Routes Reconnected: JetBlue CEO: “it’s a fabulous time to experiment with routes”
When times are good, there’s less incentive – or need – to try ‘risky’ routes. But now, “everything’s risky,” Robin Hayes, JetBlue’s CEO, said.
“Almost all of our growth is normally adding capacity in current markets. We have little capacity – maybe two to four planes – to target to new routes.
“Suddenly, we have planes on the ground and business travel demand that’s depressed for a while.”
This provides the opportunity for new routes. “We have a tremendous amount of assets – so try stuff! Some things will be better than expected, others less well. If it isn’t working, put something else in there.
“It’s a fabulous time to experiment with routes.”
And JetBlue has certainly been experimenting.
“We’ve announced 62 routes since coronavirus with more to come. This is really about taking advantage of cash-positive flying based on demand in certain markets.”
Everyone is chasing the same ball
Everyone is more or less now after the same demand. “In an environment where there’s hardly any demand, everyone is running after the same ball. Airlines aren’t playing their normal positions – everyone is just chasing that ball.”
And that ‘ball’ is leisure, and often thinner, markets.
This feeds into JetBlue’s core. Over 80% of its network is leisure and 85-90% of its traffic is point-to-point, Hayes said. “We’re predominately focused on US domestic, and the international we have is very close to the US (Caribbean, Mexico, Central America). We think this type of traffic will recover quicker than some of the long-haul business travel.”
In JetBlue’s ‘experiment’, it is relying more than ever on its vacation team for demand trends, looking hour-by-hour at bookings, and working with “community and regional-specific data.”
The latter is “absolutely something airports can help us with.” This is key, Hayes said: “some of our recent adds have come down to that local insight.”
JetBlue to Europe is an experiment too
“I see a lot of pent-up demand for European travel,” Hayes said. “A lot of people have put off trips but they need to make them. I think our entry is well-timed.”
It’s also reasonably low risk, representing as it does a very small proportion of its total capacity. “Whether it’s spectacularly successful or a failure will really be immaterial from a company point-of-view.”
He drew a parallel with JFK – LAX with Mint. “The disruption that we caused from lowering fares and improving product quality was immense.”
To Europe, he is far more concerned with the price of existing airlines than product quality, although JetBlue will offer a “refreshed” Mint product across the Atlantic.
“How can you with a just conscience charge people thousands and thousands of dollars for a one-way seat?”
JetBlue sees airport opportunities from coronavirus
JetBlue has often been frustrated that it hasn’t had enough access at slot-congested airports.
Coronavirus has offered multiple different opportunities. “We’ve looked at where have we had been historically constrained that we’d like to grow.”
“We took decisions, even during the pandemic, to add to Newark – we now have more flights from Newark than we had pre-pandemic. And also LAX – we’ve always wanted to grow there. We were struggling to better do that.”
JetBlue now expects to have 70-75 flights a day from LAX by 2025.