One of the biggest questions surrounding JetBlue has been what exactly it was going to do for its West Coast strategy. It was assumed that Virgin America was that strategy, but when Alaska won the acquisition battle, JetBlue was left with its weak-performing Long Beach focus city and a whole lot of questions. Yesterday, the strategy became more clear, at least in Southern California where JetBlue announced several network moves beginning for travel on September 5. I spoke with JetBlue EVP Commercial & Planning Marty St George on Tuesday about the changes.
If I had to summarize these moves, I’d say JetBlue was focusing on its strengths by growing longer-haul flights and targeting the leisure traveler. That’s good news for some but bad news for those who used that higher-frequency business schedule on short-haul routes from Long Beach.
Marty didn’t mince words when noting just how successful transcontinental flying has been for the airline. “Our experience in transcon has been fantastic. You look at other airlines, transcon is a weakness. It’s not a weakness for us; it’s an area of strength.”
This, of course, includes the outstanding Mint premium cabin offering from LAX, but that’s not what’s growing. Here’s what gets added:
- JetBlue returns to Ontario the same way it left 10 years ago, with one daily redeye to New York/JFK.
- Burbank gets an redeye to Boston (with an incredibly early 8:08pm departure and 4:40am arrival)
- Burbank also gets a daytime second daily flight to New York/JFK
- Long Beach gets a daytime second daily flight to Boston
All of these are on A320s without Mint, though Palm Springs (not mentioned above) will see its seasonal service have a Mint cabin during the peak holiday season.
Refocusing on Leisure
Last year, JetBlue mentioned in an internal note that it was looking to expand flying in leisure destinations, and that Long Beach would benefit from that. Sure enough, that’s happening. This winter, JetBlue will start twice weekly flights from Long Beach to Steamboat Springs/Hayden in Colorado. (Ft Lauderdale and Boston will also get Steamboat flights.) There will also be twice weekly flights between Long Beach and Bozeman in Montana.
I consider this to be an interesting experiment, but I’m skeptical. JetBlue’s last effort to run seasonal service from Long Beach was the summer nonstop to Anchorage, but, as Marty explained, when it was good, it was great. When it wasn’t, well, it was pretty bad. That, of course, was daily in the summer so it’s different. This sub-daily kind of flying to winter destinations should fare better.
Those moves make up pretty much all the good news for Long Beach… unless you were expecting JetBlue to leave entirely. In that case, there’s more good news. The airline isn’t walking away from Long Beach, but it is shrinking.
Long Beach Goes Back to Where It Was
Before Southwest got aggressive about Long Beach, JetBlue was running an operation in the low to mid-20s in terms of daily flights, and as Marty says, it was “very profitable.” JetBlue ramped up to try to protect its position when Southwest arrived, and that meant running a more business-oriented schedule with higher frequency in shorter markets until it could get a customs facility approved. That, as we all know, was shot down thanks to short-sighted council-members buckling to uninformed public pressure.
As Marty explained, when it comes to international flying from the LA area, “our opportunity was at Long Beach. We had a nice little feeder opportunity” that would go into those near-Latin American markets, but when the customs facility was taken off the table, that went up in a puff of smoke. With no feed, keeping this business schedule wasn’t an option, and so JetBlue has now shifted back to where it was a few years ago. It peaked recently at 35 departures a day, but the airline dropped one of those slots so Hawaiian could pick it up. Now it will drop down even further to only 23 daily departures as follows:
It looks like that third Salt Lake flight will run on the 3 days that Bozeman and Steamboat don’t, so that it’s a consistent 23 flights every day. To me, this looks like a schedule that makes a whole lot more sense. The only wildcard is what happens with those newly-open 11 slots.
There are three airlines on the waitlist in Long Beach today: Delta, Hawaiian, and Southwest. I have no idea why Delta would be interested unless it just felt like blocking others from using them. (I did not receive a response to my request.) And Hawaiian, well, I’m thinking Hawaiian is just on the waitlist because new entrants are entitled to two slots. Hawaiian was unable to confirm whether it had interest or not by the time I published this, but I’d be surprised if it did. That leaves Southwest which gave me this statement:
“As local Long Beach Customers know, we’ve always looked for ways to benefit them by adding low fare service when slots become available,” said Adam Decaire, Southwest Airlines Managing Director of Network Planning. “Southwest absolutely would analyze any opportunity to respond to obvious demand for our service in the LA Basin.”
I’d expect Southwest would be the only airline that would have a real interest from that list. Will it use those slots to further hurt JetBlue?
Marty didn’t seem too worried. And really, looking at the schedule, I can understand why. JetBlue has increased its long-haul flying and added new niche markets where you won’t see Southwest. Were I a betting man, I’d say Southwest would put in Las Vegas and Denver on a more regular schedule than it has today. (It serves them irregularly when slots controlled by other airlines go unused.) We might see a San Jose or Phoenix in there too to help round things out regionally. But JetBlue will now have more limited exposure in those markets. And with such low frequency in the ones that remain competitive, JetBlue still feels confident that it’ll attract the leisure travelers that it considers its bread-and-butter.
Long Beach should become more profitable, but this could still be the beginning of the end if routes fail to perform.
A Four Airport Strategy
This strategy does take Long Beach away from being the sole real focus in the LA Basin and instead spreads the wealth around. At LAX, JetBlue is gate-constrained and can’t grow. It focuses on its long-haul flights with Mint in that market.
In Burbank, this is just adding another spoke to the Boston focus city and beefing up JFK as well. There is the unrelated announcement that JetBlue would be codesharing on JetSuite X flights out of Burbank, but that seems more like a side note. There’s no connectivity in Burbank. This may appeal to some travelers but it doesn’t seem to be a core part of the strategy. (Marty didn’t have much to say about it when I asked.)
Ontario is something of a wildcard. Since JetBlue last flew there in 2008, control of the airport has gone back to Ontario from LA World Airports (the entity that runs LAX). The cost to operate there has plummeted, and airport management has become extremely proactive. Further, Marty seemed bullish about the area in general saying that “demand is very strong.” Give credit to Ontario’s CEO Mark Thorpe. “He did a good job of convincing us,” according to Marty. If this works, there could be more growth there.
Down in Long Beach, the focus city remains, which is honestly something of a surprise. But it is now skewing more to non-Southwest competitive markets. And even in the Southwest-competitive markets, JetBlue will stick to its leisure schedule.
You might be wondering about a 5th airport – Orange County. That would be attractive for transcon flying, but it’s not easy getting an Airbus out of there with a usable payload thanks to short runways. That’s not really a great option at this point.
Overall, I think there’s a lot to like here. JetBlue doesn’t feel the need to be everything to everyone. It wants to focus as much as possible on routes where its product stands out, and that means the longer haul, the better. It’s also trying some interesting experiments to see what kind of leisure markets will respond to having JetBlue service. Unprofitable routes get trimmed, and JetBlue finds itself in a better place.
I still wonder if some day it makes sense to make a real run at Ontario as a true focus city. I don’t think we’re quite there yet, but then again, Long Beach has been nothing but trouble for the airline. For now, this seems like a smart strategy that leverages the airline’s strengths. But I expect that there could be more change if things to don’t perform as expected.