stuckingfk

Well-Known Member
Re: SOLID GOLD!!!

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I can't believe I'm the only person who sees that.

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Oh you're not!! You explain your point much better than I in writing, I do it better in person. But I know I have argued your side a few times in these threads that seem to pop up all the time.

Go JetBlue, and if those 190's look anything like the 170's, I would love to fly for whichever business decides include them in their fleet. JetBlue has said the comfort in the cabin will be even better than the A320 because of no middle row along with the inflight entertainment.
 

FL270

New Member
Re: SOLID GOLD!!!

Fair enough, 602. However, I do have to note that I haven't heard any JetBlue pilots complaining about the absence of ALPA on property, or their five year contracts. What I do hear are the pilots of other airlines complaining about it. Maybe those things don't work at Mother Delta or American, but they seem to be serving JetBlue just fine.

Obviously, the LCC model can't be all things to all people either. I can't go to London or Tokyo on JetBlue or Southwest like I can on American or Delta. So, there's a place for everyone.

FL270
 

pilot602

If specified, this will replace the title that
Re: SOLID GOLD!!!

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Fair enough, 602. However, I do have to note that I haven't heard any JetBlue pilots complaining about the absence of ALPA on property, or their five year contracts. What I do hear are the pilots of other airlines complaining about it. Maybe those things don't work at Mother Delta or American, but they seem to be serving JetBlue just fine.

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Of course, no one has come up for a 5-yr renewal yet, either! The company has only been in business what three or four years? Hey, they might work just fine. But I know I wouldn't want my job "up-for grabs" every five years. A 6-mo. medical and 6-mo.-yearly flight review is enough worry for me. I just see it as a huge potential for abuse by management. And it's not like there is any precedent in this industry for abusive management ...

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Obviously, the LCC model can't be all things to all people either. I can't go to London or Tokyo on JetBlue or Southwest like I can on American or Delta. So, there's a place for everyone.

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Totally agree. And that's the point. The article leaves the reader with the impression that without JB the world would com to a crashing halt! A little exageration there but you get my drift.
 

Mr_Creepy

Well-Known Member
Re: SOLID GOLD!!!

I have talked to my jetBlue pilot friends about this "5 yr renewal" and none of them know what I am talking about. They have been there near five years too.

In fact, two of them are now mgt pilots and have just passed the 5 year mark I think - didn't jetBlue start hiring in Jan '99?
 

montanapilot

Well-Known Member
Re: SOLID GOLD!!!

so since there is not a union at JB is the pay based on seniority also? What do their pilots max out on pay?
 

pilot602

If specified, this will replace the title that
Re: SOLID GOLD!!!

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I have talked to my jetBlue pilot friends about this "5 yr renewal" and none of them know what I am talking about. They have been there near five years too.
In fact, two of them are now mgt pilots and have just passed the 5 year mark I think - didn't jetBlue start hiring in Jan '99?

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Then how are their contracts structured or in other words how are they employed exactly?

And if they started hiring in Jan. 99, and the "5-yr contracts" do exist, then the very first round would just be starting.
 

JollyRodger

New Member
Re: SOLID GOLD!!!

JT:Yeah they began in 1999.

I wish I had a 5 year employment contract like JBLU. I can be let go at any moment and any oversight on my part could get me fired. Life is tough.

If I were the CEO of JBLU I wouldn't let unions start either. I would take care of my employees and create incentives that tie a portion of their compensation to the performance of the company. Not really all that complicated.

Smart, profitable companies that are fair with their employees have no need for unions. The JBLU CEO is a smart guy.

Why don't you just call a spade a spade. It seems that all the JBLU critics on this website don't like the fact that they aren't unionized and that they don't have any senior pilots making bank. Oh and the fact that JBLU is kicking the teeth out of the mainline dinasoars.
 
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