This week’s featured link:
JetSuite Plans Big Expansion With New Investments From Qatar Airways And JetBlue – Forbes
I continue to scratch my head over the announcement that Qatar Airways will put money into JetSuite, and JetBlue will up its investment. I totally get it from JetSuite’s side. It’s trying to expand and it’s not profitable, so it wants more money to fuel growth. But what is Qatar going to get out of this? And why is JetBlue doubling down and putting more money into the currently-money-losing venture?
Even if JetSuite is successful, I’m not sure how JetBlue and Qatar expect their core businesses to benefit. Maybe Qatar thinks it can get in JetBlue’s good graces by helping keep JetSuite going so JetBlue doesn’t lose its investment. Maybe it’s all the beginning of some bigger, super secret plan. Or maybe Occam’s razor applies and the simplest explanation is the right one. What is that? JetSuite just caught the eye of Qatar’s CEO and so he put money in, and JetBlue wants to chase its original investment with more so it doesn’t get diluted. It’s just hard to see how this all comes together, so I’m going to stop trying to make sense of it.
Two for the road:
The Evolution of Ontario International Airport – airport business
Curious to learn more about the rise of Ontario here in Southern California? Benet Wilson sat down with CEO Mark Thorpe to learn more about what the airport is doing. Watch out for those cargo carriers. It’s a huge growth opportunity for Ontario, and when they grow, that brings costs down even further for all the other users of the airport.
Prescott Airport could have commercial flights again within weeks – The Daily Courier
When an airline goes belly-up and a small airport loses all service instantly, it’s quite the hardship. Prescott in Arizona, however, seems to have a lot of competition for replacement service. One seems pretty far out there – Advanced Air wants to fly KingAirs from Hawthorne, that little airport you see on the left side on final approach to LAX. That would be odd, to say the least, and a strange use of federal funds.
Offtopic to the links, but what are your thoughts on IAG buying a small stake in Norwegian and starting discussions about a possible buy-out? Considering you’ve written quite a bit on their financial position and expansion.
Jet Suite Xs announcement that they want to grow up to 100 frames and moving to the D/FW area raised eyebrows.
There is a year old article on Skift that says they see JSX as an extention of B6s Mint. He uses the example of JFK-LAS-Concorde CA as an example. Other potentials could be XXX-JFK-Saratoga or XXX-FLL-Exuma island.
Im guessing Qatar sees the same potential by using them to penetrate boutique markets beyond the scope of existing code-shares. That’s fine & good but I’m not sure wealthy people shopping for thoroughbreds in upstate NY & central KY or going skiing at Tahoe will keep the lights on.
The logistics would be challenging. Getting the VIP from the terminal to the FBO and back is the easy, but labor intensive, part of the equation. I’m sure these boutique markets can’t sustain daily flying so there would be allot of empty, or near empty, repo flying. If the chorus of oil analysts are correct then $85-95 p/bl oil will be the new normal. That’s going to hurt.
https://skift.com/2017/05/16/ceo-interview-jetsuite-dreams-of-bringing-a-private-jet-style-experience-to-the-masses/
Eric A – I remember seeing that article. The problem is, as you mention, that JetSuiteX’s primary benefit is that it operates from FBOs. So connecting to a commercial carrier is pretty terrible. Going from Mint to JetSuiteX isn’t as awful, you just have a car to meet people planeside (not cheap, but not an awful experience). But going the other way, you have to dump someone off at a security checkpoint. It’s just clunky. Of course, it could start operating from commercial terminals, but that takes away the one big advantage. I just think this model doesn’t work well with connections to commercial airlines. And even if it does, it’s a very small niche.
Exactly…it’s a razor thin demographic and the competition is NetJets, not UA and UAx.
I heard one wag say that the real B6 interest is using JSx as a farm team for pilots. That may not be too far fetched since B6 is competing for talent from regionals with major partner flow-thru agreements.
Come to think of it I haven’t seen a JetsuiteX ad in the newspaper in a while now, I wonder why?
It’s been an ongoing mystery to me why ONT has struggled for so long… can anyone provide a thumbnail history?
Anthony – Well, it used to have higher costs than LAX. It’s also, geographically, not as close to the primary wealthy population centers as other airports. But things are changing.
Despite the shortcomings of the Port Authority of New York & New Jersey, it makes sense to me to have common control of a region’s major airports. I am not sure it makes sense to have LAX, ONT, BUR, SNA and LGB fighting one another for business.
Competition, in theory should help drive costs down per passenger along with adding aminities for both the passenger and the airlines. Look at what the port authority has done on the other hand, LaGuardia is old and desperately needs a referb, and it’s connection to public transit is shoddy. JFK is maxed out and obviously can’t deal with poor weather. Newark is expensive as all get out when you are a passenger. The port authority has no reason nor desire to fix any of the major issues plaguing these airports as they are the only game in town, and the amount of money they would need to pump in won’t increase their revenues enough to justify it.
Alex Wilcox (JetSuite CEO) is a founding executive of JetBlue. Additionally, there are other close ties between many JetBlue board members and JetSuite executives.
Operationally they can spin it as the only way they can realistically get a presence on the West Coast since LGB doesn’t play nice with airlines