I’m not saying that JetBlue wants Norwegian to collapse…but let’s just say that the new marriage of convenience raises some questions.
A friend of mine, around 30 at the time, once was asked who he was looking for in a marriage partner. Very bluntly, he said:
And old, rich woman–preferably with a very bad cough.
He goes by the motto, “It’s better to want what you don’t have than have what you don’t want.”
New Partnership Between JetBlue and Norwegian
Today, JetBlue and Norwegian announced their intention to create an interline agreement. This will include connecting JetBlue flights available for purchase on the Norwegian website and Norwegian connecting transatlantic flights available on the JetBlue website.
The focus will be on three JetBlue hubs:
- Boston (BOS)
- Ft. Lauderdale (FLL)
- New York (JFK)
Tickets will go on sale early next year for flights in the summer of 2020. Norwegian serves all three cities.
Tell-Tale Signs From the CEOs
The Norwegian model and JetBlue model differ greatly. Both are technically low-cost-carriers, but JetBlue emphasizes its full service experience, with competitive legroom, free wi-fi and snacks, and friendly service. Increasingly, that is more an illusion than reality, but these are not two airlines cut from the same cloth. Norwegian may have seat-back screens, but does not try to hide from its a la carte model.
It is instructive to look at what the CEOs are saying about today’s news.
JetBlue CEO Robin Hayes said:
Norwegian shares our belief that customers benefit when we can bring competition and low fares to the transatlantic market currently dominated by joint ventures, legacy alliances and sky-high ticket prices.
Notice that such a statement is not even a commitment to Norwegian, simply a commitment to one value that the two carriers happen to share.
Meanwhile, Geir Karlsen, Norwegian’s Acting CEO clearly emphasized the ties with JetBlue:
We are very excited to partner with JetBlue as this will make international travel even smoother and more available for our customers. JetBlue is the largest airline at several of our key gateways in the United States, specifically New York JFK, Boston and Fort Lauderdale, and this partnership will create a plethora of new route connections for customers on both sides of the Atlantic.
The dichotomy raises an interesting question over JetBlue’s true intentions in this new interline agreement.
Competing Models But Mutually Beneficial Partnership
Both carriers will see an upside to this partnership. The feeder traffic from one carrier to the other will result in increased ticket sales. It will also introduce JetBlue customers to Norwegian and Norwegian customers to JetBlue. For JetBlue, that may be particularly instrumental since it plans to begin its own transatlantic flights to London in 2021.
Passengers will appreciate that their bags can be checked through and do not have to be collected again when departing a U.S. gateway for Europe. Passengers connecting from Norwegian to JetBlue will also like the pressure of on-time performance being lifted. Norwegian flights often run late. Currently, if you book a connecting flight in the USA and you Norwegian flight arrives late, you are out of luck and may have to buy a whole new ticket. Having a JetBlue connection on a single ticket will protect those connections from unforeseen delays.
> Review: Norwegian Air 787-9 Premium Class London Gatwick To Los Angeles
> Review: JetBlue A321 Mint New York To Los Angeles
JetBlue’s Secret Hope?
Norwegian is a troubled carrier. It has nearly collapsed on several occasions due to liquidity issues and always seems to be hanging on for dear life.
Meanwhile, JetBlue has no slots for its planned London flights from Boston and New York in 2021.
Were something to happen to Norwegian, this partnership could position JetBlue to be the beneficiary of a number of slots, not just in London, but throughout Europe.
Even if Norwegian managed to hang on, JetBlue positions itself to acquire at least a couple slots from Norwegian, especially if the interline agreement proves lucrative for Norwegian. After all, the partnership could become a source of leverage for JetBlue, especially there exists any imbalance in booking source.
Thus, JetBlue stands to benefit no matter what happens to Norwegian. In fact, I wonder if such a contingency is already worked into the undisclosed letter of intent signed today?
CONCLUSION
It may be too crass to say that JetBlue is hoping for Norwegian to fail, but it could certainly prove convenient. Despite a number of logistical hurdles that must be worked out, I think the partnership will be successful for both parties…as long as Norwegian hangs on.
Are you excited about the new JetBlue – Norwegian partnership? // image: Norwegian
It seems like it would be a win-win for JetBlue to buy some Gatwick slots from Norwegian for their flights, giving Norwegian much needed capital to survive.
I think they are better as partners than if Norwegian were to collapse because with the connectivity they together offer it provides an alternative to the JVs if people are flexible about connecting. I could imagine in the absence of Norwegian if JetBlue were to start flights to London BA/AA would dump capacity until they leave and then go back to sky high fares.
Two thoughts:
If I thought I had booked JetBlue Mint and got Norwegian premium economy I would be pretty mad.
JetBlue should be able to start securing LGW slots with relative ease given the absence of Thomas Cook from the future. They need to act otherwise BA, easyJet and TUI will be in there. TK are also expanding at LGW with services to places like ADB and the holiday destinations on the coast but LGW is always keen to attract new routes, carriers and services so JetBlue would fit the bill on all fronts.
They can always lease the slots for next summer if they can’t use them, there will be takers.
When it comes to mint vs premium i’m sure it will be the same as booking a legacy carrier now. When booking the customer will need to keep an eye on what flight and aircraft they are actually booking.
There are plenty of examples with legacy carriers when you see a great first or business call rate only to find out that it’s a lesser product on a codeshare flight and not the service you thought you were booking.
I could see this going a couple ways:
1- JetBlue uses this time to study (stratify) the amount of customer interest from East coast to Europe & beyond (Norwegian’s destinations), West (Best) coast to Europe & beyond (Norwegian’s destinations) utilising Norwegian as either the “Partner” or sacrificial lamb.
2- JetBlue builds up the route network and when all is said and done either flies the routes dropping Norwegian, or utilising Norwegian to carry “Discount” flyers abroad using their own product for “Loyalists.”
As for the baggage concern, It would be a non-issue if you purchase the fare through JetBlue under their rules, conversely, purchasing through Norwegian the baggage remains subject to their rules. Perhaps using the two companies to distinguish services/products.
If Norwegian fails, JetBlue could possibly reach out to one of their current partners to complete the trips.
In 2021 I could see them utilising the data gathered from the year prior to make a solid decision as to what service & where ex. SFO/LAX-BOS/JFK/FLL-LGW/ORY/LIS/SVQ etc.
As to the slots, certainly the leadership at JetBlue would not make an agreement of sorts that would keep them out of LGW or any other airport w/in the Norwegian network.
One can hope.
I believe the Norwegian slots at LGW were already put up as collateral a couple months back in the last round of debt payment renegotiations (Norwegian had already run out of other furniture to sell), so it seems unlikely that if they fail JetBlue would be in line to receive any, even with a partnership in place. However, as you say, perhaps they are looking beyond London at other European airports as well.
Great write up
I’m certainly not looking for Norwegian to fail.
I thought about this matchup sometime ago I hope it works for both of them it seems to be a no-brainer
I’d love to see a B6 788 or 789 or two
It would be great cross branding
Personally I’m wondering if they’re not eyeballing the 787s though
And of course lgw slots
As for the comparison of the two products
distinctly different
Norwegians could be improved by improving the quality of food and allowing persons to pre-order
And to cater enough food
I’m tired of running out of food halfway through the cabin and this is all Airlines
The last i flew both Norwegian and JetBlue I did notice the change in the service approach
Less of the carts and more bringing drinks out in small batches directly to specific locations.
And I personally love Norwegian
service, within moments you can start ordering food and can do it throughout the flight with gaps in until they run out of food
Thanks, Matthew, for this excellent commentary & analysis that I’m featuring as an “excellent read” with links posted elsewhere!
Excellent summary………..JetBlue/Norwegian cooperation would be a step in the right direction but I fear its too little too late. We’re now approaching the low season where last year Norwegian lost $400 million and I can’t see them fairing any better this year. Norwegian say they are going for profitability overgrowth which I take to mean they will concentrate on routes that lose less money than others. Flying leisure pax over the Atlantic is a really tough gig and whilst a deal with JetBlue might help, in my opinion it won’t be enough for Norwegian to unlock the ‘front of plane’ revenues they so desperately need to make a profit.