JetBlue styles itself as the bowl of porridge that is not too hot, not too cold, but just right. It believes customers, let’s call them Goldilocks, will always choose JetBlue when they can.
You remember the story of Goldilocks and the Three Bears. As JetBlue looks toward London and beyond, it wants to be the “just right” airline.
In an interview with the Financial Times, JetBlue CEO Robin Hayes was once again asked to defend why his airline wants to serve London and eventually other destinations in Europe.
Questions were framed in light of the recent collapse of WOW Air, the mounting losses for Norwegian, and the failure of other upstarts that attempted to take on the big boys. But Hayes did not appreciate the comparison.
It is like chalk and cheese comparing us to these airlines.
Hayes points to a full-service onboard experience with more legroom and wi-fi, dismissing the notion that it can be remotely compared to budget carriers fighting for customers on the same routes. He also notes JetBlue’s highly acclaimed MINT business class, which can easily compete with the best of the competition.
London to New York is, of course, the highest capacity commercial long-haul route in the world. There is great potential and a new entrant to the market with 13 planes may not make much of a dent. But in the New York and Boston markets, JetBlue intends to make a large and lasting dent.
Hayes points to an alliance-based oligopoly that currently rules the market:
Our view is that the transatlantic market has become very concentrated in the hands of the three large alliances…That’s why the fares keep going up. People think there are 12 airlines, there are just three mega airlines.
Hayes was referring to SkyTeam, oneworld, and Star Alliance, though I think pointing out the joint-venture partnerships among the alliance airlines is a better comparison. He wants regulators to divest slots at Heathrow, which is nothing but a foolish fantasy.
JetBlue’s Recipe For Success
Still, JetBlue need not go down the path of its rivals. It won’t offer a bare-bones product like Norweigan or WOW. Neither will it offer an all-premium product like Maxjet, Eos and Silverjet that failed miserably.
Instead, it will offer a “Goldilocks” hybrid of luxury and budget, competing for legacy traffic with lower expenses. Key to keeping costs under control will be its use of one aircraft type, a narrowbody Airbus A321LR. The use of such a (relatively) small an efficient aircraft should keep planes full even during low season. JetBlue will be highly disciplined with capacity.
One huge reason WOW failed was that it added widebody aircraft to its fleet. Besides the engine issues, Norwegian also struggles to fill its Boeing 787 Dreamliners. JetBlue will likely not encounter this issue.
CONCLUSION
JetBlue hopes that it will be the “Goldilocks” airline by offering a great product at a cheaper price. It won’t compete with Norweigan. Instead, it will compete with carriers like British Airways, Virgin, and United. If it can drop prices and offer a similar product, which has to be the plan, we have every reason to believe that Goldilocks will be happy to lay down in JetBlue’s bed.
Hayes has a point. I would be very pleased to see a new entrant to the London – East Coast market but I certainly don’t want to use a budget airline. The three alliances thrive on high prices and mediocrity and I really don’t like any of the offerings and up against what we can book from the UK to travel eastbound, westbound is an expensive shambles.
Jet Blue won’t come with a huge offering but I would be willing to bet there are enough people who want a fresh offering in the premium cabin for them to succeed and enough who want a bit of difference in economy, all for sensible fares to ensure the A321s are full.
Boston to London is just a few hundred miles further than Boston to Los Angeles. And while sub-$1000 RT business fare are routinely available between Boston and Los Angeles (for lie-flat products, no less), flights to Europe are routinely 4x that and often even 8x that.
I would love to see MINT revolutionize the transatlantic market with La-Compagnie-esque fares in a mixed-cabin configuration and a truly premium service/soft product to match (as we know MITNT is capable of.