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JetBlue’s Anchorage Move Seems Smart, Others Should Follow

I’m still catching up on news from last week, and one thing I meant to touch on was JetBlue’s announcement that it will fly from Long Beach to Anchorage next summer. I’ve received several emails from people who think this is crazy and that it makes no sense, but I think it’s a great move. The thought of a growing low fare carrier presence in Alaska must make Alaska Airlines nervous, but there’s a lot of room for lower fares in Anchorage during the summer.

JetBlue Goes to Anchorage

Anchorage is a really unique market. During the summer, hordes of tourists go up to enjoy 20 hours of sun and mild temperatures. In addition, boatloads of people take one way cruises between Alaska and either Seattle or Vancouver, so they need flights, at least one way. But during the winter, the tourists stay away, and only those who live there or who have business up there bother making the trip.

Anchorage has, for the most part, been the domain of Alaska Airlines, and Seattle is the main jumping off point for service to Anchorage. Looking at a random Tuesday in January, Alaska has 12 flights a day. And that’s during the off season. Try that same Tuesday in July? There are 19 daily flights. In fact, there is hourly service from 8a to 10p, sometimes even half-hourly in there. There’s no question the demand is there.

And those 19 daily flights are filled to the brim even with the insane number of summer seasonal destinations that other airlines use to siphon traffic away. But other airlines aren’t the only ones getting in on the seasonal boom. Alaska has seasonal destinations as well. For example, LAX sees two daily flights during the summer while there are none during the winter.

But of all those flights, including seasonal ones, do you know how many are on low fare airlines? Eleven flights per week. Yep, Frontier has a daily flight from Denver and Sun Country flies four times a week from Minneapolis. That’s it. So the bigger question for me is . . . why is it taking so long for low fare airlines to try this out?

Is it a technical issue? No. Unlike Hawai’i, you don’t need extended overwater capability for Anchorage flying. Is it the distance? That’s probably a big piece of it. Seattle to Anchorage is nearly 1,500 miles, or about the same distance as from Phoenix to Chicago. Let’s say you’re AirTran and you want to go from Atlanta – that’s 1,000 miles further than going from Boston to San Diego. It probably doesn’t work.

For Southwest, it’s probably an issue of getting beyond its airport model. It doesn’t do seasonal destinations, and Anchorage would be a disaster in the winter. Maybe it’ll reconsider at some point. (CEO Gary Kelly did mention Anchorage as something Southwest could look at during Media Day last week, but he gave no indication that the airline would.) It’s also tougher for Southwest because it doesn’t do redeyes, and Anchorage is the perfect redeye market.

So that leaves very few low fare airlines as good candidates. I would think Virgin America could do it from San Francisco if it felt like it, but JetBlue is also a natural fit. JetBlue leaves a fair number of airplanes in Long Beach overnight, and now it can fly one of those airplanes instead of parking it. The flight leaves Long Beach at 740p and is back the next morning at 733a, ready for another day of work.

Also, while JetBlue has a finite number of slots at Long Beach, it can move them around seasonally. Is it worth cutting out one of the multiple-frequency short-haul flights for a couple of months? I’m sure. Right now, the lowest fare Alaska has filed from LA to Anchorage is $331 roundtrip, but you can bet that lowest fare won’t be available much on peak days. JetBlue has about the same fare right now, and that’s good money for the lowest fare in the market. My guess is JetBlue will sell more of the cheap fares than Alaska would.

If I’m Alaska, this in itself isn’t that concerning, but the potential for future growth by low cost airlines is. Then again, Alaska Airlines is a lifeline for so many people, that this may not be a huge issue. But it is an opportunity and JetBlue is smart for trying to take advantage of it.

[JetBlue photo By Aaron Gustafson from Hamden, CT, USA (jetblue airplane) [CC-BY-SA-2.0 (www.creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons]

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