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JetBlue Airways

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JetBlue Airways is an American low-cost airline owned by JetBlue Airways Corporation (NASDAQ: [JBLU]). The company is headquartered in the Forest Hills neighborhood of the New York City borough of Queens, and its major hub is located at John F. Kennedy International Airport.

On August 29, 2001, JetBlue began a focus city operation at Long Beach Municipal Airport near Los Angeles, , and another at Logan International Airport in Boston, in 2004. It also has major operations at Oakland International Airport in the San Francisco Bay Area, Fort Lauderdale-Hollywood International Airport, and at Washington Dulles International Airport. The airline mainly serves destinations in the United States, along with flights to the Caribbean region, the Bahamas, and Bermuda.

JetBlue also maintains a corporate office in Cottonwood Heights, .

Contents

History

Foundings

CEO David Neeleman founded the company in February of 2000. Several of JetBlue's executives, including Neeleman, are former Southwest Airlines employees. JetBlue started by following Southwest's approach of offering low-cost travel, but sought to distinguish itself by its amenities, such as in-flight entertainment. In Neeleman's words, JetBlue looks "to bring humanity back to air travel."

JetBlue's founders had set out to call the airline "Taxi" and therefore have a yellow livery to associate the airline with New York. The idea was dropped, however, for several reasons: the negative connotation behind New York taxis; the ambiguity of the word taxi with regard to air traffic control; and threats from investor JP Morgan to pull its share ($20 million of the total $128 million) of the airline's initial funding unless the name was changed. The airline's founders also considered making its home base in Trenton, New Jersey, but this idea did not gain much support. JetBlue is a non-union airline. However, the IAM (International Association of Machinists) is stepping up efforts to unionize JetBlue's "ramp service workers", in a move that has been described by JetBlue's COO Dave Barger as "pretty hypocritical", as the IAM opposed JetBlue's creation when it was founded as New Air in 1998.

9/11 aftermath, profitable years

JetBlue was one of only a few U.S. airlines that made a profit during the sharp downturn in airline travel following the September 11, 2001 attacks. Since its IPO on the NASDAQ stock exchange in 2002, JetBlue has become one of the most popular airline stocks in history and currently has a multi-billion dollar market capitalization. Financial results were strong for the airline throughout the 2002-2004 years, and many analysts and journalists lauded the airline for its success. The airline sector responded to JetBlue's market presence by starting mini-rival carriers: Delta Air Lines started Song, and United Airlines launched another rival called Ted. Song has since been disbanded and is being reabsorbed by Delta Air Lines. Ted is still in operation.

In 2002, JetBlue acquired LiveTV, LLC for $41 million in cash and the retirement of $39 million of LiveTV debt. LiveTV equips JetBlue with 36 channels of live DirecTV television programming at every seat. Two years later, JetBlue announced it would add 100 channels of XM Satellite Radio, Fox TV programs and 20th Century Fox movies to its in-flight entertainment in 2004. The movies are free on flights to Santiago, Dominican Republic and Puerto Rico where DirecTV service is not offered. Movies on all other flights are charged.

JetBlue is one of the last airlines that has not attempted to raise money by selling snacks during flights, a move that many larger airlines have made on most domestic flights and some international flights. JetBlue has also told customers in commercials and print ads that they "encourage you to use the call button", advertising their devotion to customer service. Another recognizable JetBlue ad are their "letter ads", for example: "Dear New York", and ending with "Sincerely, JetBlue".

Services

As the airline continued to make record profits, new planes allowed for additional route opportunities. This included JetBlue's first international service, New York to the Dominican Republic on June 10, 2004. Additional service to the Bahamas began in December 2004, and service to Bermuda began May 4, 2006. Service to Aruba, subject to government approval, begins September 15, 2006.

However, trouble was on the horizon. For many years, analysts had predicted that JetBlue's growth rate would become unsustainable. However, the airline continued to add planes and routes to the fleet at a brisk pace.

In 2004, JetBlue began flights from New York's LaGuardia Airport and added service in 2005 to Newark Liberty International Airport in Newark, , thereby serving all three major New York area airports. Also in 2005, the company added service between JFK and Boston Logan with 10 daily flights using its new 100-seat Embraer 190 aircraft.

Record high fuel prices

In October 2005, JetBlue announced that its quarterly profit had plunged from US$8.1 million to $2.7 million largely due to rising fuel costs. In addition, the airline was struggling with their new aircraft, the Embraer 190. Operational issues, fuel prices, and low fares, JetBlue's hallmark, were bringing its financial performance down. In addition, with higher costs related to the airline's numerous amenities, JetBlue was becoming less competitive.

Regardless, the airline continued to plan for growth. It was announced that 36 new aircraft were scheduled for delivery in the year 2006.

In February 2006, JetBlue announced its first ever quarterly loss. For 4th quarter 2005, the airline lost $42.4 million, enough to make them unprofitable for the entire year of 2005. The loss was the airline's first since going public in 2002. JetBlue also reported a loss in the 1st quarter 2006. In addition to that, JetBlue forecast a loss for 2006, citing high fuel prices, operating inefficiency, and fleet costs. During the first quarter report, CEO David Neelman, President Dave Barger, and CFO John Owen released JetBlue's Return to Profitability (RTP) plan, stating in detail how they would curtail costs and improve revenue to regain profitability. They expect to report a small profit in the second quarter.

JetBlue Airways was the first US airline to start up with more than $100 million dollars, the first US airline to introduce the "paperless cockpit", and was the first US airline to install security cameras in passenger cabin.

Fleet

JetBlue tail
Enlarge
JetBlue tail

Aircraft # Seats Notes
Airbus A320 88
(85 on order) 		156 Uses International Aero Engines (IAE) V2500 engines [link]
Embraer 190 10
(90 on order) 		100

The average JetBlue Airways fleet age was 2.8 years in March 2006.

In the early history of JetBlue, the company's CEO, as he claims, had always sat on the 27th (last) row of each Airbus A320 aircraft he flew on, signifying that pleasing the customer is more important than pleasing the CEO, since the 27th row had no reclining seats. The 27th row has since been removed from the A320 fleet, adding up to 2" more legroom to all rows aft of the wing on all aircraft in the A320 and E190 fleets. Coincidentally, the 26th row does recline.

In July 2005, JetBlue announced that it would be upgrading the size of its seatback TVs that provide customers with DirecTV programming. All new aircraft are being equipped with the larger seatback TVs, with the exception of the E190s, as they were equipped from the start with the new screens. The airline also aims to add more than 100 channels of XM radio to all of their aircraft. The E190s are all XM equipped, and the A320s are being XM equipped when each aircraft's TV screens are being upgraded. In addition, the airline aims to increase the size of the overhead bins on all aircraft.

Employees

JetBlue has around 10,000 employees. Customer support is handled via employees in Utah working from their homes, providing JetBlue with significant savings. JetBlue has been selling 20% of their tickets over the phone, with the remainder being sold online.

Incidents

Flight 292, an Airbus A320, emergency landing at LAX
Enlarge
Flight 292, an Airbus A320, emergency landing at LAX

Destinations

JetBlue avoids flying routes which are in direct competition to other low-cost carriers, particularly Southwest Airlines. In doing so, the airline has achieved a near monopoly in Long Beach and is ranked number three in the New York market overall, with its 3 major airports. JetBlue flies to 45 destinations and recently launched service to Pittsburgh in late June. Flights to Charlotte began July 12 and flights to Raleigh begin July 20. Service to Nashville start in August. Future plans call for expansion across the United States and into Canada, Mexico and the Caribbean. Flights to Aruba start September 15, 2006, subject to government approval. JetBlue has recently received authority to serve Cancún, Mexico, after having competed for the route against Delta Air Lines and USA 3000. They will enter four new domestic markets in the fall of 2006 - Houston, Sarasota, Columbus (OH), and Tucson.

Non-Stop Destinations from Major JetBlue Cities

JFK International Airport: Aguadilla, Austin, Bermuda, Boston, Buffalo, Burbank, Burlington, Charlotte, Columbus (OH) (starts October 3, 2006), Denver, Fort Lauderdale, Fort Myers, Houston/Hobby (starts Sept. 7), Jacksonville, Las Vegas, Long Beach, Nashville (starts August 31, 2006), Nassau, New Orleans, Oakland, Ontario, Orlando, Phoenix, Pittsburgh, Ponce, Portland (ME), Portland (OR), Raleigh-Durham (starts July 20, 2006), Richmond (VA), Rochester (NY), Sacramento, Salt Lake City, San Diego, San Jose (CA), San Juan, Santiago DR, Sarasota (Starts Sept 21), Seattle/Tacoma, Syracuse, Tampa, Tucson (starts Sept. 28), Washington/Dulles (starts August 17, 2006), West Palm Beach

Boston Logan Airport: Austin, Buffalo, Columbus (OH) (starts October 18, 2006), Denver, Fort Lauderdale, Fort Myers, Las Vegas, Long Beach, Nassau, New York-JFK, Oakland, Orlando, Phoenix, Pittsburgh, Richmond, San Jose (CA), Seattle/Tacoma, Tampa, West Palm Beach, Washington-Dulles

Long Beach Airport: Boston, Fort Lauderdale, Oakland, Las Vegas, New York-JFK, Sacramento, Salt Lake City, Washington-Dulles

Washington Dulles: Boston, Fort Lauderdale/Hollywood, Las Vegas, Long Beach, New York-JFK [begins Aug. 17], Oakland, San Diego

Ft. Lauderdale International Airport: Boston, Long Beach, New York-JFK, New York-LaGuardia, Newark, Oakland, Washington-Dulles

Orlando International Airport: Aguadilla, Boston, Burbank, Newark, New York-JFK, San Juan (PR), Syracuse-starts July 20

Oakland Airport: Boston, Fort Lauderdale, Long Beach, New York-JFK, Washington-Dulles

Las Vegas McCarran International Airport: Boston, Burbank, Long Beach, New York-JFK, Washington-Dulles

Newark Airport: Fort Lauderdale, Fort Myers, Orlando, San Juan, West Palm Beach, Tampa [restarts September 14]

LaGuardia Airport: Fort Lauderdale, Orlando, West Palm Beach

Burbank's Bob Hope Airport: Las Vegas, New York-JFK, Orlando

New routes

Discontinued routes

JetBlue has pulled out of only two airports and four routes, citing poor customer demand. Atlanta was removed because of not enough customer build up. Despite suspending service between Newark and Tampa after the spring of 2006, the airline has announced plans to resume the route.

See also

Books

Blue Streak by Barbara S. Peterson, Portfolio, 2004 ISBN 1-59184-058-9

External links


Members of the Air Transport Association
ABX Air | Alaska Airlines | Aloha Airlines | American Airlines | Astar Air Cargo | ATA Airlines | Atlas Air | Continental Airlines | Delta Air Lines | Evergreen International Airlines | FedEx | Hawaiian Airlines | JetBlue Airways | Midwest Airlines | Northwest Airlines | Southwest Airlines | United Airlines | UPS Airlines | US Airways
Associate Members: Aeroméxico | Air Canada | Air Jamaica | Mexicana

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