JetBlue Expands Network, Participates In GDSs
JetBlue plans by the end of December to have launched this year in 14 markets, many of which cater to business travelers. The carrier also recently signed distribution deals with Sabre and Galileo. JetBlue senior vice president of sales and marketing Tim Claydon recently spoke with BTN airline editor Jay Boehmer about how these and other initiatives are making the carrier more palatable to the corporate market.
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BTN: Airlines have negotiated GDS pricing down. Did that play into JetBlue's decision to reevaluate its GDS position?
Tim Claydon: Most definitely. In this world of deregulation, there are a lot more creative solutions that can be provided by the GDSs. We never took a never-say-never approach to this. The last thing we've ever wanted to be accused of was having our head in the sand and not following what's going on around us. We've had good dialogue with the GDSs for all of our years of existence. Obviously, with the way our business is evolving and with what's happening in their space, it led to us to have a meeting of the minds.
BTN: It's not unprecedented. JetBlue in the past participated in the GDS.
Claydon: Certainly. We were in those channels in the early days and we made the decision that with the way our business was evolving, and obviously the cost of GDSs, it didn't make sense for us. Now we see that it can.
BTN: Was cost the main reason JetBlue left the GDS?
Claydon: It was a big factor. One of the other reasons that we did it was at that stage we were very much a leisure-driven airline and we felt that the customer that was our customer could and should be a JetBlue.com customer. That turned out to be the case, but this year, as we've evolved into more mixed markets and business markets, the customer we need to get is more of a mixed customer now.
BTN: Are you already live on Galileo and Sabre?
Claydon: We're live both on Galileo and Sabre right now. We had to do some configurations for some of the corporate booking tools, but the last I heard everything is up and running—not just the core GDSs, but also the booking tools that sit on top of Galileo and Sabre.
BTN: Have you already noticed more bookings following the deals with Galileo and Sabre?
Claydon: It is pretty instantaneous. Word spreads fast in the agency community and we saw an immediate pickup in bookings from those two channels. We'll continue to work with those companies and continue to spread the knowledge and education of JetBlue's presence in the GDSs and how to book us.
BTN: Are you looking at the other GDSs?
Claydon: Needless to say, now that everything's public and we're live, the phone has been ringing from a number of other channels. We'll talk to people. There are continuing discussions that are taking place with other companies and exploring other channels. The direction is to say how do we make sure we put JetBlue in front of an expanding customer base.
BTN: Direct connect is another way to do that.
Claydon: Yeah, and we've done some good work there. We are going to be transitioning to the new platform of the new Navitaire reservation system at the end of October and with that comes a tremendous amount of flexibility in how you connect to third parties. That will open up a lot of opportunity.
BTN: JetBlue also has expanded into more business markets.
Claydon: Fourteen new cities in a year is a lot of growth into new markets. When you look down the list of where those markets are, sure, there are some pure leisure markets in there, like Aruba, but a lot of those markets—Columbus, Ohio; Nashville; Houston; add that together with Charlotte, Raleigh, Pittsburgh and Richmond—they're very much markets where we feel we have an attractive proposition to the business traveler.
BTN: Is JetBlue making more of an effort to court the corporate market?
Claydon: Definitely. We've worked hard over the years to create a presence in the business market, with CompanyBlue and working with the other corporate booking tools. This year, we've moved into markets such as Pittsburgh and Charlotte and Raleigh and Nashville, which just began, as well as Houston. These markets have a significant corporate base and we heard loud and clear from a lot of corporate travel mangers that if you want to make yourself attractive from a booking perspective, then the GDS is an important aspect of that.
BTN: Especially for those companies that have mandated the use of certain channels.
Claydon: We heard it loud and clear from the market that, "We want to book JetBlue." You're coming into these markets with frequency—it's not like we're flying to Pittsburgh once a day. We're doing it four times a day from New York, and we have a schedule that facilitates pretty good day-trip business in both directions. Travel buyers have wanted to use JetBlue, but now we're making it easier for them.
BTN: Are you reformatting any programs to court the corporate market, or reevaluating your stance on corporate discounts?
Claydon: Not really. We're still very much focused on putting out attractive fares in these markets. We've seen in all the markets that we've gone into—and Richmond is a classic market for this—where the fares were really high and our entry into that market has brought all of the fares down. We're trying to get this through to the corporations and business communities in these markets, basically saying, "Please don't forget who brought the fares down for you." Certain markets like Pittsburgh, for example, have been burned before. They have seen low-cost carriers come into their market, ask for their support and then not succeed. They clearly want to see JetBlue succeed, because it's going to have a broader impact on the fares that they're going to have in and out of their market. They really understand that now. The other thing that we're trying to educate people on is this is a very nice product. Many of these markets are being flown with a new Embraer 190, which is extremely comfortable. People think Embraer and they think regional jet, but if you fly on the 190, it's so far from that. It's a full-sized cabin and everything that goes with it. We're continuing to work closely with the business communities to educate them about JetBlue. I don't see us stretching out to corporate deals, but there's more education on how we've been able to bring local fares down in their markets.
BTN: Do you expect these initiatives to ultimately shift the ratio mix of business travel and leisure travel?
Claydon: Definitely. There's not two ways to look at that. It's hard for us to put a handle on the numbers right now, because a lot of these markets are relatively new and they take time to build. We've seen good success in most of the new markets that we've opened this year and very positive response from the business market. It's fair to say that when you bring low fares to a business market, it isn't just about marketshare shift, but about growing the market. One of the biggest success stories that we've seen has been the success of our JFK-Boston flights. Low fares aren't just about stimulating the leisure market but the business market as well, by allowing people to say, "I'm going to do that extra client trip, or I'm going to go sign that contract in person." It's now affordable to do so.