Long Beach Ends Talk of a Customs Facility, Will JetBlue Walk?

If there’s one thing we learned during the last election, it’s that misinformation, fear-mongering, and bullying are now a blueprint for success. The local anti-airport group here in Long Beach took that to heart and has now successfully killed any chance of a customs facility at Long Beach Airport in the near future. The level of misinformation and bullying was astounding (and frankly, impressive), and the city council fell for it by a surprisingly lopsided vote of 8 to 1 (kudos to Councilmember Dee Andrews for holding strong). With the decision having been made to not do anything, now the question becomes… will JetBlue bother sticking around?

If you want the long backstory, you can read this previous post of mine. In short, JetBlue wanted to be able to use some of its slots to go down to Mexico and Central America. It was willing to pay for most of the customs facility. To me, this seemed like a good opportunity to lock JetBlue in for awhile while getting concessions to help the city. If JetBlue was willing to agree to terms that made sense for Long Beach, this was a no-brainer. But yesterday was supposed to be a vote to allow the city to enter into those financial discussions. That will not be happening thanks to some very aggressive tactics by the local anti-airport group.

That group started probing months ago on ways to make its message stick that a customs facility was horrible. It coined the change an “expansion” despite the fact that the noise ordinance wouldn’t have changed and the number of commercial flights would be no different. It just would have changed where those airplanes were allowed to go after departing. After the study that the city council commissioned came out, the anti-airport folks decided to pick and choose which facts were acceptable. The report said that there wouldn’t be demand for all that many flights and it wouldn’t impact the noise ordinance. The anti-airport folks screamed that this wasn’t true. Yet when the report said few jobs would be created in the city, the anti-airport group treated that like gospel. Anything to support the narrative, and that was just the start.

The group threatened councilmembers (and the mayor) who dared to vote for the facility. If they voted for it, then this group would build “an army” to do everything possible to make sure they didn’t get re-elected. The group also threatened mass litigation efforts on behalf of residents. But wait, there’s more.

The group went on the attack against JetBlue. In general, I’d say nearly any community in the country would drool over the prospect of having JetBlue create a focus city at their airport let alone an international gateway, but not here in Long Beach. JetBlue is generally considered a good corporate citizen wherever it goes. It puts a lot of money into the community by building parks, sponsoring events, etc. But here in Long Beach, the anti-airport group made JetBlue out to be a villain, a prime example of an evil corporation. All that money the airline put in the city? It was only to bribe councilmembers to do their bidding. With this kind of climate, it’s a wonder any airline would bother sticking around.

Of course, JetBlue is a business, and it needs to make decisions based on the viability of any operation. After the vote last night, Rob Land, Senior Vice President Government Affairs & Associate General Counsel for the airline gave what I can only call a terse statement.

We are profoundly disappointed that after years of delay and a city-mandated study validating the safety, security and economic positive nature of the project, that the City Council would reject the development of a Federal Inspection Station at Long Beach Airport. JetBlue will evaluate its future plans for Long Beach, the greater Los Angeles area and California.

So will JetBlue stick around? The airline is in a really tough spot. See, despite the fear-based claims of the anti-airport group that so many airlines would want to fly to Long Beach, it’s really not a hugely desirable airport. Sure the customer experience is great, but the fares are low and that’s not what an airline likes to see. After having tried many different tactics to serve the airport, JetBlue had found a happy place flying short haul markets with a reduced schedule, especially in the winter. But last year, things changed.

When Southwest announced it was coming to town and it would gladly use slots temporarily not being utilized, JetBlue had to make a decision. It could have let Southwest ramp up and make life worse for JetBlue (11 of JetBlue’s 35 slots are used to fly to Vegas and Oakland, markets Southwest competes in) or it could have ramped up and tried to keep Southwest out. The downside to that, of course, is that with more capacity, fares would suffer even further.

JetBlue chose the latter option and has ramped up, but many assumed that was simply an effort to keep Southwest at bay until JetBlue could start using those slots to fly internationally. With that option off the table, at least for the foreseeable future, JetBlue has to make a decision once again.

With no option for international service on the horizon, JetBlue now has to justify its existence in Long Beach. That may be hard to do. This will go hand-in-hand with what JetBlue decides to do for an overall West Coast strategy. You can be sure Ontario started calling JetBlue about 5 minutes after the vote was done, but there aren’t any perfect options for JetBlue in Southern California right now. The only thing that is clear is that Long Beach doesn’t really want to help the airline with its future plans. It would not surprise me in the least to see JetBlue start to scale back its operation. I wouldn’t even be surprised if JetBlue eventually walked away entirely.

If JetBlue were to leave, it would be a huge loss for this community, though the anti-airport group would likely cheer the demise. The only good news is that today, there is another interested party. Southwest seems keen on scooping up slots to do more flying, but if that were the case, the destination footprint would be a lot less compelling. Judging by what we see at other surrounding airports, I’d expect a fully built-out Southwest would do the Bay Area, Vegas, Denver, and maybe Phoenix. I suppose there’s a long shot at Chicago or Dallas, but I’d be surprised. That’s a far cry from the breadth of options JetBlue provides today.

The only thing we can do now is wait and see what JetBlue decides to do on the West Coast in general. My guess is Long Beach is no longer going to be central to those plans. It’ll be lucky to be a part of them at all. It’s ironic to see this happen considering Long Beach’s motto is “The International City.”

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