The Cities Where JetBlue Thinks It Needs Spirit to Grow

JetBlue, Mergers/Finance, Spirit

Welcome back my friends to the show that never ends. It’s time to take yet another look at JetBlue’s plans for Spirit.

After yesterday’s look at the JetBlue focus cities it wants to grow further, today it’s time to look at the cities where JetBlue doesn’t have much presence and wants more. As a reminder, I looked at Cirium scheduled seats departing each airport for July 2022. Also, here’s the quote from the acquisition announcement.

The acquisition will increase relevance for JetBlue in certain key focus cities (Fort Lauderdale, Orlando, San Juan, and Los Angeles) as well as Big Four airline hubs (Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami).

Of course, Southwest would likely take great offense to JetBlue saying it has hubs, but, well, it does. So, let’s just tackle these in the order mentioned.

When it comes to Vegas, JetBlue is irrelevant with only 4 destinations (3 of which Spirit also flies). Spirit, however, has grown to be the second largest airline behind the big hub carrier Southwest.

In July, Southwest has 63 destinations from Las Vegas. Spirt overlaps on 29 of those. It and JetBlue have another 10 that Southwest doesn’t serve.

This does get JetBlue more gate space in Las Vegas, but what will it do with it? Spirit and Frontier fueled their growth with low fares, and this is the perfect market for that kind of product. JetBlue may appeal to the fancy folks looking for a better experience, and that works in places like New York and Boston. But at a higher fare, it remains to be seen just how much of the Spirit market can still be served profitably. I imagine the Kansas Cities and Sacramentos of the world will be tough unless JetBlue shifts its model post-merger.

In the Metroplex, JetBlue barely exists at all with only a few flights to Boston and New York/JFK. Spirit is large enough to be neck and neck with Delta for a distant third place, but in terms of flights, it is easily dwarfed by American and Southwest. It does serve 16 destinations from DFW today, mostly bigger cities at 1x daily. Does JetBlue try to maintain breadth here? Or does it aim to consolidate frequency in the most lucrative markets? Either way, it will struggle to be a meaningful competitor to either American or Southwest.

If we move down the road to Houston, we see something similar with JetBlue again just serving Boston and JFK. Spirit has more than that, but United is the big gun instead of American. This market looks very similar to Dallas, and similar decisions will need to be made.

If we head north to Chicago, it’s a more crowded house. Frontier has largely decamped to Midway, leaving Spirit as the ultra low cost operator at O’Hare. That’s a big advantage that it doesn’t have elsewhere. Of course, that’s behind United, American, and Southwest’s new and growing presence at the airport.

With gates at O’Hare at a premium, JetBlue shouldn’t have to worry about a low fare competitor. It can raise fares and potentially make this work. But that also does require the other behemoths in the market letting JetBlue grow without being challenged. That won’t happen, so the question is… will JetBlue be able to carve out a higher fare niche for itself despite intense competition?

Detroit is one of the more interesting airports on this list. The former home of Spirit Airlines, Detroit has very little ULCC presence outside of Spirit itself. JetBlue is not much to speak of, but Southwest is also small. This would seem like a decent opportunity for JetBlue to be the tweener to take traffic away from Delta. Of all the focus cities, I think I like the opportunity here best.

Unlike Detroit, Atlanta has plenty of lower fare competition. There’s the ever-changing, shrinking, and confused Southwest operation there. Then there’s Frontier which is bigger than Spirit in the market already. So what would JetBlue do in a market like this? If Delta is willing to let Detroit be competitive, it’s not going to let that happen in Atlanta. I can only assume that if JetBlue makes a play for Atlanta, it is going to feel the pain.

JetBlue saved the biggest question mark for last. Miami is a market that changed dramatically during the pandemic with many airlines starting and growing service, including JetBlue and Spirit. JetBlue is in there with Boston and JFK but also Newark and Los Angeles. That’s it. But Spirit went into the market in a big way.

We’ve seen Frontier pull down some of its Miami flying and focus elsewhere in recent months. That could be an airport constraint, in which case I’m sure it would love some divestment, or it could just be a commercial decision. JetBlue will already have a mega focus city up the road in Fort Lauderdale, so that reduces the impact from a Miami focus as well. I’m just not sure where this one will fall.

All of these markets have similar traits, but the real question is… where does the new JetBlue fit? In a place like Detroit, there may be actual opportunity, albeit likely not an enormous one. Elsewhere, the water is murkier.

The big caveat here is that we don’t really know what the JetBlue product and positioning will be. If JetBlue changes post-merger despite what it says today, that could change the calculus in a more favorable way.

48 comments on “The Cities Where JetBlue Thinks It Needs Spirit to Grow

  1. For JBLU to get the most utility out of SAVE, it needs to 1. “save” key cities like LAS, ORD as well as DTW & 2. establish a mid-continent focus city such as AUS, MKE or something of that sort. LAS could be interesting as it had two hubs at one time, but is not the best placement as far as connections are concerned. Also in the recent past it’s a hard place to get a fare premium & I don’t know if that has changed.

    1. Thing with AUS is, it’s now a focus city for both WN and AA, with plenty of service from other airlines. B6 has tried serving points without success, and NK has pulled down here due to AA and WN sitting on top of them with rather low fares. And we’re gate constrained at this point during peak times. So a combined B6 would have little ability to grow here. They might have one gate and parts of a second, but ten flights per day does not a hub make.

      MKE would have a better shot, and they have the facilities thanks to Midwest and AirTran. Question is whether a hub fits in B6’s model though. I’m going to guess the answer is no.

      1. When B6 entered AUS years ago, the idea was to turn it into a mid-continent connection hub to send the e190s east and west. AUS was ideal with a young urban culture and many ties to NY and California. They signed a UT sponsorship and tried to market heavily. Unfortunately, JetBlue couldn’t capitalize. Maybe they were too early as AUS boomed after B6 pulled down the experiment with the withdrawal of the e190 from the west coast, but it was right idea that didn’t work.

        I think this is the recurring theme. Many people like JetBlue, but don’t necessarily “love” JetBlue. Their strategy to be in the middle – reasonable fares and reasonable product may fit what customers say they want, but not what they actually choose. Frequent flier elites want first class, need a big route network. Budget fliers complain about Spirit, but ultimately book that $59 fare. Delta may have lost with Song, but their domestic product has been great with wifi and TVs to compete in NY.

        Jetblue acquiring Spirit gives them scale and presence in some key markets, but it is unclear if JetBlue can be successful with their existing product model. If it wasn’t compelling enough to organically grow, not sure what makes them think things will be different. Jetblue isn’t really acquiring NK customers since they are often infrequent price conscious fliers, they are just eliminating one lower fare competitor and hope customers chose them now that they have one less option. LAS is a perfect example — it is a market where Spirit fills planes opportunistically with impulse buying low fares, JetBlue can’t make money doing that with existing seat counts and cost structure.

        I predict Jetblue will add more seats to planes, but may also copy Spirit’s “Big Front Seat” concept domestically for a mint lite product. I wish them success and hope this leads to a future where they are a bigger competitor and have new domestic growth prospects.

      2. Well, a focus city is in fact a hub with a narrower breath of service… correct? Yet SWA has more than a dozen of them from SAN to BWI with three in CA, three in TX & two in MO for example.

    2. We need non service from islip long island to west palm or ft lauderdale. Had non stop for 20 years on southwest and one year on frontier and all flights were full or almost full. They did have some very early flights that were not totally full. 600 am.

        1. they were full for thanksgiving, Christmas, New Years, and spring break. They lost money every other week of the year. Hard to sustain an airport of service for 4 weeks, even if they are very profitable weeks

      1. Just looked at January and there is non-stop from ISP to FLL on weekends, as well as connecting service over BWI every day.

        Looks like the same for TPA. I flew TPA-ISP several times and when searching for flights it always looked to me like the plentiful and cheap connections over BWI limited their ability to get a material fare premium for the non-stop.

    3. I have always wanted to try Jet Blue……problem is their “hub” is in New York which isn’t really on the way to just about anywhere else in the country. To see friends and family in the midwest I would have to fly to JFK and backtrack hundreds of miles. If they would establish a hub someplace like MKE, MEM, or CVG I would love to give them a try.

  2. Looks to me like the plan is to focus on increasing their service at most of the lowest margin, fare sensitive airports in the country. Great plan!

    After a few years, which of these mergers is going to win the Kerry Skeen award for the most egregious evaporation of airline shareholder value, AS buying VX or JetBluIt?

    Ironically everybody’s needs would have been much better served by a JetBlue / Virgin America merger (passengers, employees, shareholders, the Justice Dept, as well as each of the airlines discussed herein). SpirTier would definitely have happened, finally giving the US a ULCC with enough breadth and depth to compete with the big boys a la Ryanair.

    Things would have made MUCH more sense here in Airline Land! Alas it was not to be so we’re left with, well, this giant pile of detritus.

    (Astute observers might have noticed essentially this same comment on yesterday’s post, apologies for the repost but it seemed just as applicable here)

  3. Great stuff as always Cranky! Totally off topic but I can’t help notice Alaska just an end blip on most of the charts. Makes me wonder what their future is going to be if/when this Splue merger goes through. AS seems to have played out their series of growth waves: VX merger/forced mistake, Hawaii routes, Alaska Cruise industry mostly moving to SEA from YVR, Seattle fortress, SAN QX focus city, etc. What will allow them to grow? (Other than pulling a Lav on the 800s for 3 more seats)…Maybe they will always just be a blip on charts outside of PNW.

    1. Alaska does not have a coherent growth strategy because they are trying to replicate the growth of 2010-2015 using largely the same tactics from that era. They are presently decently ‘profitable,’ but, time after time, campaign after campaign, effort after effort, they hit a growth ceiling. That ceiling is that they are constrained by the “fortress SEA” business model *and,* critically, their unique and aberrant position in the industry (trying to somehow be a unicorn in-between ULCCs cost structure and legacy service — a unicorn business model that doesn’t exist for good reasons).

      After bidding on them *six years ago*, AS touted “acquiring our way into growth” with VX, then promptly threw away the cultural/marketing elements, dumped the aircraft and have given up on most of the old VX routes. At some point, shareholders are going to want them to do something other than “defend Seattle at all costs” and “find the next biggest market without a direct flight from SEA.” Much of their supposed “growth” in the last few years has been from increased credit card revenue. (Some folks are calling it “a credit card company with an airline sub-business.”)

      That next step seems likely to me to be “intentional acquisition target,” from which executives would be rewarded at unbelievably lavish levels, though I would be genuinely curious to speculate which airline would be willing to take them on. Many say that JetBlue acquired Spirit to “buy planes and pilots.” Another airline could do the same to Alaska; they have 93 MAXs on order and options for 52 more, along with the rest of the not-that-old 737 fleet.

      Or, they can adapt to the realities of the United States aviation industry and become a far, far lower-cost, low-service carrier. I wouldn’t be surprised to see either one. They *could* try to go all WestJet and attempt to become a higher-service airline with an actual international network but something tells me they’re not keen on throwing away all of the airline’s cash.

      But trying harder to compete for Spirit/JetBlue/Frontier/Southwest passengers than Delta ones? Dumping the jokey “First Class” product? Selling off the Milage Plan business? Flying A220s with QX pilots? Yeah, I could see that, even if it would hilariously cause *actual violent convulsions* from Gig Harbor flight attendants and pilots who view those other airlines as literal trash. It would also become a lot harder to justify buying the opportunity to spend time with sports stars like Russell Wilson, which would undoubtedly be among the most colossal bummers in many executives’ entire lifetimes.

      1. I assumed that the AS/VX merger was all about ensuring B6 didn’t get VX and be able to expand on the West Coast. It was also the best thing that happened to VX.

      2. There is a fallacy in your thinking here. You are comparing JetBlue and Southwest passengers with frontier and spirit passengers.

        These are very different.

        JetBlue is somewhat following the southwest model. They are low cost, but not ultra low cost. They aren’t out here charging for carry-ons and cokes on board.

        The large majority of people who fly spirit or frontier only care about the fare. Nothing else. They don’t care about frequency, service, or anything else.

        And the idea that this strategy has to fail is also wrong headed to me. For your light, there would only be Walmart and Tiffany’s. Or car dealers would only sell cheap little four-door sedans or range rovers. With nothing in between.

        There is certainly room for a middle ground strategy in the aviation industry. What is very much in question is if JetBlue strategy is right to reach that.

        1. Sure, there’s room for middle ground, but so far it is not translating into actual, sustainable growth. There is an upper limit on what this “middle ground” business model seems to be able to achieve. Virgin couldn’t figure it out, Alaska can’t, JetBlue hasn’t. You could argue that Southwest *has* figured it out, to an extent, but Southwest is also just fundamentally structured operationally and organizationally in a way that makes it work. I would argue Southwest is closer to Frontier and Spirit in service model than to JetBlue and Alaska. And that’s part of why WN has succeeded *in growth* where others haven’t.

          As to this being described like a market of only “Walmart and Tiffany’s,” well, yes, actually, the most valuable retail businesses in the world are dominated by Amazon/Walmart/Costco on one side (all “low-cost” companies), and LVMH, of which Tiffany’s is a subsidiary (along with Louis Vuitton and other luxury brands to form literally the most valuable company in Europe). The retail market *already mimics* the airline industry!

          To be clear: I am not saying there can be *NOTHING* in-between these business models. What I *am* saying is that there is very limited growth potential in them, and that continues to be proven true in aviation. Alaska has a niche, just like JetBlue and Virgin before it. It’s a niche that hits a growth ceiling and I think that ceiling is because you can not have an airline be all things to all people. You need to pick a side. I think JetBlue will move closer to low-cost because it’s a fools errand to compete against legacy carriers. Alaska, as always, is too high sniffing their own farts to even be thinking about this.

      3. > That next step seems likely to me to be “intentional acquisition target,”

        AS is in the unfortunate position of being big enough that getting regulatory approval for being acquired by another airline would be really difficult, and might require compromises that destroy a lot of the value (e.g. divesting gates at SEA).

  4. JetBlue needs to be in all of these markets, to be sure. That said, they really need a hub (of sorts) in the Midwest – as noted by Ian L. above. I like the MKE idea, as this is a great and underserved airport. And, I am surprised that Breeze hasn’t jumped all over it already. Other potential hub candidates that I can think of include MCI, IND, perhaps MEM or BNO. Farther west, LAS is pretty overburdened and saturated already, but PHX, DEN and SLC are already taken. BOI, ABQ and RNO are too small. to be hubs (not enough O&D). That leaves us the big CA cities and maybe PDX (which is still AS territory). Without hubs or strong focus cities in the middle and western parts of the country, the airline’s growth will forever be limited to where it’s strong now. Oh yeah, it may fly to Sacramento and San Antonio — but that’s mostly to serve New Yorkers and Bostonians who are their base. Locals will rarely choose them – which is a problem they have to solve.

    Overall, I’m struck by just how deep B6 is dug into the northeast/FLL corner. An airline that looks like a major in 3 markets, and a non-player in the rest. Even with the acquisition of Spirit, it’s surprising (to me) to see that the combined carrier still has a long (long, long) way to go to be competitive in the rest of the country.

    1. Part of their problem is thinking they have to be competitive in the rest of the country. Why? What’s wrong with staying in your lanes? Alaska did it well until VX, a huge departure from their norm and now we see why that was their norm because it was a disaster from which they are still trying to recover. But hey at least it was another nice payday for Sir Richard.

      And that’s my point. Trying to do too much can be much more disastrous for a company than not doing enough. I know you’re either growing or dying. But who said the growth has to be exponential? Incremental is usually more than sufficient.

      Much of this nonsense is attributable to executive hubris. When these things blow up, the occupants of the C suite (the ones who caused the trouble in the first place) as well as their good buddies / co-conspirators (attorneys, accountants and consultants) were paid in the hundreds of millions while the employees get laid off, bondholders and vendors are stiffed and shareholders are left with nothing but capital losses.

      1. This merger makes about as much sense to me as AS/VX. Delta will do anything to make JetBlue’s life miserable in Atlanta. Detriot is not exactly a growing area. It’s a great place for a hub, but that’s about it. I don’t see B6 being successful in increasing business in any AA/DL/UA hub since they will do whatever it takes to kill it off. There are probably some opportunities a few cities, but I can’t think of them off the top of my head.

        1. I don’t know if you intentionally said “Detriot” but regardless it’s funny as hell!

      2. Yep, I have to agree. And a lot of this is done in a desire to please the shareholders – logic be damned. There is certainly a place for an airline that super serves a specific market or regional area. In the case of JetBlue, that would be the northeast. Buying Spirit really does nothing for them. More planes, more pilots. But they’re going to either get rid of the Spirit concept entirely (which won’t have me sheading a tear but it was profitable) or…..they’ll take some inspiration from Sprit as in how to cheapen their own service. Either way, it’s a no-win.

        Spirit doesn’t bring one new strong market to the table for B6. Not one. The places where Spirit has been strong has been because of their ULCC price structure. Again, that goes away. So, what you’ll probably see is B6 basically pissing away Spirit’s market share in most of these markets. These guys have been watching AA too closely. AA, the airline that bought out TWA and gutted what they bought so badly that not a trace of TWA’s existence (aside from a few old MD-80s) was visible 5 years later. Hope the bonfire they threw the money into was nice and warm. B6 sure thinks so and has the ‘smores ready.

        1. Just like AS has nearly evaporated all of the “new” markets from VX they were so excited about in the first place. B6+VX would have been strong on both coasts and had plenty of room for incremental growth. Instead we get this. ?

          1. Sorry for second post but stogieguy had really strong point. Spirit doesn’t bring one strong market to this table. Except for maybe FLL which originally B6 already had a large presence in as well.

            And that’s simply because Spirit doesn’t operate that way. They don’t need to have strong markets in terms of market share. They go into airports where they can add a daily nonstop flight to an already well served city pair and simply skim the lowest fares off the bottom. Sure they might have 20 destinations from a couple cities but most of those have 1x or less service.

            As a result, Spirit has literally zero business travel opportunity and zero brand loyalty. People end up on the Taxi because it’s cheap. But if it’s no longer dirt cheap, people in the hub cities will happily go back to the dominant carrier. Because why wouldn’t they?

            Their other business model is to tossa few flights a week from various Palookavilles to Mousetown or Sin City. Those will be the first to disappear in the JetBluIt regime because Allegiant, Frontier, Breeze (ironically) and Avelo would kill them on those flights because, duh, lower costs.

            Accountants sharpen your pencils, I see some massive write-downs coming in the next few years.

            1. I think you’re right, but this, again, is why I think we need to challenge this fundamental assumption that somehow Spirit’s product is guaranteed to be elevated to a JetBlue level. I truly think, as I have explained in other posts, that JetBlue will take this opportunity to transform itself into something closer to *Spirit’s* approach. That’s because Spirit’s business model *makes money* and JetBlue’s, um, doesn’t.

          2. Or maybe we’ll see the opposite plan. Jetblue will repaint the planes, use Spirit’s ULCC model instead, and utilize Mint as a market disruptor on the big hub flights in a way that the main trans-Atlantic carriers cannot. Norwegian tried this approach, but they didn’t have a Spirit on the domestic markets to feed completely full flights to Europe and South America. It’s not as if Jetblue has an ultra-strong mileage program-they could monetize successfully and provide a strong international passenger experience in business class. They also have the benefit of being the golden child of Emirates (along with having partnerships with Saudia), who could provide ongoing traffic feed to the Middle East and India.
            The only wrinkle in that plan is figuring out how to stay competitive to East Asia.

    2. MCI: New terminal with gates all in one basket opens in 2023 at an airport where Southwest is still king

      MKI: Southwest controls a majority of the gates in C-Concourse and Delta controls around 8 gates on D-Concourse. There are still some empty gates on C (west side) and D. There is no A & B Concourse

      ORD: Southwest is currently using “Common Use” Gates in Terminal 5/M-Concourse (Using 3 to 4 Gates), JetBlue is in Terminal 2/G-Concourse (Uses 1 to 2 Gates), Spirit is in Terminal 3/L-Concourse (Uses 4 Gates) and Delta is in Terminal 2/E-Concourse (Uses 8 Gates). Delta will be relocating to their new permanent home in Terminal 5/M-Concourse in September or October (Around 8 Gates). Frontier still operates select flights at ORD in Terminal 5/M-Concourse. There will be gate reshuffling at ORD due to Terminal Reconstruction over next few years.

      It’s very possible Southwest will get their own gates at ORD, JetBlue will most likely retain Spirit gates if merger is approved.

      1. Just a correction: G Concourse at ORD is in Terminal 3.

        In case you don’t know, the Plan 9 From Outer Space known as ORD21 is underway, and some of these airline movements are due to that, as you said. Here’s what they’re going for: Terminal 1 and Terminal 3 aren’t going to be touched. Terminal 5 (there is no Terminal 4) just underwent a gate expansion, which is where Frontier and later Southwest got their gates from. The rest of Terminal 5 is international arrivals right now. Terminal 2, the last unimproved remnant of the O’Hare of the 60s, is getting the wrecking ball. The new Terminal 2 is what they’re calling the Global Terminal. Pretentious but accurate.

        Here’s how the gates will be divvied up:

        Terminal 1: Star Alliance including international departures. In other words, the way it is now, only with more *A members doing international departures from there. Right now, it’s only LH and NH doing that. AC moves from Terminal 2/E Concourse (two gates) to Terminal 1.

        Once AC and DL move out of Terminal 2, it goes to the Land Of Fond Memories.

        New Terminal 2: Star Alliance and OneWorld shared, with international arrivals moving from Terminal 5 to the Global Terminal for those two alliances.

        Terminal 3: OneWorld with international departures. BA is sick and tired running a bus service from Terminal 3 to Terminal 5 for airside connections.

        Terminal 5: SkyTeam and “others”, including international departures and arrivals (CBP in Terminal 5 will remain open). After DL gets its gates and WN cashes in the bargain they made with the City of Chicago to trade gates at MDW (the ones that F9, G4, and XP got) for gates at ORD, as well as providing space for key international airlines, “others” are going to get a rather short shrift. JetBlue/Spirit might, might, get two gates if they’re lucky.

        If B6 think they’re going to expand in Chicago, they are seriously deluded. We in Chicago didn’t buy into New York pizza, we’re not going to buy into New York’s airline.

        1. Lol at plan nine from outer space. But great summary of the ORD project. It actually sorta makes sense. Which is nothing short of amazing for anything involving Chicago politics, especially Chicago airports!

          Despite many trips through all ends of ORD, I was happiest when WN FINALLY restarted the DCA-MDW service formally flown by ATA. However there was an unfortunate gap of several years that I’ve never understood.

        2. However, JetBlue & Alaska Ticket Counters are in Terminal 2, hence the T2 mention. I’m aware G is in T3. (my father was pilot with AL/OZ/TW for 40 years).

          Correction regarding gates at MDW and who controls/controlled them;

          Southwest traded no gates at MDW for Gates at ORD. Southwest has preferential leases on 32 of 43 gates at MDW, with the exception of between 10-12 gates which will remain Common Use/City Controlled, and includes the International Gates under the CDOA Gate Lease Agreement to insure fair competition. Those Common Use Gates are; C1, C2, C3 (Common Use/City Controlled), A1, A2, A3 (Common Use/City Controlled/International Gates) & A7, A10, A12, A14 (Common Use/City Controlled)

          A Gates;

          A1, A2, A3: Common Use/City Controlled/Used by Porter/Volaris/Southwest
          A4A, A4B: Southwest
          A5, A7: Delta (A7 is Common Use)
          A9, A11, A15-A19: Southwest
          A10, A12, A14: Common Use/City Controlled (A12 is used by Allegiant)

          B Gates;

          B1-B3, B5, B7-B12, B14-B26: Southwest

          C Gates;

          C1-C3: Common Use/City Controlled (C1 used by Avelo, C2 & C3 used by Frontier, Southwest, Charters and Airline Diversions formerly used these gates when C was vacant

          1. Typo Correction

            C1-C3: Common Use/City Controlled (C1 used by Avelo, C2 & C3 used by Frontier. (Southwest, Charters and Airline Diversions formerly used these gates when C was vacant)

    3. I don’t understand the enthusiasm for an MKE hub. Milwaukee is not a particularly big metro area (~1.6m people) with minimal population growth. It is already pretty well-served by other airlines, with a large selection of nonstop destinations on Southwest and frequent flights to all the major hubs on the legacy carriers. A high fraction of the households within MKE’s catchment area are within a 1 hour drive of ORD, which provides additional competition. Doesn’t look like a big opportunity to me.

      MCI and IND both are in growing metro areas, but are even more well-served by existing airlines than MKE. Southwest just got there first, and dislodging them would require a huge game of “chicken” with losses for both sides until either WN or B6 pulled out.

      MEM has less existing competition, but the metro area isn’t really growing. If you’re making big investments in a hub, it would be much better to have strong tailwinds from regional population growth to grow O&D traffic.

      Not sure what airport you meant by BNO.

      In my opinion all of the large metros that would be good candidates for a hub or focus city already have a strong presence from at least one of the Big 4 + at least one LCC. Southwest has done a great job building dense operations in almost all of the big cities that aren’t legacy hubs, which leaves almost no opportunities for other airlines to build new hubs without a costly price war to force them out.

      At the same time, I don’t know that a “hub” concept really makes sense for airlines that don’t fly regional jets. The major benefit is providing a point that connects smaller airports to the network via regional jet connections. If you’re not flying anything smaller than an A220-300 I don’t know if the concept works for domestic flights. Southwest makes the hub concept work now, but I think it only works because of their massive scale, and most of the historic growth that got them to their current scale came from a focus on point-to-point nonstop flights.

      The big opportunities that remain are mostly in mid-sized metro areas that are too small to be workable as a “hub”. There are many high-growth metro areas with <1m people and limited service from the Big 4 – places like Greenville, SC, Knoxville, TN, Madison, WI, etc. Breeze seems well-structured to tackle some of these opportunities, but I'm more skeptical that JetBlue could.

  5. This share data is helpful to see where B6+NK could grow but there is another level of data that includes average fare data on directly competitive routes to show what might or might not work and which highlights the strategic challenges that B6 faces.
    Not only is not clear what type of product B6 will have post-merger and after years of merger integration, but all of B6 and NK’s competitors are strategically stable and very well prepared to respond to whatever B6/NK do. It is one thing to talk about strength markets where one or both are already strong but it is quite another to talk about growing in other carrier strength markets including legacy and LUV “hubs”
    The reason why NK has grown to the size it has in legacy carrier hubs is because they chase a segment of ultra low fare traffic that the big 4 simply won’t chase in entirety. Economy basic have been very effective in limiting ULCC type growth but the big 4 don’t and won’t chase 100% of the ultra low fare traffic because they can’t make money on it. Legacy carriers do offer a certain level of value that allows them to siphon off the top X percent of ultra low fare carrier traffic – often the best. B6 is in a very different position. They directly seek out business passengers and fly many business-type routes – which means they are much more of a “target” for the big 4.

    Further, B6 needs to gain a stronger position in legacy carrier and LUV hubs where the big 4 have a huge size advantage and the abililty to fight for their markets. Add in that B6 will be either competing with AA in their own hubs – which doesn’t give AA a whole lot of incentive to continue the NEA – or not compete with AA because of the NEA and then have the DOJ charge B6 with collusion if they go after DL UA and WN hubs but not AA.

    B6 appears to be trying to do what other discount carriers have not succeeded in doing so far- build a nationwide route system including in key competitor hubs; it isn’t a stretch to be a tad skeptical that B6 will find a formula that no other carrier has found.

    1. Exactly. You can’t just add 1 + 1 and get 2 in this case. NK’s market share is based on it’s ULCC-model operations (and pricing). B6 won’t be doing that. So, whatever market share NK brings to the table will likely just go away while B6 tries to market itself in places like DTW where locals have never heard of them. And where DL will crush them.

      Look at the LA market: if ever there was a place where B6 should have been able to extend their reach, it’s there. Same higher income profile, often a lot of interaction with NY. But no, people out there have lacked interest in B6, sticking with more familiar commodities instead. How about the DC (DMV) area?? Another market that should share northeastern tastes. But no, B6 is a nothing there. It’s Boston, New York, Fort Lauderdale and that’s about it. Perhaps funneling New Yorkers to Colombia, Puerto Rico and Ecuador will be their niche – but that’s how it’s looking.

      1. I will say, one key difference in DTW vs LA and DMV, is that DTW flyers are hub captive to Delta – LA flyers have options with all carriers at LAX and the adjacent smaller airports, while DMV flyers have hubs with United, American, and Southwest through the three airports in the area.

        This is the main reason why Spirit has a (weak) 2nd position there. IF the B6/NK merger is to succeed, DTW must become a core focus city for the new airline – it’s the only airport with both decent O&D traffic, as well as reduced competition on most routes due to a legacy fortress hub.

  6. I still think this makes as much sense as a hypothetical Target acquisition of Family Dollar and selling it to investors and regulators saying ” were going to bring the best of both brands together.” It’s complete nonsense.

    This is B6 attempting to poison its own well….period. Aquire or be aquired. Barring a Chapter 7 filing, no one is going to touch this dumpster fire. Now call me crazy but I think their mid-continent Goldilocks may be DFW. There are plenty of AA non-elites (and some elites) in the Metroplex that describe their relationship with AA as disappointing, unreliable or downright abusive. These people use reward travel from non airline branded credit cards so the (lack of) global scope of B6’s network doesn’t matter. It’s not enough to build a 50% market share but I think there are enough disgruntled FFs to build a respectable (and profitable) bulwark in DFW.

    If the NEA goes down (this time) as a precondition of approving the merger then they can revisit the idea after demonstrating that they are actively competing in AA’s home turf.

  7. This will all come down to whether or not the NEA lives. B6 struggles big time outside of east coast and transcon markets, and would hemorrhage cash building a mid-con hub. B6 is not a connecting airline and a mid-con hub needs connections to survive. If the NEA survives, B6 will need the planes just to fulfill its growth targets in NYC and BOS, let alone outside expansion. BOS is way down since the NEA and their first priority needs to be to build it back up and reclaim a leadership position over DL. I can see some LAS flying hanging on, but let’s be real about B6 leadership’s interest in flying anything outside of their niche market. Look for more NYC, BOS, FL and Caribbean flying and not much else.

  8. JetBlue had a huge vision of building Three west coast mega focus cities at LAX,SFO,LAS with Mini focus cities in DAL and ORD with potential merger with Virgin America. But AS stalled that plan.
    B6 will definitely focus on replacing NK out west first with this merger to grow its overall market recognition and shift the mindset that their just that Long haul airline to NYC and Boston. Most of the smaller west coast cities that currently have a small token flight to NYC will lose the nonstop with the passengers feed more focused on feeding the new west coast hubs of LAX and LAS. B6 will use the freed up slot times at JFK to feed more new Midwest passengers to NYC and onward connections to The European destinations. The old America West Mid night LAS red eye bank will come roaring back to life in the combined B6/NK giving the Opportunity steal a vast majority of passengers from WN who don’t want 05:00 departures out of Sin city on the last day of vacation. JetBlue has also had a long love affair with SLC. With SLC new terminal renovations and gate expansion plans B6 could easily make SLC its east west connecting center in the future.
    As for the onboard product. JetBlue definitely revamp to Hybrid seating. I think JetBlue will keep the current Mint product s on the A321 dedicated to the trunk rotation to JFK,BOS and Europe. But on the ALL core seating A321 aircraft and the A320 and A220 aircraft they will add 8 Jr Mint (Big Front seats) followed by even more leg room seats to the exit row. Exit rows aft needs to be non reclining Spirit seats/Blue basic seating.

    1. This is one of the worst takes I’ve ever read on this blog. What evidence is there to suggest that B6 ever had an interest in mini focus cities in DAL and ORD? Also, B6 is strong in the transcon market to NYC/BOS, so why would they cut these routes to add midwest flying, which is their worst performing region? The whole point of the NEA is to allow AA to serve the midwest cities which they are stronger in. And B6 hasn’t expressed any interest in opening a connecting hub in SLC, as they don’t have the regional A/C for that to be successful; SLC has a disproportionate amount of capacity because B6 has a corporate office and thousands of employees there. People have suggestes for years that B6 will open a east/west connecting hub in the middle of the country, even though they’ve never hinted at it or expressed interest in doing so. And the suggestion for half the plane having Spirit style seating is ludicrous. I can’t even imagine how you conjured any of this total nonsense up.

      1. In fairness, I think the point about creating an America West style red-eye bank from LAS is a good one.

        I’m also wondering about the possibility of blue basic going full bare bones basic, a la spirit style bone crunching seat pitch. I’m not saying it’s a great idea but it’s worth considering.

        Otherwise I couldn’t agree more, they will not be cannibalizing their existing east coast and x-con based service to throw darts at the Midwest board.

        1. The idea of a Spirit style bone crunching seat would send many of JetBlues most loyal customers running for Delta, Southwest perhaps even United or American. And JetBlue’s cost are still much higher than Spirits cost so they still won’t be able to match Spirit’s ultra low cost fares.

          I think the DOJ will approve this merger and when that happens I think over time at least 60 – 70% of Spirit’s customers leave jetBlue for Frontier and Allegiant. For jetBlue to survive they can not afford to loose their own customer base. In certain markets jetBlue has a cult like following people who are loyal to jetBlue and not all of these customers fly Mint some of them use blue basic. For this merger to have any chance of success jetBlue has to keep their entire customer base in tact. The idea of devoting half or even a forth of the aircraft to a Spirit like bone crushing seat pitch is one sure way jetBlue will loose some of their most loyal customers.

  9. Plenty of empty gates on C (Some available gates), B (Vacant) & D (Vacant) in STL for JetBlue/Spirit and Frontier to expand.

    Southwest has already expanded into the former OZ/TW/AA D-Concourse by 4 to 5 Gates and re-designated them as E-Concourse Gates. D-Concourse is one long building (great to get your steps in – LOL)

    However, STL has their own Airport Modernization Plan to reconfigure the terminals in to one. That’s another topic

    1. Southwest already has STL pretty solidly tied up. I think the only way to build a “hub” or “base” there would be to get in a costly price war by competing head-to-head with Southwest on routes that probably don’t have enough traffic to justify two airlines.

      It has a good geographic location and infrastructure to be a “scissor hub” for east/west travel between smaller destinations, but I don’t think the economics work without very substantial O&D traffic.

  10. All this prognostication aside, this lowly FLL flyer is just praying that B6 keeps some of NK’s Great Lakes and midwest routes, so there is a civilized alternative to the God-awful WN metrobus with wings.

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