JetBlue Ramps Up New Res Capabilities, Maintains "Light Touch" On Corporate Contracting

A few months after cutting over to the SabreSonic reservations platform, JetBlue Airways is gearing up to launch new selling capabilities, roll out new merchandizing options and forge more partnerships with other airlines. Meanwhile, the carrier in the past year has stepped up corporate contracting initiatives, though executive vice president and chief commercial officer Robin Hayes said JetBlue would maintain a "light touch" on the corporate market.

Outgrowing the Navitaire system that was used since the carrier's inception, JetBlue in late January cut over to the SabreSonic res system to enable interline agreements, codeshare partnerships, more expansive revenue management capabilities and further merchandizing opportunities.

"When we were on our Navitaire platform, it was extremely challenging to do anything other than what we were doing," Hayes said. "Now that we've cut over, we have a platform that gives us a lot more capabilities to do different things, and we're working through what those are."

One early sign of things to come emerged late last month when JetBlue announced a surprise interline deal with American Airlines. "That's what you should expect to see in the next few months—more capabilities and new relationships with other airlines," Hayes said, noting agreement with other carriers should come to light in the next three or four months. "One of the main reasons we chose Sabre was the ability to provide connectivity with other carriers."

Though JetBlue is keeping its ancillary revenue playbook close to its chest, experimentation through the SabreSonic system already is underway. One example is a variable pricing test for its Even More Legroom program, which JetBlue launched in 2008, charging one of three price points depending on length of haul for customers to upgrade to seats with more pitch.

"We're now trying to move to specific prices by route," Hayes said. "For every route we fly we can have a different price, whereas in the old system we could only have three prices in total, and we just put all of our routes into one of those three buckets." In its experiment, JetBlue is testing price points from $5 to $70, depending on the route.

Ideas abound and more ancillary tests are in the works, Hayes said, but hastened to add that the focus is "not taking what we got today and start charging for it, but creating new products and services that they might like."

SabreSonic also has enabled faster connectivity to the global distribution channel, which has grown in recent years after once direct-only JetBlue reentered the major GDSs.

"Clearly, now we've gone to full functionality in the GDS, and we've become a lot easier for travel agents to book," Hayes said. "Since cutover, we have seen some additional volumes in bookings coming through travel agency channels."

Growth is largely good news in the case of "traditional" agencies, Hayes said, which generally bring in a higher yield than direct channels, but less appealing in the case of some online-originating travel agencies that just replace business it would otherwise gain directly.

"It's important to us that we do remain fundamentally a direct-booked airline," Hayes said, "and I think we're going to be focused on which channels of distribution add value to us and those that maybe replace what we get today and make some adjustments."

Meanwhile, Hayes said JetBlue "started to put some corporate contracts in place last year." On the carrier's approach to the corporate market, Hayes said contract structure depends on the account, but "we keep it very simple, so we'll offer either discounts or a fixed rate and expect a certain volume commitment. I think we have five account managers covering the whole United States, so it's a light touch."

Hayes cited the downturn and a general migration from business to coach as factors spurring corporate interest. "We're not an airline for road warriors who are super-super platinums who always get the upgrade to first—that's not who we target," Hayes said. "For the significant group of business travelers who fly less frequently, we have a nice product where we fly."

Hayes said Boston, where the carrier is growing departures by 30 percent this year, would serve as a locus of corporate growth as well. "The challenge for us is we didn't offer a compelling schedule. I think what you've seen us do in Boston, for example, is build up a schedule that is competitive for business travelers. Boston is the market where we expect to see the most traction in terms of getting additional business travel," Hayes said.

Hayes, meanwhile, said the hunt is on to replace the director of sales Tim Luceno, who left the carrier last month to join Marquis Jet.