JetBlue has been hemming and hawing about going to Europe for a long time now, but it was only this month that it was made official…ish. JetBlue will go to Europe in a couple of years, even though details are scarce on what exactly that will entail. I’ve seen many people trash this decision, suggesting that no low-cost carrier can make Transatlantic flying work, but this is different. This is the first Transatlantic low-fare airline in recent memory with an actual feasible strategy, and that strategy has nothing to do with Europe. It has everything to do with Boston and New York.
All we know so far is that JetBlue will convert some of its Airbus A321neo orders into A321LR aircraft, and those airplanes will be used to fly to Europe. This won’t happen until 2021, but that didn’t stop JetBlue from announcing its first routes over the Pond. I was personally hoping for France just for the obvious re-branding opportunities.
But alas, initial service will be the more obvious option from both New York/JFK and Boston over to London. Which airport? No clue. Delta is obviously betting on Gatwick, and that’s probably the most likely outcome unless JetBlue decides to pony up for Heathrow slots.
So far, that’s about all we know which is rather annoying. JetBlue is treating this like Southwest treated Hawai’i. It seems to be stringing people along, teasing for years, before actually flying an airplane. But as with Southwest and Hawai’i, this is a big deal for the employees of JetBlue. JetBlue probably thinks that it should talk it up and rally the troops, but I’d rather just see the team keep their heads down and make sure this works when the routes are finally launched. Making it work won’t be easy.
I’ve long been skeptical of low-cost, long-haul flying. The old model for that just hasn’t worked as we can tell from the graveyard of failures. But this is something completely different for a few reasons, and I’m actually bullish on it.
Mint Matters
The problem with low-cost carriers is they try to compete on long-haul flights with coach seats. But for much of the year, the legacy airlines fly their airplanes over the Atlantic with cheap fares in the back just to keep them full. It’s incredibly hard to compete with that, especially when the legacies have a premium cabin with absurdly high fares to pay for the entire flight. Those coach travelers are gravy outside of summer. The low-cost carriers don’t get low-cost fuel, and they just can’t beat the legacies at their own game. That’s the back of the bus problem that has caused problems for everyone who has tried to enter the market. It’s also not where JetBlue’s big opportunity lies.
While coach fares are dirt cheap, business class fares are not. Boston to London is only about 500 miles further than Boston to San Francisco, but the fares in the front cabin are a whole lot higher, and that was the case even before JetBlue entered the transcon market and brought fares down there.
JetBlue will roll out a new Mint configuration for this service, and I imagine it will have a lot of seats. If JetBlue can sell those at a discount over what’s in the market today, it will do just fine. The coach seats in the back will be important and helpful to overall profitability, but that won’t be where the pressure is. If I were the legacies, this would scare me a whole lot more than something like Norwegian and its downmarket options. JetBlue is actually competing for something far more valuable.
An Actual Customer Base
But even just having a premium cabin doesn’t solve the problem. Remember Eos? It flew premium-only aircraft from New York to London/Stansted, but it failed. It offered a great service at a low price, but there was a problem. (Ok, it had several problems, but I’m just focusing on one.) It didn’t have the loyalty or the customer base to help fill those airplanes. The legacies came in and made sure their corporate contracts didn’t defect. Then American added flights into Stansted and made fares cheap. Eos just couldn’t pry people away without an existing, loyal customer base.
That’s something JetBlue already has in both Boston and New York. It’s already making money (not enough, but it is) flying people elsewhere from those cities. So why couldn’t it do the same on flights to London? It can. This has nothing to do with London itself. This has to do with where people want to fly from New York and Boston. I think this quote from CEO Robin Hayes is telling.
London is the largest metro area JetBlue doesn’t yet serve from both Boston and New York…
Look at Boston and New York, and then look where people want to fly. JetBlue should be serving the needs of its customers, and London is just another dot on the map. JetBlue’s network also provides some insurance. While JetBlue hates to rely on connections in general, if the local markets turn to a price war, the airline will be able to survive off connections from all the other cities it serves in the US. While Delta and others might be ok with opening up a war in one city, they aren’t going to want to fight that battle all over the US in the front cabin.
If that’s the case, and there is real opportunity here, then what took JetBlue so long? Well, it was just too focused on Long Beach. Just kidding. It’s really all about the airplane.
The A321 Was Key
JetBlue can’t fly the original generation A320 series or the Embraer 190s across the Pond. It can’t even fly the A321neos reliably, but the A321LR solves that problem and it just went into service for the first time. Things get even more interesting when the A220 arrives on the scene and it can serve even smaller airports. But the narrowbody range was the constraint.
JetBlue didn’t want to branch out into widebodies. That creates a ton of seats to fill, adds complexity, and just generally makes life a whole lot harder. But with this narrowbody, there is very little complexity. Sure there are complexities with flying to Europe, but JetBlue already flies internationally extensively. This shouldn’t be a huge jump operationally.
That’s not to say that a widebody won’t come at some point in the future, but it’s a big risk to take. With the A321LR, JetBlue can go into the market with an excellent product, very low costs, and a strategic advantage in Boston and New York.
JetBlue does a lot of things that confuse me, including continuing to burn money hunting for a West Coast strategy, but this move doesn’t seem like a stretch at all. It’s just another dot on the map to help make sure the people of Boston and New York can get where they need to go. I just wish they would stop talking about it for a couple of years.
40 comments on “In Support of JetBlue’s European Decision”
With this strategy, LGW should be just as useful as LHR.
Not if they’re pursuing the premium cabin business travelers.
MANY people in London find LGW just as convenient as LHR, depending on their location in the London metro area. I think the key is where do the US originating pax want to go. LHR of course but they may not be as familiar with the London airport access as those in the UK are.
Agreed. JetBlue can compete on price all they want, but for the premium cabin it’s frequency that will make the difference and I can’t see JetBlue being able to purchase/ obtain the necessary slots at LHR, especially at peak times.
Having flown in LGW and LHR, I’ll take LGW anytime I visit London. Gatwick is quicker to navigate and shorter immigration queues compared to Heathrow.
I agree that it is a smart decision for JetBlue to fly to London because of their Mint product. Mint will be the key to success for them on these routes. I just hope they have not underestimated the ETOPS timeline like Allegiant and Southwest with Hawaii. Eos had the benefit of starting service with mostly ETOPS experienced pilots on the north Atlantic routes, and maintenance and dispatch also familair with ETOPS so they were able to obtain ETOPS quickly. Eos was also able to operate for a few months without ETOPS due to the range and light loads on the 757’s. Two years should be enough, but it took Allegiant and Southwest a long time…
Doesn’t B6 already fly ETOPS in the Caribbean?
None of the Caribbean flights are ETOPs nor are they required to be.
They’ve started ETOPS process already, before the announcement. They should have plenty of time.
“JetBlue’s network also provides some insurance. While JetBlue hates to rely on connections in general, if the local markets turn to a price war, the airline will be able to survive off connections from all the other cities it serves in the US.”
According to their 2018 shareholder letter, B6 is 92% local (for comparison, WN is 77%). Talk about hating connections!
So DL will fight like hell out of BOS and JFK, happily backfilling 50% more valuable connecting traffic while B6 takes the local cheap stuff, maybe picking up 10% connecting backfill.
The problem is that B6 can’t operate a Mint heavy aircraft at lower unit costs than the legacy airlines’ widebody aircraft (including new generation aircraft) and the legacy airlines will offer multiples more seats on a combined basis in all cabins than the legacies on both sides of the Atlantic.
Having a customer base and a large market doesn’t matter if a company can’t serve a market with better financials than the carriers that are already in the market – and that is precisely where B6 is.
The best B6 can hope for is that they can carve out a little corner of the market for themselves and the legacies will be careful not to crush them – but that doesn’t mean B6 will make money doing so.
B6 just reported its first quarter 2019 financials and they had low single digit profitability and expect comparable to slightly better results last year for the 2nd quarter – and yet they lost money in the 2nd quarter of 2018.
B6 will undoubtedly succeed operationally at starting Europe service -and yet, like Norwegian, they will become financially weaker and weaker in the process. At the same time, US carriers will continue to grow in B6′ key domestic markets in large part because business passengers want on-time airline service and B6 ranks at the bottom of the US airline industry in that regard and the company is unwilling to invest in the additional resources to fix that problem.
Europe for B6 will be the classic reach for a cookie by a starving person while passing over the roast beef and potatoes that B6 needs in order to stay alive.
Except that unit cost is just one of very many factors in profitability. If that were true, everyone would just be using 777s and A380s as they have the lowest unit cost per seat. The A321LR is almost the same size as the 757-200s that Delta and United both use extensively on transatlantic flights (about 150 economy + 20 business) and better efficiency so unit costs should be comparable to that if not lower.
There is also no reason to think that JetBlue is abandoning the doemstic US market or not trying to improving their performance. That is pretty unrelated to starting Europe flights. And if it fails, then in a year or two (or even in the low season) they can simply bring the new aircraft back to the US to fly alongside all the regular A321s. Norwegian has no such option.
UA and DL aren’t flying the 757s to London, they go to Barcelona, Edinburgh and poto. They fly widebodies to London, lots of them. And the unit cost to London will therefore be much lower for DL and UA.
Until recently United did fly multiple 757s to London and did just fine. I don’t know the CASM numbers (do you? You should if you are making such claims about unit costs) but if a 757 can fly transatlantic there’s no reason an A321LR can’t.
Even if DL and UA have slightly lower unit costs, those aircraft would almost always have lower average unit revenue, either from not flying as full or having a lower average fare.
@jason h
first of all, it is grossly naïve to think that B6 can start a major strategic effort and then just walk away if it doesn’t work out the way they think. If Europe doesn’t work, B6 will have lost huge amounts of money.
second, the A380 and 777 are not the lowest CASM aircraft, esp. on 3500-4000 mile transatlantic flights. But B6′ transatlantic competitors operate or will operate new generation A330s, B787s and other aircraft which will provide CASM advantages. When competing on the same route with the same fare structure, CASM does matter.
B6′ RASM performance on its current network is weak. They don’t provide RASM guidance beyond the current (now 2nd quarter) but major parts of B6’s network will face significantly increased capacity and new competition in the 3rd quarter. They are simply trading one challenging region of their network for another and then having to revise their guidance down. It has happened often.
A year after they start service, the costs associated with that strategic effort (however you want to measure it) is a sunk cost regardless, and so they don’t have to keep bleeding money by operating those routes if they do lose money. It would not be good, but at least it is an option. Norwegian has no such option, so they have to keep running routes that are unprofitable or only slightly profitable when they really should walk away. JetBlue would have the flexibility to reduce flights in the low season or if overall air travel demand decreases, which is when high operating costs would hurt the most.
I don’t know any of the CASM numbers, but there’s no reason to think that the 321LR will have poor CASM. BA is flying mostly 777s and 747s, and UA and DL are putting their newer aircraft on longer routes where cost matters even more (transpacific) rather than London and shorter flights.
As for RASM and domestic competition, that definitely is an issue that they need to worry about, and they probably are already are thinking about it. But there’s no reason that adding transatlantic flights precludes running a good domestic operation, and when competitors add flights simply piling more capacity of your own isn’t necessarily the solution.
LHR flights have lower load factors than most other transatlantic markets. That is part of the reason United used 757s – but they also lost premium cabin seats in the process. They then put 767s on the route to improve the economics but decided to modify some of their 767s with an even larger premium cabin – with a smaller coach cabin, essentially doing what JB is doing on a narrowbody – but UA is doing it on a widebody.
The CASM on either the B6 or UA proposal will be higher than for a standard configured aircraft including the A330s or B787s or their sister models.
Remember we are talking about a 2 year lead time for B6 to start Europe service; airlines will replace aircraft and add new generation models, esp. in markets where it makes sense to do so.
The challenge for B6 is that they are trying to cut the fares in order to attract customers from legacy airlines but do so with a higher CASM product. The reason why people doubt it can be done is precisely because B6 is proposing a higher CASM but lower RASM alternative to existing legacy flights.
And if B6 doesn’t get into LHR, the revenue projections change significantly. No other London airport delivers the premium revenue like LHR. And if they do get into LHR, they will likely have to pay to play which means the slot costs have to be added to their total costs. Of course, they want to be given slots for free – but the chances of that happens are slim to none; many other airlines would have succeeded in getting into LHR if the argument was simply that the high fare legacy carriers controlled too much of the market already.
As for the development costs, those are minimal compared to the ongoing operating costs. If Europe doesn’t work, it won’t be because of the costs it took to get ETOPS and install new seats. Their success or failure to Europe will depend on whether they can get a high enough fare relative to their costs.
B6 won’t have a large enough operation that they can significantly scale back without losing the market presence they need to develop the market. In the dead of winter when there are very low airfares leaving Europe, including discounted business class seats, B6 will simply have to endure the losses. Airlines like AA, BA, DL and VS which operate multiple flights per day can cut a flight or two out of each of BOS and LHR and still have a very robust schedule while B6 won’t.
Again, things don’t work that way. Right now, they are thriving on transcon market with mint when the legacies are loosing money. Legacies are generating far higher fares for TATL. They are going to cut fares for everyone on BOS/JFK-LON. But even at those lower fares, it will still be a lot higher than transcon fares for basically 20% longer in distance (BOS-LON vs BOS-SFO). The TATL J fares and O/W Y fares are obscene. They will still have cost advantage due to their general cost advantage from having 2 fleet types, no alliance obligations, no lounge networks, pension and such. And they will be able to generate higher RASM, since they don’t have many cheap seats to sell. It will be a lot easier for B6 to sell 100 Y seat per flight vs DL having to sell 260 Y seat per flight. B6 will be able to sell it’s J seat at a 20% discount and still get higher rasm over all. Do the math.
The only thing you got right is that LHR slots will help them a lot. There is at least 3 remedial slots that DL has right now which I think B6 should be able to pick up. There is the proposal for 25000 extra slots at LHR from end of last year and their ongoing efforts to get slots from complaining to gov’t agencies. Maybe they will get it. Maybe they won’t. Until everything plays out, it’s presumptuous to say they can’t get into LHR.
And no, there are no other airlines succeeding into getting in on BOS/JFK-LHR complaining to gov’t, because there are no other US LCCs that have tried it. And there are no other airlines with proven track record of lowering fares on premium routes as B6 have done in the US transcon markets.
@FC
let me know when JBLU gets free slots to LHR given to it and more significantly from Delta. In case you missed it, those slots were time restricted and were related to the AA-BA joint venture. You might also verify your facts about where you think those slots are being used – but I’ll give you a little hint that Delta’s cancellation of PHL-LHR was not really about a lack of desire to compete in the PHL transatlantic market any more.
B6 is simply not going to have superior economics by using a premium heavy narrowbody aircraft on which they will discount the fares because legacy carrier fares are too high. B6 can cling to that notion but the financial results will be apparent in time. Someone above correctly said that B6′ transatlantic aspirations will be their suicide. They aren’t going to just waltz into the market and capture a corner of the market and pull back when it doesn’t work.
You are free to come to a different conclusion but economics and not blind loyalty will be the deciding factor regarding B6′ success or failure to Europe.
To give you an idea on casm most mainline narrow bodies are around 13-15 cents on a legacy pay scale generally, while wid bodies are in the 5-7 cents casm range on those same pay scales. Besides most of that business class lift in New York is tied up by corporate contracts and B6 will have less premium seats in total then a single British airways 747 or 777. So their ability to control pricing is minimal.
How true! The history books are filled will ‘low cost’ failures from Laker to PeopleExpress. Also, let’s not forget the charter carriers in the 80s, like Transamerica, Capitol, World, etc!
I’d like to know what Cranky is smoking, but hey, he lives in California! B6 pretty much announced their suicide with London.
You remind me of someone on a.net. B6 lost most in Q2 of 2018 due to a one time expense related to A220 purchase. They will do just fine in Q2 of 2019. Probably be middle of the pack domestically in margins as they normally do.
You grossly underestimate the pricing power of B6 out of BOS/JFK. B6 is not the low fare carrier in any of the mint markets that it’s in. That has allowed it to be the yield leader on BOS-LAX even with its miniscule presence at LAX. This has allowed it to have far higher fare than DL and AS on BOS-SFO and just 10% under UA on a route that UA depends on a lot of connection traffic to fill the cabin. Again, it has minicule presence at SFO. It’s far and away the most profit airline on BOS-LAX/SFO due to the low cost of mint. What they have managed to do is move the fares of the market down by a lot, so all of their competitors are loosing serious money at those yields.
Mint works because it’s a bare bone version of premium travel. Not adding fleet complexity keeps the cost down. Not having their own lounges, alliance partnerships and special ground services keep their cost down. All of this allows mint A321s to only have 6% higher unit cost than A320s. And that’s on top of the 20% unit cost they already have over legacies on similarly gauged aircraft. They will have the same advantages going across the ocean.
Since they will have a more premium heavy mint, the costs will be a little higher than now (maybe 30 seat J cabin will probably have 10% higher cost than 16 J seat), but they will have fewer cheap seat to sell and more premium cabin, which has plenty of demand on JFK/BOS-LHR. There will no shortage of people in NYC and Boston willing to pay < $3000 R/T to fly in mint across the pond. And if you have a hard time believing that, then you haven't talk to enough people here.
Of all the carriers, DL should be concerned on BOS-LON. It already has trouble filling BOS-LHR flights and now they are adding an additional flight. It has no dominant partner on UK side and is probably at least 3rd in pricing power at BOS. The dynamics of BOS-LON will be like BOS-SFO where B6 gets most of BOS point of sale, another legacy (in this case AA/BA JV) dominate LON point of sale and DL is left with a small slice of BOS/LON point of sale. Given DL's cost, that's a terrible proposition.
Let’s set a few things very clear.
Mint has been a great product for B6 because it allowed them to get some of the premium revenues that legacy carriers have long obtained in longer haul domestic flights. When you compare WN average fares on 3+ hour flights to the legacies, the legacies have ALWAYS had a revenue premium on longer flights just because there are always passengers who are willing to pay more for more comfort on a longer flight. WN’s revenue model has left that revenue on the table. JetBlue figured that out and built a product to capture that but let’s not act like they discovered something that legacy airlines never understood. Legacy airlines offered premium seating on some of their transcon flights long before B6 came along. Virgin America, not JetBlue introduced a premium transcon product – it just happened to be a recliner product – but it was priced at a discount. B6 simply chose to put a lie flat product on transcons and price it at discount but Mint was hardly revolutionary but rather a combination of existing industry concepts.
Further, B6 is NOT the average fare leader in the BOS-SFO market according to DOT data; United is with about a 10% premium over B6. B6 and DL have nearly identical average fares in the BOS-LAX market with B6 just over 1% higher. DL has higher average fares in both the BOS-LAS and BOS-SEA market.
The reason why B6 has high average fares from Boston is because they have served more markets from BOS than any other carrier and have developed a strong customer base. That principle of market strength is no different than why legacy carriers get higher average fares in their hubs. But let’s also be clear that DL’s growth in Boston is challenging B6 in many markets and DL is indeed getting equal or higher average fares in its newly added domestic markets within a few quarters. In contrast, B6 trails DL significantly (by 20% plus) in its average fares to DL hub markets. And more significantly, in JFK, which is a much more established hub for AA, B6 and DL, B6 trails AA and/or DL in many more markets. The reason why B6 mgmt. is in panic mode is because they told the world for years that Boston was their most profitable hub, a competitor came to challenge their dominance, and their average fares in Boston are falling so that the same average fare differential is setting up in Boston as exists at JFK. Do you or B6 realistically expect that competitors won’t come when you tout how profitable a hub is?
And Delta gets the highest average fares from Boston due in part to its European network – which is only growing and will be multiples of times larger than B6 before B6’ first transatlantic flight takes off with revenue passengers. You can’t logically tout B6’ premium revenue in the Boston transcon markets and exclude DL’s European flights that provide lots of revenue and a much larger network.
And that whole reality matters a great deal in B6’ plans to serve Europe. They plan to use a higher CASM aircraft than legacy carrier new generation widebody aircraft, undercut legacy carrier fares (because how else would you attract customers), and still not offer many of the amenities like lounges that matter to premium customers.
As hard as it is for you to accept, B6’ profitability for the past decade plus was heavily influenced by the weakness of the legacy carriers and their unwillingness to challenge B6 in Boston. Now that B6 is having to pay higher salaries and pay for more and more heavy aircraft maintenance just like legacy carriers, their profitability has fallen. B6 now wants to enter Europe with far less financial strength than they have had in the past and as legacy carriers are far stronger. And let’s not forget that B6 has announced its intention to serve Europe 2 years in advance! The legacy carriers on both sides of the Atlantic have more than enough time to prepare – and again, as much as you want to believe otherwise, B6 will compete to Europe not just against DL but against a half dozen legacy carriers – plus Norwegian and other low cost carriers.
B6 is free to expand to Europe; that is what the free market is about. But let’s be very clear and honest about what they have accomplished that brings them to this place in time and also what other carriers have in preparation for B6’ European expansion. The legacy carriers are no longer the weaklings that that they were in the past and Mint was much more of a financial success for B6 while Mint simply has not delivered industry -leading revenue in the markets where it has been deployed.
Mint is revolutionary due to its cost, not the product itself. You fundamentally don’t seem to understand what it’s strength is. It allows them to operate premium flights without the cost attached with it. That’s what has allowed them to generate such great margins on JFK-LAX, make money on BOS-SFO/LAX when everyone else looses money and gain against AA out of FLL. It so far has already pushed DL off MIA-LAX, DL off D1 on BOS-SFO, AS to cut FLL-SFO, UA to cut MIA-SFO. And at the way AA is going, it will be gone from JFK-SEA/SAN pretty soon. All of this happened due to mint’s entrance or mint expansion in those markets.
As I said clearly, B6 is 10% under UA for BOS-SFO. Not bad considering how much connection traffic UA gets at SFO. DL couldn’t compete and dropped D1 on there. That’s a fact. and out of BOS-LAX, B6 is the yield leader (factor in both fare + LF) despite legacies having mega hubs at LAX with far more connection options. As for BOS-LAS, DL didn’t run it for the full quarter and only half of the B6 flights there has mint. Let’s see the yields after actually running it for a full quarter.
As for the other part, you seem to dismiss the fact that DL runs 70/76 seat RJ against mainline on most of the new routes out of BOS and still get significantly lower yields than B6 mainline. It’s great to mention fares without thinking about CASM. By any metric, B6 has gained market share and pricing power at BOS since DL buildup has started. Go watch the most recent B6 investor day presentation. The gap between B6 yield at BOS and legacy competitor has shrunk to almost nothing over the past 2 years. Now unfortunately, BOS has become a really low yielding environment due to DL dumping a lot of capacity in there in a short time. The data would indicate B6 has gained pricing power over time. And they are continuing to build up their BOS operation. They will be 185 to 190 flights by March/April of next year. And that’s before any new destination announcement. They are on their way to about 220 flights with the current gate resources they have. It takes time and money to build up hub. And that’s what they have at BOS right now. This expansion + TATL flights will allow them to keeping increasing their POS at BOS.
Unlike DL, B6 actually makes a lot of money at JFK. But since you don’t seem to think about what B6 operates vs DL on some of these routes, you continue to miss the point. There are very few routes B6 does not at least break even on out of JFK and most of them are run for political reasons. DL relies on its fortress hubs at ATL/DTW/MSP/SLC to maintain its market share battles around the country. I have a full spreadsheet of every domestic route they offer out of JFK.
As for your continued assertion of their high CASM aircraft, you seem to continue to forget their lower cost from not having multiple fleet types, lounge, alliance partners and legacy costs. Let’s do some rough calculations. We know from HA that A330 has at least twice the total operating cost of A321NEO. So let’s say operating A321NEO’s cost is 100 and A330 is 200+ for the same airline. Now consider B6 has a system wide 20% cost advantage over DL. So if a DL A330 would have operating cost of around 250 if we use B6 A321NEO as baseline of 100.
A 140 seat A321LR (28 J seat + 112 Y) would have cost about 0.714 per seat
A 293 seat A332 for DL would have cost of about 0.853
In this scenario, B6 would still have a cost advantage and I haven’t even penalized DL A330 for the cost of having to provide lounge access for DL elites + J cabin passengers.
Let’s look at rasm. If we go by assumption that DL can get 20% higher yield than B6 in J cabin per seat and same yield in Y cabin per seat. I actually highly doubt the second part, since B6 will have to fill much fewer Y seats and DL would be filling some of that with lower yielding connection traffic. But let’s just go with that. Let’s say J cabin fare is 4 times that of Y cabin fare. So if Y fare is baseline 100, J fare will be 400.
B6 would be getting ((28 * 400) + 112 * 100) / 140 = 160 per seat
DL would be getting ((34 * 480) + 259 * 100) / 293 = 134.8 per seat
So if you look at the numbers, it’s hard to see how DL can fill a 293 seat A332 with the same yield as a B6 140 seat A321LR.
Feel free to challenge my math here. Please run the numbers rather then continue to state your beliefs.
No, Mint is not revolutionary. Virgin America priced its flights at comparable levels to what B6 charged for Mint. All B6 did was take an A321 and put lie flat seats on it. Other airlines used larger aircraft than the A320 which B6 used for its transcon flights.
You still can’t understand or accept that what was revolutionary for B6′ finances is not necessarily revolutionary for the industry. Mint was simply not revolutionary for the industry even if it was for B6.
No, B6 didn’t push anyone off of any of the routes you note because of Mint. As long as you continue to believe such one-sided, misguided route information and make statements absent any supporting data, no one except you will be convinced. You are the one that sounds like someone on a.net
The rest of your post is nothing more than stabbing at the air without real world data to create an answer that only you can defend. There is real world data about what Delta gets TODAY on its flights to Europe. You are playing slow pitch softball with those numbers while Delta is playing major league baseball.
Have fun with your strawman. The rest of us use and will use real world data to determine what B6 spends to provide service and what kind of fares it actually gets – in real life.
If only the JetBlue/Alaska partnership could materialize. Two quirky carriers with loyal customer bases on either coast. It could help both of them stand up to Southwest and even push legacies around in certain markets. But Alaska still has its hands full dealing with the VX merger and both carriers might not want to share on their coast to coast routes.
I’m not sure how successful JetBlue will be with serving Heathrow, Amsterdam, or CDG because the legacies have the ability to dump capacity and undercut them. However, I think they would be able to succeed serving smaller cities from both NY and Boston since both cities have a lot of people who aren’t always going to London, Amsterdam, or Paris. The seem to have a decent product (never flown them) and they have a loyal customer base in the US’s largest and sixth largest CSA. There would be enough traffic to serve smaller cities without too much legacy competition.
You’d have thought so – but I guess many North Americans still equate London = England; even Stansted and Luton are a stretch of the geographic imagination – Heathrow (and Gatwick, at a push) are London. I wonder if that’s partly why the LHR/LGW-OAK and LHR/LGW-SJO are not as popular – people just can’t get their heads around OAK and SJO not being SFO.
I don’t doubt that some UK regional airports would love more TATL routes – no doubt they might even be semi-profitable on a seasonal basis; I suspect that there wouldn’t be enough JFK/BOS people interested in flying to Manchester or Birmingham on a regular basis.
No big surprise – SJO isn’t even in the same country as SFO :)
I think you mean SJC ;)
Thank you – whatever happened to the edit button…?
Nobody who will pay for mint wants to go to stansted or Luton. Find a way to get an A220 into LCY sand they might be on to something.
The A220 already flies in/out of London City. It has also flown nonstop to the US with a simulated 40 passenger premium cabin load. Bombardier didn’t do that just for show.
Keep in mind that Delta already operates the A220 and could equip it with a premium cabin if it thought there was a chance B6 would do the same. (and they still might do it just because the British Airways A318 can’t do the route nonstop westbound so if DL could pull off a nonstop, they would have an advantage.
Bottom line is the A220 is not an advantage for B6 unless no one else shows an interest in doing the same thing.
It would be an advantage since B6 would still have its nominal cost advantage and pricing power at BOS/JFK. It’s at a disadvantage right now because LHR slot issues.
except that B6 probably DOES NOT have a cost advantage at Boston because half of its flights are operated by E190s which are the most expensive aircraft in the US air carrier fleet on a CASM basis. That is not my opinion but comes directly from DOT filings.
And B6′ system cost advantage is largely driven by its lower paid and more junior workforce. In two years and by the time the E190s are retired, B6 will have employees with 20 plus years of service. Their pilots are already getting pay much closer to legacy carriers while their flight attendants have unionized and the company has to keep throwing pay raises to all of its employees in order to keep more labor groups from unionizing. Add in that B6 is having to spend lots of money on aircraft overhauls that the big boys have been doing for years – because that is what happens when you keep airplanes for years – and B6 will likely have a much smaller cost advantage. You need only look at WN to see how quickly those cost advantages disappear as your workforce becomes more senior.
And most of the costs to operate to Europe have nothin to do with the age of an airline or its employees. International air service is expensive because that is what it takes to make money. The reason why multiple low cost carriers have failed is because they thought they could discount fares and still make money. B6 is simply repackaging a bunch of existing transatlantic airline concepts and thinking they will work just because it is B6 rather than any number of other airlines that used them.
If B6 is right, we’ll know in a couple years. but if they are wrong, as noted above, the foray to Europe could cost B6 its life.
How long have you been sitting on that jetBleu graphic? That’s great.
Jimmy – I haven’t at all. Just came to me, though clearly that is something I should have thought up long ago!
Doesn’t Icelandair already fly BOS – LHR with their standard quick turn at KEF? Their website even says something like “low cost flights to europe.” I know it’s a layover but having done that KEF turn, it’s about as easy as they come for getting into London for cheap….and they have a Saga class to offset the cheap seats. Then there’s the bottom feeders WOW and Norwegian into LGW.
I’m not sure the niche B6 has here other than playing the loyalty game with their existing customer base. Cheap seats are already plentiful. If they don’t get into LHR I’d say this plan is D.O.A. Even if they do does B6 have enough feed to fill the planes as the locals already have too many options.
Transcon JFK/LAX JetBlue offers one of the most robust schedules on any carrier. And their Mint pricing changed the market.
BUT
There are already ~1,000 lie flat or better seats daily flown between NYC and LON
JetBlue is going to run narrow-body planes, even in an elite heavy configuration they are going to need to run 5x daily to even be noticed, and probably 10-15x daily to be truly disruptive they were in the Transcon market. And it’s doubtful they will have enough planes with the range to run that type of schedule for a very long time.
Running x2 daily flights to LGW is going to do virtually nothing from AA/BA and DL/VS. it’s maybe 40-50 Mint seats if they go REALLY elite heavy. So 4-5% increase in premium seating. They’ll take some of the people who would be Premium economy or coach fliers and price them into Mint, and a few of the bargain hunters in J right now. But the people who buy the $10k+ seats want frequency. It’s not about the money it’s about getting on a flight Right NOW.
I don’t understand why more airlines don’t opt for extended or long range options on aircraft for max flexibility.
Is there any resell advantage to the er or lr options?
I know airline margins are some of the tightest on earth but is the extra cost really noticeable over the aircraft lifespan vs the flexibility?
Having a321neo’s and a321LR seems silly and potentially a problem if a major capacity re route becomes necessary.
Patrick – It usually has a negative impact in a couple ways. You can have less space in the belly to make room for more fuel tanks. Occasionally, depending upon the airplane, it may also include changes to the wing to help strengthen the body. Those are great if you need the range, but if not, they do hurt resale value.