JetBlue’s Operations In Boston And Its Struggle To Maintain Dominance
The low cost carrier, JetBlue, began its operations on the East Coast, establishing a foothold in New York, its headquarters. The carrier’s unique selling point is that it provides a great customer experience at economical prices. The evidence for this can be seen in the fact that it has won the JD Power award for airline customer satisfaction for 12 straight years. Since its launch some two decades ago, JetBlue has succeeded in becoming the fifth largest airline in the U.S. After getting a firm hold in New York, it has begun spreading its footprint in Boston, Fort Lauderdale, San Juan, Orlando, and cities on the West Coast.
In this note, we talk about JetBlue’s operations in Boston, and how it is struggling to maintain dominance.
JetBlue In Boston
After the extraordinary performance of the Mint service on routes from its hometown, New York, the airline began expanding its premium services in one of its focus cities, Boston. Over the years, JetBlue has become the largest airline at the Boston Logan International Airport, offering more flights and nonstop destinations than any other carrier at the airport. Boston is the second largest city for the company, right behind New York.
JetBlue recently announced the addition of Atlanta as its 63rd destination from Boston. This can be seen as a response to Delta’s increasing footprint in the area. Delta Air Lines, in a recent press release, announced its plan to expand its operations from Boston, offering new service to San Francisco and Nashville, as well as more flights to Seattle, Orlando, and Milwaukee. It will also add weekly service from Boston to key destinations in Caribbean-Montego Bay, Jamaica, Punta Cana, and U.S. Virgin Islands-St. Thomas. JetBlue is increasing flights out of Boston by 40% to 200 peak day departures. Some of the new routes include:
- A fourth daily round-trip Mint flight between Boston and San Francisco International Airport.
- Year-round service between Boston and Montego Bay’s Sangster International Airport (MBJ), which currently operates as seasonal service.
- Year-round service between Boston and St. Thomas’ Cyril E. King Airport (STT).
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Furthermore, the company’s interline and codeshare agreements with nearly 50 airlines will help connect customers through Boston Logan and New York JFK. Passengers will be able to connect to destinations throughout the world on carriers such as Emirates, El Al, Aer Lingus, Etihad, Qatar, and Cape Air.
JetBlue Versus Delta
Historically, Delta and American Airlines have been the two largest airlines in Boston. Lately though, JetBlue is making its presence felt by becoming a major competition. Jetblue’s share of total enplaned passengers at the Boston airport stands at a strong 30% as of May 2016, as opposed to Delta’s 12%. Over the years, JetBlue has become the largest airline at the Boston Logan International Airport, offering more flights and nonstop destinations than any other carrier at the airport. With the already significant presence in the city, it has also initiated Mint services on its flights on the Boston-San Francisco route to capture business travelers.
However, one major disadvantage that JetBlue may face in its attempt to become the largest player in Boston is its incomplete route network. There are still a significant number of major U.S. markets where JetBlue has no flights at all, including Cincinnati, Columbus, Kansas City, Minneapolis, and St. Louis. While Delta may want a bigger chunk of the Boston market, it’s unlikely to build a full-blown hub there, as in Seattle, due to its already large footprint in New York.
Have more questions about JetBlue Corporation (NYSE:JBLU)? See the links below:
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- Higher Expenses Weigh On JetBlue’s Q3’16 Results, Even As Unit Revenues Improve
- JetBlue’s Q3’16 Earnings Preview: Reduction In Capacity Expansion To Arrest The Decline In Unit Revenues
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- How Has The State Of Air Travel In The U.S. Changed Over The Years?
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for JetBlue Corporation
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