JetBlue CEO On American, Open Architecture, and Yes, Snack Boxes (Across the Aisle, Part 2)

And now we’re back with Part 2 of my across the aisle interview with JetBlue CEO Dave Barger. Today’s focus is on the airline’s “open architecture” which has pushed them toward the Alaska Airlines of the east – willing to partner with anyone and everyone if it’s beneficial to the airline. And I hit on snack boxes too. Had to do it, right? (See Part 1, Part 3)

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Cranky: The open architecture – a lot of people seem to think that you’ll just go naturally into oneworld at some point. Is the open architecture something that prevents you from going into an alliance? Or is it just “we’ll think about it when the opportunity comes up”?

Dave: I think a good way to look at it is as the largest airline at Kennedy, largest Across the Aisle from JetBluedomestic airline in New York, largest airline in Boston, locations like that. You look at Kennedy as, depending on the time of year, close to 90 airlines operating in and out. Open architecture, whether it’s oneworld, Star, Skyteam, or unaligned, that’s good for JetBlue. Because it’s the power of our network. It’s the affirmation of the brand. It’s the investment we’ve made whether it’s on the ground or in technology. I think we’ll start to understand more about traffic patterns as the result of each partnership, which gives you more data, more pixels to say, what makes sense? To declare a path into an alliance is limiting as well. I think we’re so different because the geography and power of JFK, and we’re in a really nice position to be in.

Cranky: I take that to mean that if American came knocking, saying they’d like to sponsor you into oneworld, similar to what BA has done with Air Berlin in Europe, it’s something you would consider but you don’t have enough data yet knowing how all the flows work to make a decision on something like that?

Dave: I think it’s early. But we have historically been an organization that’s always open to taking a meeting because you want to explore what makes sense, whether it’s oneworld or somebody else. Because it’s the best way to optimize our relationships and our revenues, so we’ll see what plays out. Again, it’s so early. With Sabre, that conversion was January 29, so we’re still in effect still putting in place pieces of Sabre to optimize our abilities electronically, so the next couple of years . . . the traffic patterns and behaviors are important. There’s nothing better than looking at data as a result of these partnerships to help with these decisions.

Cranky: On the American partnership, I think a lot of people were taken by surprise by it. Looking a little further, it seems to make sense. Is that something you guys had focused on or did American reach out to you? As you said, you’re open to taking a meeting.

Dave: Sure, American reached out to us but I look at it, I love the word contrarian. First of all, we’re contrarian because we’re into our second decade. If you look at the airline industry since deregulation, the number of airlines that have flown into their 2nd decade is pretty rare . . . . We’re running the company based on financial metrics, return on invested capital, cash flow. That is different. Product. We’re looking at the JD Power award six years in a row, best in class, highest score. That’s contrarian. Not overbooking, contrarian. Even more legroom, contrarian. Culture, direct relationship with our staff in a heavily organied industry, contrarian.

So you look at American and JetBlue in the interline relationship, the partnership, the slot swap, the frequent flier, why not? Because in the traditional models, I still believe that fundamentally the industry is broken. So you’ve got to do things differently. What got us here in the first 10 years won’t get us there in the next 10 years, so I’m really delighted. I’m excited about what the American partnership could mean for us. They have a very significant presence in New York. So the ability to offer our customers in 18 of our markets, Buenos Aires, Tokyo, London on an itineray and vice versa, it’s pretty significant.

Cranky: And DCA [Washington National]

Dave: That’s right. And access to DCA in exchange for slots that I imagine American can better utilize than we can. And don’t forget the additional flight into White Plains. That’s contrarian, it’s such an important word in this business.

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Cranky: Ok, you want to talk contrarian, so I have to bring this up. Snack boxes.

Dave: I was just gonna say, it had to be snack boxes.

Cranky: I’ve been a vocal critic of it. You know, I came over and did the taste test. Some tasted good, but it’s nothing special. It’s similar to stuff youll find somewhere else. So it’s just kind of boring, I guess, and not what I expect form JetBlue. I expect a better experieince and the snack box doesn’t really fit into that. I’m kind of curious where you see that going. Is this something that’s, as I’ve heard others say, it’s a step?

Dave: I look at it as additive. By comparison, other airlines that are selling their snack boxes, that’s basically what the product is. . . . For us, beverage service is what it’s been for 10 years. The ability to participate in the full selection of beverages. You see that at other airlines, but I don’t think you see access to make yourself at home in the galley. I look at the unlimited snack basket. Whether it’s the traditional blue chips or other snacks. The product already is solid, so when you start to look at over 3 hours and 45 minutes enroute, especially on the transcons, I look at this as additive. Again, it’s directional.

There are some pretty interesting names to partner with to create that next iteration of the snack box. I would like people to think, Brett, your readers to think, that JetBlue is kind of a cool airline. Somebody is going to come up with that next generation, you start to talk about cobranding opportunities, that’s just cool. I think XM radio was thought of that way as well as DirecTV. We’ve been selectively a follower when it comes to the wifi brigade as opposed to really what’s happening and we’re working hard on that iteration as well. Look at the snack boxes as additive. Look at it as directional.


19 Responses to JetBlue CEO On American, Open Architecture, and Yes, Snack Boxes (Across the Aisle, Part 2)

  1. frank says:

    There are some pretty interesting names to partner with to create that next iteration of the snack box. I would like people to think, Brett, your readers to think, that JetBlue is kind of a cool airline.
    ==================================================

    Exactly. What most airlines have done with the snack boxes. Add items, remove items or CHANGE the contents.
    I’ve spoken with Jetblue flight attendants, and have asked, “do they sale?” They said, yes. Too bad you didnt ask the CEO about sales numbers.

    and, I’d like to hear your response on his answer, Cranky.

    • CF says:

      My response to his answer would be that I still don’t think it fits the brand. I get that it’s a test to see if it’ll work and if it does, then we’ll see better options.

  2. Gray says:

    “Look at the snack boxes as additive.”

    =========================

    I look at them as filled with additives.

    • lol, too easy, but still lol

      • I wonder if this is just a test to see how much they can sell and if it makes sense to add ovens and/or fridges onto the planes, or maybe just the transcon flights. I figure that’s the game plan from the focus on the numbers.

        • CF says:

          They don’t have airplanes dedicated to transcon vs short haul, so that would be a tough sell. I would be surprised if we saw a full galley show up, but then again . . . who knows?

  3. A quick trip into a local store you can buy everything you could find in those snack boxes and for a lower price. Better to chose your own snacks then to pay a high price for items you may not care for. There is no reason not to bring your own snacks at the start of a trip since you are leaving your own home and can shop ahead of time for your trip. On the return just pop into a local store near your hotel and buy some stuff again for less money.

    • james says:

      Exactly. In my travel bag I keep a tiny pantry of nuts, raisins, oatmeal packs, tea and crackers, and before leaving grab some apples or bananas. I even bring cold chicken along for lunch or dinner when I leave from my house.

      I’ve never gone hungry and can east on my own schedule and rarely buy more than a coffee.

      • Sean S. says:

        You mean you haven’t been accosted by TSA for bringing food in various states of dethawing? it could be a liquid…or a solid!

        • james says:

          Funny enough I went to Denver on Saturday to assist an older relative in a connection, (with a gate pass.)

          I carried a box of six cupcakes through the TSA checkpoint, (from an organic local bakery) and the screeners all commented about how good they looked – and didn’t even get into whether the frosting was a liquid or solid.

          Even one guy behind the xray said to the other “Those are cupcakes man.”

  4. Frank V says:

    CF, I’m always amused by the graphic you use for these great interviews: http://www.flickr.com/photos/crankyflier/3396225913/

    Since all North american airlines are non-smoking, can you airbrush out the ciggie before the PC police swoop down on you for allowing an electronic image to smoke.

    Frank

  5. “I still believe that fundamentally the industry is broken” – Dave Barger

    This is exactly why Jetblue is succeeding in an industry dominated by failures. Failure to be profitable more often than not. Failure to avoid bankruptcy. Failure to have productive relationships with their employees. Failure to continue to exist (in many cases).

    Too bad more airline execs can’t, or won’t, acknowledge this. As such, more failures should be expected.

  6. Martin J says:

    he didnt really answer the question well about the snack boxes!!!

  7. tharanga says:

    “additive”
    “directional”

    These words might have meaning to him, but I have no idea what he’s saying. Is he saying anything at all?

    • i took “additive” to mean that B6’s buy on board boxes are in addition to their already class-leading free beverage and snack service, i.e., that their snack boxes are in addition to, and not replacing, any existing service. on legacy carriers, the snack boxes were generally a replacement for meal and/or sandwich services.

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