Topic of the Week: JetBlue Goes Premium

In annoyingly terse brief this week, JetBlue announced that it would introduce a “premium transcon product.” I call it annoying because they told us virtually nothing else except that plans will be revealed later this year. So, that leaves us to make wild guesses. If you were JetBlue, what would this look like?


36 Responses to Topic of the Week: JetBlue Goes Premium

  1. Neil S says:

    I fly JetBlue all the time, out of JFK. For business and vacations. I always buy the EML seats – love the fast security line, and the extra legroom is amazing.

    The only thing I’d pay EVEN “even more” for is no one in the middle seat. Either make the first few rows 2-2, or block the middle seat like some of the European airlines do in business.

    I can get more legroom. It has a TV. The snacks, drinks, and first bag are already free. The security line is already solved at most of their airports with even more speed.

    I’m not sure what else I need more of besides elbow room.

  2. Ben G says:

    I think that the most likely product to emerge is a “euro-biz” style blocked middle seat. The giveaway is that the premium product will only be available on daytime flights, not redeyes, so there has to be some flexibility in the fleet to be able to quickly change what product is offered.

    I think that they will also add things like free movies, complementary snack boxes and alcohol, and free WiFi. Those things would all be easy to implement. I do think that there is an outside chance that they offer different food options above and beyond what is currently offered for these premium pax. Since I doubt JetBlue has ovens installed, I doubt that hot meals will be a part of this offering.

    • Jetblue posted on their blog that it will be on all flights (not just daytime).
      No ovens installed, but VX manages to make cold sandwiches work just fine.

    • Sanjeev M says:

      If its just on transcons, then they are dedicating fleet to it? So this is clearly about the transcon market. I thought Jetblue might fly some mid-hauls with a better product as they’re feeding many more carriers at JFK now.

      I’m confused!

      • Fred says:

        Blocking a middle seat, free movies, and different food are all things that can be done without changing the aircraft at all, so a dedicated fleet wouldn’t be necessary.

  3. XJT DX says:

    Well IF they install 2-2 seating up front (doubtful), that will spark many more B6/VX matchup conversations…

    • I would think its more of “killing VX.” As we have discussed previously, it is highly unlikely for any M&A as B6 doesn’t want or need Virgin, and won’t pay a premium for it. If VX goes bankrupt and b6 can buy assets for no premium or even under value, then maybe. Otherwise, I just don’t see it…

  4. just two rows of 2×2 lie flat type biz class seats might make sense but i don’t think that would work revenue-wise given jetblue’s loads. two rows of 2×2 would take the place of at least 4-5 rows of extra legroom seating? i don’t think there’s any way that 8 premium seats could take the place, revenue-wise, of even 24 EML seats (4 rows of 3×3), could they?

    only if they think they could actually price and sell them at a factor of 3 or 4 times above the EML seats which would be at least $1,200 or more one-way for x-con flights each way. obviously, the “upgrade your seat for $150″ trick used by legacies would NOT work in this model.

    • all that being said, i agree that middle seat blocking offers a great deal of flexibility and a nice incremental benefit that many passengers would be willing to pay for without breaking the bank (for the airline or the px). the market is not just singles who want more space but this would be great for couples flying together who would be willing to “upgrade” to select aisle/window seats around a blocked middle. i know i would!

      but does that qualify as a “premium transcontinental product”? i’m guessing not…

  5. Ben says:

    I agree with Ben G and Neil S on the strategy here. Blocking off the middle seat would be extremely cheap to implement, since you don’t have to change anything. Those seats already have more legroom, so it is really a nice upgrade option that JetBlue can offer at cheaper prices than airlines with a traditional first class. Offering better meals and free movies would be a nice touch as well. I’d be willing to pay extra for this in a heartbeat. I’m curious to see which cross country routes they will offer it on. Is it just t routes out of BOS and JFK? Or are Florida routes in play, as well as smaller focus cities like IAD?

    • Ben G says:

      There has been so little announced at this point that I don’t think we really know. They said “transcon” that is really limited to just JFK and BOS right now. FCO’s only transcon service currently is via AUS, as the distances between FCO and LAX/SFO are well beyond the range of an A320, even with sharklets.

      • I think the first routes will be JFK-SFO/LAX, coinciding with the likely first a321 routes. Eventually, I see BOS and JFK for most/all nonstop transcons. Long term development may see some florida routes as PBI, RSW, and to some extent FLL has premium demand for reasonable prices.

        However, just blocking the middle seat and giving free food/drinks/blankets isn’t revolutionary. It doesn’t “beat” competitors offerings, but really matches VX (plus middle seat).

      • Arcanum says:

        Isn’t FCO Rome?

  6. Eric says:

    I agree with Ben, it has to be some type of European model ‘quick change’ cabin config and not a material seating change. Can be done on all aircraft types if the experiment works out. Any rev premium gained from an enhanced product would be wiped away with aircraft subs; end up giving away your premium product to Y pax or p*ssing off people who paid for it and it is unavailable.

    Soft product stuff like priority check in, security lane, free bags and booze and boarding gratis cold salads and sandwiches is easy.

  7. Unless they put aside planes to only be used transcon, don’t expect much. Only by outfitting certain aircraft with special seats/flat beds, it will still be the same Jetblue but with maybe some extra perks.

    The European style of a fold down middle seat to make a ‘table’ would help, but not much else they could do. At least that type seat could be used in other markets they deem ‘business’ markets where they could sell a higher fare to have no middle passenger.

    • I think there are certain planes that currently do more transcon based on fuel burn. But I agree, this would require dedication. And if they dedicate transcon, then do they dedicate high-density carribbean? Its a slippery slope to an operational challenge.

      At least for now, with LAX and SFO not having much other flying, most are turns JFK/BOS. LGB poses another challenge as I think many planes go JFK/BOS-LGB-west coast-LGB-JFK/BOS. But I suppose that could also change as needed

      • Noah, a tangent I’m curious on, do two planes that are generally identically configured (e.g. same engines, Airbus built them with the same plans, etc.) have significantly different fuel burns?

        • I know there are different weights and engine performance. Not sure how often it is the primary factor in a/c choice and “operational” decision (vs. scheduled). I think b6 has 2 different v2500 engines, some with the “selectone” PIP package and others without it. Its not big differences, but even 1% may avoid a fuel stop

  8. I see 3 distinct choices:

    1) Premium shell / lie-flat seats. This is unlikely as it is a major change in service and orientation. As was mentioned above, it would take so many rows out that it is unlikely to make more money than 3-4 rows of EML, no hot meals, etc. It also would be hard to roll out fleet wide and would require huge operational tradeoff in a320, a321, a321 with beds. I assume many a321s will go down to the DR (STI, SDQ) as they are cash cows, but there is no premium demand on those routes. Not sure if b6 wants e190, a320, a320s, a320neo, a321s, a321neo, a321neo with beds–it gets to a lot of different planes for a company that has already said it doesn’t think operating the e190 was a good decision.

    2) Euro-style modification seats, evolutionary E+. This is a likely option as it is “in a Jetblue way”. It is a game change, no competitor offers it, and it doesn’t overly emphasize a class difference. “Cuddle class” anyone?

    3) Spirit / AirTran style F: Bigger 2×2 seating, but no real special service or offerings. I think if B6 was going to do this, they would have done it a few years ago. Then again, I expected a321s on property a year or two ago. A first class “lite” was very old jetblue. New Jetblue likes flashy, cool, new, unique, and this doesn’t really seem to have that “wow” factor. Look at their terminals, no longer are they looking at cheapest rent, now its about style (T5, SJU, new MCO, plans for FLL, LGB, etc.)

  9. Zack Rules says:

    I agree that the euro biz won’t be the product. It is not revoluntionary (although this is the same company that brought us lame snack boxes). i think they will have 12 fully lie flat business seats 48 eml seats and 108 regular coach, 168 total,on 9 A321’s, 3 for sfo 6 for lax. It beats VX and matches United Delta and AA business (new biz). Maybe there will be some premium food offerings as well, although cold, free in biz but extra everywhere else.

  10. Aren’t “wild guesses” the whole idea behind airline and air travel blogs?

    • Having written the above, I must say I don’t have a guess. But I often refrain from guessing and predicting. I don’t like to predict sports outcomes, for example.

      There are a number of possibilities, but I do hope jetBlue will do something unique. Why shouldn’t airlines have distinctive offerings? I think there’s room for each carrier to offer some products and services that set it apart from the run-of-the-mill.

  11. BNA TOM says:

    Sound like a little more than “virtually nothing”.

    We announced this morning our intent to introduce a premium transcon product. Just as we started JetBlue with the mission to ?bring humanity back to air travel,? we?ll continue to deliver the best core product and service in the skies with the things you?ve come to know and love like: the full can of soda, free TV and radio at every seat, the most legroom in coach, first checked bag free, and excellence in customer service.

    We?ll plan on introducing a premium experience that offers a better product at a lower price in the highly competitive transcontinental market. We?re approaching our plans around a premium transcon product with a target launch date in 2014. Stay tuned for more plans to be unveiled later this year!

  12. AP says:

    I’ve said it before, and I’ll say it again: this is a prelude to a B6/VX tie-up. My guess is that the negotiations have been on-and-off, and never getting close to agreement on relative valuations, so now B6 is stepping up the pressure.

    • Why would B6 want VX? The only point to that would be to kill VX. That might work, but I’d be curious how many of VX’s customers B6 would be able to keep after merging the VX into B6’s product.

      • Don says:

        b6 would have to buy buy VX’s massive debt (what is it now….close to $700 million with no chance of declining). I don’t think b6 could afford that.

        • and even if they could, for what benefit? If VX is agreeing to a buy out, they likely dont have a future. B6 doesnt need the gates, planes, people, routes or debt. Not to mention any headaches of integration…

  13. Don says:

    They will put it where they can make the most money. Look at what they have done to the Caribbean. Maybe they might deploy it to the West Coast to compete with VX. Transcons don’t make carriers that much money unless you have more cash coming in from something other than coach seats anyways. I always wondered how these $200 fares per person make money when going from BOS to LAX. It will be interesting to see. But I don’t see it as a direct attack on VX. They saw a profitable opportunity and went with it. If it hurts the competition as well, then it’s a plus for them.

    In terms of the actually cabin I don’t think you will see ovens on that plane. Maybe a 2 x 2 seating configuration. Then the even more seats and then their regular seats. It is interesting to watch an airline go from the Southwest playbook to stepping their foot into the shallow end of the legacy carriers. Not sure about the flats beds either. If these are NOT red eye flights the people that can afford these seats will not sleep on day flight (maybe a little to adjust for the time change).

    Whatever it is it will be interesting to see how they price it too.

    • its not just VX they compete with, there’s already united’s p.s. (which announced new upgrades) plus delta and american have each announced premium transcon service.

      now that i think about it, B6 is actually in a very defensive position here, not the norm for them. they are likely doing something now in order to not lose their “premium” NYC business to the legacies, all of which are stepping up their x-con games in the near future (or already had a premium service like UA, even though it doesn’t actually fly out of UA’s NYC area hub which I find quite humorous).

      this is also why whatever B6 does will be limited to the JFK to LAX and SFO runs, maybe BOS to those two cities but probably not IMO. definitely no IAD, LGB, OAK, SAN, etc.

      • Don says:

        I agree. United and AA (and sooner or later the new AA) will be a true test for b6. Let’s see how this will affect them.

        I agree on the other part too. No IAD, LGB, OAK, and SAN. I can add to your “etc.”

        No BUR, SMF, SLC, DEN, ANC, SEA, PDX

        • lol yeah whatever the product is i think the final answer will be it will only be on JFK, LAX and SFO. BOS, maybe, but I’d still think not because the premium demand just isn’t there compared to NYC.

  14. Brad in Brooklyn says:

    How about the Skycouch product like the one Air New Zealand offers? Three economy seats turn into a flat bed. If no one buys the “Skycouch” you can still sell the three seats individually.

    http://www.airnewzealand.com/economy-skycouch

  15. Joe says:

    Look what was posted on WorldAirlineNews.com about JetBlue’s A321’s…
    http://worldairlinenews.com/2013/08/04/jetblue-airways-new-airbus-a321-cabin-is-leaked-on-vimeo/

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