JetBlue’s challenge: How to avoid becoming ‘like any other airline’
While unsteady at first, JetBlue has posted a profit since 2009, according to FactSet data.
JetBlue and most of its rivals have struggled over the past year, however, as investors dumped airline stocks as fuel costs ate into carriers’ bottom lines. JetBlue’s shares are off more than 23 percent over the 12 months through Jan. 23, and the only U.S. airlines to post a gain in that period are Spirit, which is up nearly 29 percent and United, up more than 6 percent.
Another uphill battle for the airline is improving on-time arrivals, as JetBlue has lagged competitors.
Even though it might want to avoid it, JetBlue has made some strategy changes over the years that have more in common with a Delta or American. In 2014, it launched Mint, a premium cabin with lie-flat seats, on its trans-continental routes, a play for lucrative business travelers in cities like Los Angeles, San Francisco, New York, Boston and Seattle. Fares in its premium cabin are often a fraction of what travelers could find on more established carriers, and the big three legacy airlines have also looked for ways to improve their transcontinental service.
JetBlue is considering adding flights to Europe, and a key part of that will be Mint class, Geraghty said.
JetBlue’s workforce has also pushed to unionize in recent years, which will mean higher labor costs. JetBlue pilots ratified their first contract over the summer, while flight attendants voted to unionize last April.
Last summer JetBlue raised fees on checked bags by $5 to $30, a move that was copied by its larger rivals, to combat a surge in fuel costs.
“It became like any other airline,” said Robert Mann, an aviation analyst and industry veteran.
The airline is also rolling out new cabins that may anger some flyers because to fit more seats on board, the airline is cutting standard legroom by two inches to 32 inches, still more than on many other airlines. Its “most legroom in coach” tagline is a major selling point.
“Cutting the pitch in economy: that’s what Wall Street told them to do,” said Mann. “I think they’re still getting punished.”