JetBlue’s Best West Coast Option May Be to Walk Away

JetBlue has a West Coast problem. While in general the consensus is that JetBlue needs to find a better way to serve the West, I’m not so sure about that. The best option may be to just focus elsewhere. If things were that simple, however, then this wouldn’t be worth writing about. It’s much more complex than it may appear on the surface.

In general, JetBlue’s strategy on the West Coast is simple. Fly from as many airports as possible to the airline’s East Coast focus cities of Boston, New York/JFK, Ft Lauderdale, and on rare occasion, Orlando. The West Coast is full of spokes that best serve the JetBlue loyalists in the East. The one exception to that, however, is Long Beach, just south of Los Angeles.

In the beginning, Ontario and Oakland were going to be JetBlue’s western outposts. When Ontario couldn’t bring costs down, JetBlue moved over to Long Beach. With competition from Southwest as well as the start of Virgin America in San Francisco, Oakland folded early as a focus. But Long Beach soldiered on with shifting strategies every couple of years to try to make it work. The early days of rapid growth at JetBlue ended once David Neeleman was ousted nearly 10 years ago. But the growth that did follow really focused on the East Coast, with Long Beach more of an afterthought thanks to both slot restrictions and probably, a recognition that there wasn’t great opportunity anyway.

When industry observers look at a route map, they don’t like to see holes. US Airways and America West merged, and the hole in the middle of the country gave analysts pause. That worked out nicely, but as the big guys have gotten bigger, the need to serve all masters has become more apparent. For that reason, the American and US Airways merger was so attractive. That argument served as a central argument in favor of the merger.

As you all know, when analysts looked at both the JetBlue and Virgin America route maps, they started salivating. Here was an opportunity to create one premium airline that could serve both coasts. It undoubtedly would have meant the end of Long Beach, but JetBlue would finally have a West Coast strategy that many felt was needed. Alaska had other plans, however, and bid it up so much that JetBlue had no choice to walk away. This left JetBlue to go back and do some soul-searching to figure out what to do next. There are a lot of options but none of them are good.

Continue the Long Beach Focus
Continuing to push on Long Beach is like returning to a spouse that keeps beating you. For most airports, the arrival of a JetBlue focus city would be like manna from heaven. It’s a dream come true. But Long Beach has been generally terrible to JetBlue since the day it arrived in 2001. First, it forced JetBlue to serve its customers in trailers for 10 years despite early promises that it would construct a new concourse. (Only after JetBlue threatened to leave here on the blog did the fantastic new concourse get built.) The anti-airport folks have consistently (and wrongly) targeted JetBlue as being a terrible neighbor, and the fight recently culminated with the city council refusing to even entertain JetBlue’s request for a customs facility to fly to Latin America. With the recent news that the airport is looking to pull slots away from late night violators, JetBlue is going to be faced with rising costs while Southwest tries to ramp up and push the airline out.

If Long Beach were a good revenue generator, then it would be worth putting up with all this insanity, but it isn’t. And it wasn’t good even before Southwest started in the market. Look at Long Beach to Oakland for the full year 2015. I like this market, because even when comparing to LA, you have airlines dominating with all coach seating (unlike San Francisco). The average fare was about $107 one way. From LAX? It was about $125. Even Ontario was up around $130 with even more seats than JetBlue had from Long Beach. This is one market, but the results are the same elsewhere. And with Southwest coming in, things are only going to get worse for JetBlue.

I love flying JetBlue, and I hope they stay for selfish reasons. But it’s hard to see why the airline would stay in Long Beach unless it felt it needed to have some kind of West Coast presence. What are the other alternatives if that’s the case?

Merger
The easiest option would be for JetBlue to merge, but with whom? The only one that’s feasible that would give the airline a real presence would be the newly-hefty Alaska. But Alaska is still in the throes of the Virgin America merger, and I can’t imagine it would be able to take that on. This could be a long term strategy, but it’s not something to count on now. And all those smaller carriers that have been rumored, like Hawaiian? Those are all useless to expanding the West Coast presence.

Another Focus City
Earlier this year, CEO Robin Hayes said JetBlue wasn’t looking for another focus city in the West, but should it be? No. Because where would the airline go? A couple years ago, the argument could have been made for San Jose. The airline’s vibe would have been a great fit, and there were more opportunities available. But for whatever reason (maybe waiting on a Virgin America merger), JetBlue hesitated. Now Alaska and Southwest have really started adding service there. The same goes for San Diego. There’s no other obvious place to go.

Some have suggested a return to Ontario. Under new airport management, costs would be much lower, but the revenue base just isn’t there. If JetBlue could pull people from LA as it did down to Long Beach in its early days before low cost carriers went to LAX, then it would be more compelling. But that ship has sailed, and the bigger opportunity in Ontario is for the ultra low cost airlines. There just isn’t an airport that’s an obvious option for JetBlue to use.

Go Small
When JetBlue invested in JetSuite, the thought was that this would somehow help JetBlue’s West Coast presence by flying little private jets around to smaller airports. This will never provide blanket coverage to people in LA or elsewhere. It might be a niche, but it’s not one that’s going to give JetBlue any kind of measurable presence.

Scrap It
With these options exhausted, the next best option appears to be… walk away. Just shut the Long Beach focus city and keep serving the West Coast as a bunch of spokes from the eastern focus cities. Despite the fact that analysts love seeing maximum coverage, this is a strategy that can work. Keep growing from the East Coast, surge into Latin America and Europe with new aircraft types, and just worry about the West Coast some other day. Maybe that Alaska merger will eventually come to fruition.

I don’t think anyone outside the airline would blame it for walking away from Long Beach after the treatment it’s received. But it’s not the people outside the airline that are the problem. It’s the people on the inside.

Long ago, JetBlue opened a crew base in Long Beach, and it’s a popular place to be. If JetBlue were to shut Long Beach, it wouldn’t need a crew base anymore. The cultural impact could be significant. JetBlue took great pride in not being unionized for years. Its pilots eventually voted in a union, and negotiations have dragged on (as expected). Mediation begins this week. A closure of the Long Beach base probably wouldn’t sit well with the front line. For an airline that has put culture first since the beginning, this might be too much to stomach.

In the end, there is no good option for JetBlue on the West Coast. In normal circumstances, that may not really be an issue. Just focus on doing it right on the East Coast and don’t worry about the West. But when the culture component gets added in, the decision becomes tougher. Still, it seems like walking away from the West Coast may be the best option out there.

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91 Comments on "JetBlue’s Best West Coast Option May Be to Walk Away"

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Kilroy
Guest

With few exceptions, if you aren’t within two hours’ drive to salt water, JetBlue doesn’t serve your area.

A
Guest
Ha ha! Probably the best description of JetBlue I’ve seen yet. Their route map is very deceiving as well since most flights in “flyover” land require a trip to Boston to get anywhere. I’d be curious if people in places like Chicago, Detroit, Dallas or Houston really use B6 as a west coast airline. In that sense, maybe walking away is a reasonable solution. From what I hear they are a great airline but they don’t serve MSP so I won’t be flying them. The news that SY is going downmarket hasn’t been well received locally. Maybe they can take… Read more »
Kilroy
Guest

I have a leg booked in another month trying to get from JFK to DTW on a Sunday evening. Naturally, the only viable JetBue routing involves a stop in BOS (so JFK to BOS to DTW). I’m surprised JetBlue didn’t make me hit FLL so that I could see all their hubs before venturing away from the ocean, but maybe they will if the flights get messed up.

stogieguy7
Guest
I have a ton of friends in New England and, after a bad flight on AA, I posted to social media and several of those friends couldn’t imagine why I didn’t fly B6. Well, because I live in the Chicago area and from here, B6 is neither feasible nor worthy of consideration. Yes they serve ORD, but with few flights that are basically there for New Yorkers and Bostonians to come for a meeting, Vienna Beef dog, then go home. And that’s the case for most of the US. The comment about them not serving places more than 2 hours… Read more »
Kilroy
Guest
You make a good point… There is a huge difference between “flies to/from” and “serves”. For example, Sun Country, Spirit, etc do a lot of flying TO Florida and other sun destinations, but they primarily SERVE leisure travelers from up north who are looking for a cheap flight out to some sun and sand. B6 may fly TO ORD, DTW, etc, but does so primarily for the convenience of its core NYC/BOS base, not because it’s really trying to serve pax based in ORD/DTW/etc… If you’re a business traveler based in ORD or DTW, you’re probably going to go to… Read more »
stogieguy7
Guest

Yes, from ORD it’s UA, AA or DL (shuttle) to NYC and UA, AA or DL to BOS. And let’s not forget WN from MDW, offering plenty of flights to both cities (plus MHT, PVD, ISP, etc.). B6 is not a competitive option from this area. To be fair, B6 is also big out of FLL and MCO – but that just emphasizes the idea that they are primarily an east coast airline. Too bad (for B6) that they weren’t able to snap up Virgin America – which would have at least solidified their presence on the west coast.

Tim Dunn
Member
B6 is trying to be significant on the west coast against carriers that are much larger and richer even while B6 executes its best strategy – LGB – very poorly. B6 has no one but itself to blame at LGB and the residents have every reason to not want to accommodate an airline that shows disdain for the noise regulations that B6 knew existed when it built up its LGB focus city. No other airline has shown as much disregard for the citizens of the communities it serves as B6 has at LGB WN is a much larger and richer… Read more »
Zack Rules
Guest

The fines from violating the noise ordiance went to the Long Beach library. http://www.scpr.org/news/2015/07/29/53455/long-beach-airport-noise-violations-fund-library-a/
Without JetBlue, your library will have to look elsewhere for funds.
I do not have a lot of sympathy for folks who live near an airport and complain about noise. I live near National Airport, the Metro, and CSX’s main line tracks but I knew that when I moved here.

Tim Dunn
Member
and yet clearly the people who elected the Long Beach City government have a different opinion. As hard as it may be for some to accept, this forum’s readership is not reflective of the general population. The vast majority of people in the world don’t like airplane noise and they have no allegiance to any airline if it comes at the cost of the public’s own well-being. Further, the LGB community has been fighting the number of flight operations at the airport for years and the current level, IIRC, was imposed by a court – not the citizens. And, again,… Read more »
Oliver
Guest

Re folks near airport – as Tim said, the noise ordinances apparently existed when B6 started service. So yes, the residents knew the rules, and B6 knew, too.

Aj
Guest

You sound stupid and uneducated. Educate yourself on this subject then comment.

Itami
Guest

You put it in better words than I could, Cranky. At this point, it seems like LGB really doesn’t even really want B6 there and there’s probably more profitable uses for those planes out east, saturated as it may already be.

Shane
Member

There would be nothing wrong with forgoing a west coast hub. After all, Alaska does not have an east coast or mid-west hub! Post-merger DAL almost counts for Alaska if it can figure out what to do with the slots. But just like when America West tried a go at Columbus, sometimes the best strategy for growth is to grow your strength instead of trying to find a strength that you don’t have.

Guest
Guest

Perhaps a move to San Bernardino (which already has a full customs facility and domestic/international terminals) would be an option. The costs would be really low, and with service to Latin America, the passenger base would be sizeable.

Matt D
Guest

San Bernaghetto? Seems like a nice idea but the area in which it’s located is….well…let’s just say….not a large potential pool of travelers. Even ONT which is only 25 or so miles to the west in the middle of a much larger and diverse population pool has been pitifully underutilized for years.

Southeastern
Guest

How about their operations at SMF? The flights always seem to be full to the East Coast and it looks like Jet Blue and United have seem some pretty solid growth while Alaska has been in a bit of a free-fall recently.

http://sacramento.aero/scas/about/reports/

Southwest is still the giant but it seems like there is still potential for a solid #2 (contingent on American’s plans).

MRY-SMF
Guest

It would be nice to see more transcons from SMF. I took the SMF-CLT redeye on American in June and it was completely full. BOS on JetBlue is currently seasonal. JetBlue might be SMF’s best hope for Florida service with their FLL focus city.

Note:
Alaska’s free fall can be attributed to their addition of SkyWest flights this year. If you add the Alaska/SkyWest flights (under “Commuters” to Alaska and Horizon, you actually see an increase over 2016.

MRY-SMF
Guest

As for west coast flying out of SMF, I doubt they could compete with Southwest and Alaska. All major carriers offer a SMF-LAX route.

Jim M
Guest

I’ve often done the SMF-LGB route, and JetBlue does a great service on that. Its too bad they can’t just squeeze their way into SNA.

SYVJEFF
Member
Hi Cranky – On a pure business basis, LGB has made it clear that JetBlue is no longer welcome. You nailed it that ONT would be another place to shift to, thanks to customs. I’ve wondered why they haven’t stepped up BUR adding to it’s current one red eye to JFK and making this a Mint route for the entertainment industry crowd or those in Northern LA and Ventura County. I’m guessing length of runway? Too much competition on the high end side from American and Delta at LAX? Can a publicly traded airline be profitable doing what it does… Read more »
apanelli
Member

I agree, the best strategy is to walk away…and then start a code-sharing and reciprocal elite deal with the new Alaska, to replace Alaska’s terminating deal with American.

RobLL
Guest

This struck me shortly after Alaska bought Virgin. Then the two airlines need to support someone serving short flights in the central part of the country. Both, but especially JetBlue, avoid flyover country.

robert.rolwing
Member

Jet Blue could merge with Frontier, and it would be easy as both airlines’ fleets are are all airbuses /they could call themselves Blue Frontier Airlines /this merger would help them compete much better with southwest

Mike Kowal
Member

Cranky, Really? JetBlue is being mis-treated by those airport impacted residents in Long Beach? Someday you need to write a balanced article which includes JB’s numerous, illegal violations, better yet… why not talk about the economics involved, after all isn’t money and profit the primary focus of any business?

Don Kemp
Guest
And here’s one of them now! Kowal, you’d have a point if you could highlight a violation that wasn’t related to weather or unavoidable mechanical issues. But you can’t. You and yours have seized on this as a way to further make life miserable for the airport and the airlines. If this airport hadn’t sprung up in the 1920’s and led to the development of the vast amount of homes in the area, you’d be selling cars instead of real estate and the city would be without one of its major business centers. You go right ahead and keep being… Read more »
Spirit FF
Member
Mike, it’s uninformed people like you that spew false information. First, the airport DOES NOT have a curfew. Airlines are required to schedule flights between 7A-10P. Flights after 10P are subject to lower noise limits, and are assessed a fine for violating. JetBlue agreed to a “Consent Decree” for every noise violation, they donate to the Library Fund. How dare you condemn Cranky for his article. He is not the “press.” He is an industry expert, and gives his view from an industry perspective. Unfortunately, rags like LBReport.com spew one view articles. And if you leave a comment, as a… Read more »
D8Rez
Guest
Mike being one of the many HUSHers who has continually spread fiction that city would go to hell if any changes were made at LGB other than shutting it down, the other two being former member of council and another real estate agent on the other side of LGB. JetBlue has been the best thing for residents under the flight paths, their planes are considerably quieter than prior tenants and other current tenants and they have been patient in negotiations with the city over the years, trying to work with the city to maintain their status at LGB. Mike has… Read more »
ken
Member
Calling Jet Blue quiet is a bad joke over here in Huntington Beach. It is impossible to sleep through a Jet Blue screaming over your house at 1500 feet. That high pitch sound that the A320 makes will wake the dead. it can be heard from a long distance away as it approaches our neighborhoods. There is currently a large group forming in HB to combat this very issue. On the other hand, a Southwest jet is hardly noticeable when it flys overhead. Jet Blue has been a terrible neighbor to us ever since it arrived on the scene. Hopefully,… Read more »
Jack R
Guest
There is one option: LAS. SWA has a monopoly or near monopoly in LAS with very high year round load factors. From LAS JetBlue could connect RNO, SMF, OAK, SJC, BUR, ONT, LGB, SAN and other west coast cities to nearly every city they serve on the east coast. Additionally there is a solid O & D demand to/ from LAS and facility space. As for a merger they need a carrier that serves middle America like Spirit or Frontier. These airlines could be transformed into the JetBlue product fairly easily. (And they would be doing all of us a… Read more »
Anthony
Member

Hmm, that’s an intriguing idea, especially the prospect of a B6-F9 linkup. But if the combined carrier dropped the ULCC business model, would they be able to compete with the triumvirate of AA/UA/DL?

DN
Guest
JetBlue has faced a perennial problem trying to figure out the best strategy for gaining a sustainable and profitable presence in the West. I think CF is spot on with his analysis and what the likely go forward options might be for the airline. My preference would be to see JetBlue move its western hub out of California and go to Las Vegas to tie east coast flights to a more north-south network structure in the west, and onward to Mexican and Central American destinations. It also gives JetBlue the opportunity to free itself from increasingly expensive California labor law… Read more »
Jim
Guest

LAS is a low-fare, leisure destination. If JetBlue has a revenue problem out of LGB, moving to LAS isn’t going to help.

Oliver
Guest

Isn’t B6 to a significant degree a low-fare leisure carrier?

Jim
Guest

I think it started out that way, but I wouldn’t say that is still the case. Their large hubs are in major business markets (JFK and BOS) and they have been investing in premium product (mint) lately. They still have a lot of leisure flights to Florida, but I doubt they can make a west coast hub work with just the leisure market.

DesertGhost
Guest

Alaska does quite well without an east coast focus city. I’m guessing jetBlue will be just fine if it pulls out of Long Beach (except for flights to its east coast strongholds).

cargoman
Member

I can almost answer my own question, but I’m going to ask anyway….what about John Wayne?

Guest
Guest

jetblue is currently on the waiting list @ SNA, again slots are limited.

DumbDumb
Guest

I know it’s cost prohibitive, but I wish B6 would buy a fleet of Q400s and use the commuter slots to really build up the reach of LGB and add feed to the current flights. That would put them at 55+ flights per day. If Porter is successful using the Qs, I bet B6 could be too.

Oliver
Guest

They should move to….

Palmdale!

;)

Anthony
Member

I fly Jet Blue *because of* LGB; the airport is a pleasure to use (compare LAX!). Also, I’ve had a much easier time getting a low fare on B6 than on SWA, when not buying the ticket weeks ahead of time.
That said, a glance at the B6 route map will show that the intra-west-coast service is a pretty small piece of their operation. With issues like future service to Europe now on management’s plate, and the hassles with city government, why wouldn’t they consider folding up the LGB operation and redeploying those aircraft in their core region?

Spirit FF
Member

Keep in mind, if B6 discontinues LGB (as a focus city – I believe they would keep AUS, LAS, SLC, JFK, BOS, FLL), think about how it would impact the other cities, such as OAK, SMF, SFO, etc? That’s something B6 also needs to think about.

You better hope B6 doesn’t pull the PDX or SEA service. Load factors have consistently in the 90’s. Let’s be real AS is watching this. If B6 discontinues PDX and SEA, AS will NEVER return to LGB. Of course, WN may add if they get the slots.

southflniceguy
Member

Why both just wait for the next recession caused by a war that drives up oil prices and buy Alaska who way overpaid for Virgin and can’t be in the best shape to take that hit. Remember Warren Buffet didn’t invest in Goldman Sachs until the world was almost ending… Before that he just WAITED

La Vonne
Guest

Saying that the city council refused “to even entertain JetBlue’s request for a customs facility to fly to Latin America” is demonstrably FALSE and puts all your other statements under a blanket of suspicion.

D8Rez
Guest

Not really. The council made motions like they cared but really the decision was known as soon as B6 made the request.

Pete Mitchellson
Guest
JetBlue just needs to fly during the hours of 7AM to 10 PM. Why is that so difficult to grasp. The neighbors want to sleep. If we can’t fly anytime we want, then we are leaving… If they are on the waiting list for John Wayne SNA, they will have a bigger issue down here and will get kicked out. They just kick people out for flying outside curfew, many private aircraft are on their ban list for a few flights late at night, and they get banned for a couple of years… Reminds me of the kid that brings… Read more »
Brady
Member

There is a simple solution for Jetblue in LGB. As owners of 35/50 slots, a reduction immediately in capacity by replacing Airbus flying by E-190 flying will effectively reduce seats by 1/3. The daunting reality of LGB losing this revenue for say a year, may get the city council to reconsider the customs facility. Jetblue has been too accommodating, it’s time to quit being Mr. Nice Guy and put the hurt on the revenue source for the airport.

James
Member
So 2 questions: I’m based in Las Vegas, and I fly back to BOS and/or JFK quite often as my folks/friends/family are located in Western MA and Northeastern CT i.e. about equi-distant. JetBlue is starting a Mint route from LAS to JFK in Nov. 2017 (I’m flying it for Turkey Day) and they say they’re going to add a Mint route from LAS to BOS too. Is this a sign that LAS is becoming a bit of a focus city for JetBlue? If pulling out of LGB is a real possibility, could a decision like that negatively affect the new… Read more »
Howard Miller
Member
Agree 100% with Cranky Flier; if LGB is doing everything possible to push jetBlue away, instead of valuing it for the contributions it offers for local job creation, either directly, or as a ripple effect on the local economy, then the airline should call it a day. Sure, Southwest will likely step in, but doubtful they’d add the transcons jetBlue had, and a nonstop link to both NYC (the nation’s largest market) and the connecting options to jetBlue’s extensive roster of international partners at JFK. Having lost out on the bidding war for Virgin America to Alaska, maybe jetBlue would… Read more »
Anthony
Member

Agree about the potential of an AS/B6 partnership… I have been saying the same…both would benefit, but B6 especially so, since they lack a domestic FF partner.

Ignacio Ruiz
Guest

I can’t stand Southwest Airlines. I fly to Kansas City 3 to 4 times a year, but I have to take swa because jet blue service MCI…it took 12 hours to get there, going and coming…please stay, I take you to NYC 3 times a year…

Don
Guest

Join the discussion

DaninMCI
Guest
JetBlue is the Alaska of the East coast. If I was JetBlue I’d keep West coast on the map but I would focus on building out the middle of the country. They are leaving so much on the table from areas in the Midwest that would beg them to land planes in the middle of the night if needed. Places like STL, MCI, etc. Might even give them free slots and space. Next I’d build out Caribbean, some airports in Canada and before I’d think Hawaii id look at TATL with Real airplanes, not A320 NEO/Max or 737 flying gas… Read more »
captoza
Guest

There’s always STL……… Plenty of Gates. :-)

But then again maybe not….

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