JetBlue Runs Into Latin America Troubles


The latest Air Show podcast drops later today. Tune in to hear us discuss the messy Pratt & Whitney situation. It’s a good one. But then again, I think they’re all good ones, so what do I know?

The first quarter was a terrible one for JetBlue. On the one hand, it looks like the airline was using this as a “kitchen sink” kind of quarter where it just threw all kinds of special items in to try and start Q2 with a clean slate. That includes the last of the failed Spirit merger charges. On the other hand, there is some real weakness in the business, and Latin America is causing a lot of trouble.

Newly-returned President Marty St George laid it out from a high level by saying “if you exclude our Latin flying, our system-level unit revenue growth would be positive for the first quarter versus actual unit revenue growth, which was down 2.5 percent.”

The problem is, however, that Latin America (which includes Caribbean) is an enormous part of the JetBlue network. It’s not going anywhere, so it just has to get better. But Latin America is not a monolithic unit. There are a lot of different types of Latin markets.

Dave Clark — who was running revenue and planning until a recent shift — explained this in more detail.

I think the easiest way to think about it is the breakdown between Caribbean beach destinations and Caribbean VFR destinations. The VFR is holding up relatively well. Industry capacity there has been relatively less. So that is still under some pressure, but not as much as the beach destinations where we see increased capacity, really high increased capacity, which is driving even higher pressure on the yields.

VFR stands for “visiting friends and relatives.” These are trips where people are going to see family and friends, which as we all know is very different from a true vacation. The latter would fall under the “leisure” bucket. It’s not easy to break these down completely, because there is overlap. But there are some markets that are very clearly just beach and others that are very clearly primarily VFR. Here’s how I broke down the JetBlue route map.

JetBlue Latin/Caribbean Map generated by the Great Circle Mapper – copyright © Karl L. Swartz.
Brown dots are leisure, green dots are mixed, blue dots are VFR, and San Juan stands alone in yellow

JetBlue has already started to clean these markets up by pulling out of several of them in June 2024 (except where noted):

  • Bogotá
  • Havana (ended September 2023)
  • Lima
  • Puerto Vallarta
  • Quito

What’s interesting about this move is that all of these exited markets are VFR except for Puerto Vallarta. Didn’t Dave say VFR is doing better right now? To be fair, several of these are really stretching the legs of those JetBlue aircraft. That’s an issue because it eats up a lot of aircraft time when JetBlue is paring back on deliveries. Presumably the fares are bad enough that JetBlue would rather use those airplanes more wisely closer to home.

Except for Puerto Vallarta. That must have just been terrible all around.

If we exclude those markets that are gone or going soon, then let’s take a look at how capacity breaks down by market type.

Q1 Departing Seats by Market Type to the Continental US (All Carriers)

Data via Cirium
2019 to 2024 from left to right, % shows 2024 increase over 2019

First, we can see that the leisure markets are just that much bigger in terms of size. But just take a look at that growth. The percentage you see is the increase in seats in Q1 2024 versus Q1 2019. Technically, San Juan has the biggest percent increase, and we’ll get to that later. But from a sheer aggregate number perspective, just look at how much leisure has jumped.

Q1 2024 had 40 percent more seats in those leisure markets. FORTY PERCENT. But wait, there’s more. If you compare just to Q1 2023, seats are up a staggering 23 percent. In one year, nearly a quarter more seats were added. Of course these markets are strained.

As JetBlue suggested, the VFR markets look much more stable. There has been some growth, but some growth is to be expected. We’ll just put VFR aside and focus on leisure and San Juan.

Starting with leisure, who is adding all this capacity? It’s pretty much everybody. At least, everybody but Southwest. Just look at this piling on.

Departing Seats by Airline from Leisure Latin/Caribbean Markets to Continental US

Data via Cirium

It may not have the highest percent increase, but just look at how many seats American put into this part of the world. And remember, these are only the leisure markets where JetBlue flies. American has a ton of other markets in this region beyond those.

Certainly JetBlue is responsible for some of this excessive growth, but you can’t really point to a single airline. There’s just too much capacity and something is going to have to shake out.

Then there’s San Juan. I broke San Juan out into its own for a couple reasons. First, nearly a quarter of JetBlue’s seats departing Latin/Caribbean are out of San Juan. It is a focus city for the airline, and it stands alone. It’s also a mix of leisure and VFR, though I would assume it tilts toward VFR pretty heavily.

Oh, and there’s one more reason: Frontier.

Just take a look at the growth in seats by airline from San Juan. Note that I changed this a little and instead of just looking at Continental US flying, I also included intra-Caribbean flying as well since that is a part of what JetBlue does from San Juan.

Departing Seats by Airline from San Juan to Other US/Caribbean Markets

Data via Cirium

In this market, JetBlue hasn’t grown much, but oh Frontier. It has zoomed from seventh place on this chart all the way to second. The airline has dumped capacity into San Juan, because it saw opportunity. Meanwhile, Spirit was the leading ultra low cost carrier in the market back in 2019, and it did not like Frontier’s moves. So it poured on capacity of its own.

Remember how Florida and Las Vegas were overly-stuffed with capacity and the ultra low cost operators fled? San Juan was one of those places that looked appealing. Even if JetBlue has a different model, an extra seat in a market is an extra seat, and JetBlue feels the pain.

It is completely understandable that JetBlue’s quarter went to crap based on what happened in Caribbean/Latin America. These trends show the problem very clearly. It’s not entirely clear, however, how JetBlue fixes this unless other airlines pull back as well.

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25 comments on “JetBlue Runs Into Latin America Troubles

  1. JetBlue is an airline that caters to leisure travelers. It does not have a meaningful share of the corporate travel wallet. It never has, partly due to its penchant for running a messy, delay-prone operation. JetBlue is slowly being eaten by the competition, specifically the strength of the 4 largest US carriers, who have adapted and evolved. The future for JetBlue is bleak.

    1. Alaska has figured out how to compete against the big 4 US airlines. JetBlue lacked the leadership to find its profitability lane against its competition. The board, Robin Hayes, and upper management are to blame.

      1. Alaska knows what airline it is trying to be, and focuses on doing that pretty well. They run a very tight ship as well to keep their costs in line, and the strength of their loyalty program helps.

        JetBlue is trying to do everything but also can’t get the table stakes of reliability down.

    2. So every other airline that goes through this adjust and makes network realignment to came back around. But when it’s jetblue “oh the future is bleak for them, don’t see a path forward.” One thing that I’ve seen constant on the comments, is that for 20 years there are those just postulating the ill fate of jetblue. Yet they do what other airlines do, adjust and make the correct moves over time. Which is what they’ve done before. When the financial crisis hit on’08 many were saying the same about them. I love how it reflects how for some B6 is continuously as a thorn to the legacy carriers and just wish B6 away. Jetblue Caribbean franchise out of the northeast is extremely strong and the ULCC’s don’t really have much there to compete with.

  2. I do wonder if JetBlue’s schedule has something to do with it. For those of us randomly up at 3 or 4 am, you see a line on FR24 of Jet Blue aircraft coming into JFK with just as terrible times going out from very vacationland places in the Caribbean, having a resort loving wife means I know, no vacationer is going to go to an island with premium resorts and then buy a discount ticket for a flight that leaves in the middle of the night, 12 hours after check-out.

    Feels a bit like the Amsterdam dilemma with JetBlue. They want to be at these locations, but haven’t found a way to get the right time slots to match the demands of the traveler

    1. Most of those off hour flights are VFR…to and from places like San Juan, Santo Domingo, and Santiago.

      Their beach runs typically have better times.

  3. B6 isn’t the only airline to have some struggles here. Deltas TRASM in the region fell quite a bit (12%), which Ed Bastian himself attributed to overcapacity in the market.

    B6 does not have anything to lean on here. Their competitors all either have better gateways w/ connecting opportunities, lower costs, deeper pockets, and/or loyal FF bases.

    It doesn’t help that Jetblue has little brand awareness. Many people aren’t even aware that they exist, and the ones that do are avoiding them because the planes are late late late.

    No wonder B6 tends to pull in much lower fares than the competition.

    Short term the only way out of this is to shift the capacity to Boston.

    1. I think you overstate some of JetBlue’s issues. Their brand awareness is fine in the US, and VFR/leisure markets) are not nearly as sensitive to on-time performance as business travelers. (except for some cruise travelers who want to fly to their embarkation city the same day as the ship leaves).

    2. Lack of connecting opportunities to almost anywhere is why I have never flown Jet Blue. As I have stated before, it seems to exist exclusively for people flying in and out of JFK.

  4. Over the past few years, it feels like so many airlines are “preparing for the last war”, and simply dumping extra capacity where they see opportunities and higher fares… Only to get burned as their competitors are doing the same thing, at the same time, so markets go from opportunities to overcapacity & drags on earnings in a few quarters.

    I understand that that is part of the game for the industry, but it needs to be balanced with strategic growth and investments; chasing yesterday’s high yield markets and dumping capacity into them doesn’t seem like a lasting strategy for long term success.

    1. I think Frontier is actually preparing for the next war by positioning themselves as the ULCC in these markets against the day Spirit either has to cut away at their non-domestic network or goes away entirely.

    1. There are nearly a million people of Peruvian descent in the US. That includes a woman in my office, who goes home once or twice a year to see family.

    2. Lima is definitely VFR from the US. You get some of the backpacker crew going to Cusco, but I ran into far more tourists from Europe than North America when I was there.

  5. Just worth mentioning, Puerto Vallarta is staying in the network but is now going seasonal. The LAX route is getting cancelled, however, the JFK route resumes in December and continues through the end of the booking window now.

  6. This reminds me of the 80’s and 90’s where airlines would just go to war with each other often slitting their own profit throats in the process. If Frontier thinks they can sink Jetblue, don’t think the Big won’t do the same to Frontier.

    And between labor groups asking for every red cent and the government not being able to hold back spending money it doesn’t have…..
    ….the ULCC’s won’t be the only ones headed for capacity trouble.

  7. Not quibble, but when I look at that third chart, doesn’t Frontier jump from 7th to 2nd place, not 7th to 1st? Am I missing something?

  8. It was only a couple years ago that the big 3 were sending their widebodies to Latin America leisure destinations because those were some of the very few international destinations that were open in the early days of reopening from the pandemic. I suspect that the big 3 realized how much demand they could capture at the expense of low cost carriers who see the Caribbean and Latin America as a substitute for the business travel that they don’t carry compared to the legacy/carriers. The big 3 have found that their global networks and basic economy fares allow them to offer competitive value even in Latin/Caribbean markets.

    B6 specifically is running flights to Latin America and the Caribbean at all hours of the day and night in order to get utilization that it could only otherwise duplicate with transcon redeyes but that full schedule has come at the expense of operational reliability since it impossible to reset the operation after a bad weather day when such a high percentage of the fleet is flying on the back side of the clock.

    Southwest’s announcement today that they are closing Cozumel and trimming service in three legacy carrier hubs shows how hard it is to compete with the big 3 – a reality that few would have imagined for the first 40 years of deregulation.

    Add in that the big 3 all added double digit amounts of capacity to Latin America in the first quarter. Delta’s justification is that it is implementing its joint venture with Latam while United is trying to keep from being dethroned as the 2nd largest U.S. carrier in the region and AA is defending its supremacy. Of course, the big 3 also serve deep S. America which the LCCs including B6 do not serve.

    DL is going to generate the profits to justify its investments in Latin America growth with UA hot on DL’s heels while AA will benefit from greater domination of the S. Florida to Latin America as B6 cuts.

    While so close to home, Latin America is setting up to be the biggest battle in the U.S. airline industry. Weaker players like B6 will continue to struggle to carve out a profitable place for themselves.

    1. It’s a wait and see – JetBlue will struggle as they pull back from FL, but I doubt we see share shifts in LATAM among the Big 3.

      AA is the strongest incumbent by a distance w/ ideal hubs for the region in Miami, Dallas, and Charlotte (more Caribbean for the latter) – they have the name-brand and most connectivity in the region but no alliance partner (which hasn’t mattered). They may get more share as JetBlue and Spirit recede, but it won’t be a ton.

      United is 2nd, but they have a solid hub for the region in Houston but limited in Florida – they have Avianca and Copa as partners they’re trying to JV with but Avianca is struggling. It’s hard to see how they grow profitably.

      Delta is 3rd not too far behind United, but w/ no hubs in Texas and Florida and relying on Atlanta they’re handicapped. Their partner LATAM is in better financial position after leaving bankruptcy in 2022, but their mega-hub is in Miami so Delta will need to infringe on AA’s turf for that JV to be meaningful – Delta’s initial attempts have failed and nothing looks on the docket right now.

      Mike Arnot of Cirium noted in 2023: “The combined schedules for Q1 and prospective for Q2 2023 put Delta and LATAM about 14% ahead of American on capacity. However, looking at actual passenger revenue share for the full year ended 2022, American took around 27 percent of the market, whereas Delta and LATAM combined for 18 percent. LATAM had 12.4% of the revenue while Delta had 5.8 percent.

      In ASMs for the 12-month-period ending in March 2023, American and GOL had 32%, while Delta and LATAM had 28% – but counting seats instead of ASMs because Atlanta is farther from South American markets than Miami is, and so Delta accumulates more ASMs flying to the same destination. In terms of seats, for the year ending March 2023, American and GOL had 32% of seats, while Delta and LATAM had 22 percent.”

      That implies a lot of underperforming capacity for Delta and LATAM – it’s hard to see that changing given the geopolitical issues in the region esp. in South America and a lot of Delta’s adds on its own metal have been in LAX and JFK, not markets you want to serve the region from historically.

      1. Thank you for your thoughtful and data-filled response.

        First, the US 3 network carriers have proven that they can and do not only compete effectively against low cost but also ultra low cost carriers. Latin America and the Caribbean for the non-big 3 is about narrowbodies, the same thing that the big 3 can do. It doesn’t hurt that the prime Latin leisure narrowbody season is at the same time that the domestic season is relatively weak. The US 3 can shift a relative handful of planes to Latin/Caribbean routes until summer and then use those aircraft on domestic routes where they generate more revenue on shorter flights. There will be increased competition for the marginal passengers above what each airline carries on their core Latin/Caribbean systems on a year round basis.

        MIA is clearly the most valuable hub to Latin America and the Caribbean; WN, B6 and NK have tried to duplicate it at FLL but the sheer number of players there has hurt everyone. NK’s position as the “last man standing” and the financially weakest is interesting – but their model is probably the best to siphon off price sensitive passengers from S. Florida. AA will benefit from less competition from FLL even though they did fine for the past 10 years of slowly reducing competition at FLL. DFW is as good of a secondary hub to Latin America as IAH is. While AA has given up on much of the Latin leisure markets from LAX and NYC, they are still in the game for NYC to S. America.

        Data shows that DL via ATL competes very well from MCO and TPA to Latin America and the Caribbean because ATL is not that far out of the way and DL has such a massive amount of capacity from ATL to every Florida city. ATL is a very competitive and cost-efficient hub for all of the rest of the US to Latin America and the Caribbean other than from S. Florida.

        The AeroMexico and Latam JVs are all about giving DL the presence in competitive markets that DL needs including from S. Florida. All the two JVs don’t provide is S. Florida to Central Florida. For the first time, though, DL can talk to corporate clients about S. Florida to Latin America as well as from the rest of the US. DL plus LA is already the largest from NYC and LAX to Latin America and it is certain that DL can become competitive in all of the major MIA to Latin America markets w/ a fairly small number of flights on its own metal to markets that are outside of the JVs plus what it needs to fly strategically to have a presence. There is no need for a large hub at MIA or huge numbers of flights including from the US other than Florida. DL says the DOT is open to imposing lesser restrictions on AM-DL.

        UA will find it harder to keep up w/ DL; IAH is simply not an effective connecting hub for most of the US. In time, DL will move into a solid #2 behind AA to Latin America driven by its JVs and better geography of ATL over IAH.

  9. I really hope JBU is able to get it together. If not, DCA being my home airport, I’d hate to see them give up the DCA-SJU slot.

    1. Could Jetblue be allowed by DOT to sell beyond-the-parameters DCA slots pair? I doubt SJU-DCA route is very profitable. Jetblue will earn more money utilizing the slots flying DCA-LAX.

      1. Tony – They can’t sell the slot. Some of the beyond perimeter slots can change destination (as American did with the US Airways San Diego slot which it moved to LA). But some can’t. I don’t know which one the SJU flight falls under.

      2. DCA-SJU is a top 5 performer in B6’s network. What evidence would make you think it’s not very profitable?

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