JetBlue Airways Enters Low-Fare Fray With N.Y. Focus

<B>JetBlue Airways Enters Low-Fare Fray With N.Y. Focus</B>

By Megan Hjermstad

JetBlue Airways, the start-up low-fare airline based at New York JFK International Airport, on Jan. 11 entered the Sabre and Worldspan GDSs and launched its new site (www.jetblue.com) and reservations center (800-JETBLUE), with fare and schedule information and direct booking capabilities.

The carrier commenced sales for three daily nonstop roundtrip flights from JFK to Ft. Lauderdale starting Feb. 11, and to Buffalo beginning Feb. 17. The airline also announced it will offer service to Tampa beginning in mid-March.

Customers will be able to book tickets on the user-friendly Web site as well as check in at airport kiosks. JetBlue will use a simple Internet-based electronic reservation and checkin system, called Open Skies, developed by JetBlue CEO David Neeleman. "It has taken off in Europe since deregulation but we are one of the few airlines using it in the U.S.," said Gareth Edmondson-Jones, director of corporate communications for JetBlue. "Our res agents are using the same reservation system to book flights."

JetBlue will focus on the underserviced and overpriced New York market. The carrier, for example, will charge $49 for a one-way flight to Buffalo. "New York is the largest market in the country with the smallest presence of low-fare carriers," said Edmondson-Jones. "In the U.S., there are 5 percent more people flying low-fare carriers, but in New York the number has dropped. Ever since People's Express went away, the numbers have fallen off."

The airline has committed to offering low fares to Rochester, N.Y.--ranked sixth in the U.S. Department of Transportation's list for most expensive city fares--and Syracuse, N.Y., by mid-2001.

"It is going to affect pricing and what has been a high-price area will probably come down" said Ray Niedl, director at ING Barings. "It will bring more competition to carriers such as US Airways, and force maybe them and Southwest to be more aggressive. You can see this already with Southwest going to Albany."

Southwest last week announced it will begin service to Albany, N.Y., promising to bring low-fare service to another upstate New York city that has suffered from high fares and lack of air service.

Niedl said that Delta Express may be most affected by JetBlue entering the market, as currently "Southwest isn't in a lot of markets." However, he added, "this would affect Southwest in that these are future growth markets."

Neeleman, who founded JetBlue last year, has experience identifying potential airline markets: He also founded Morris Air, which he sold to Southwest Airlines in 1993. In fact, his plan for JetBlue closely follows the successful Morris model. "We're mostly fairly short-haul flights," said Edmondson-Jones. "Our business model is to offer quality service and an innovative product at a low fare."

The new airline promises high-quality service on a fleet of brand new Airbus A-320 aircraft. The carrier in April 1999 placed a firm order for 25 A-320s with the option to purchase 50 more planes, and confirmed a separate lease of seven planes. Its second aircraft is scheduled to be delivered next week.

"We will receive a new plane on average every six weeks and add a city pair," Edmondson-Jones said. "We will be announcing a new destination every six weeks." By the end of this year, the carrier plans to serve 11 cities. DOT has certified that the management is qualified to provide scheduled service but the carrier still seeks certification from the Federal Aviation Administration, which it should obtain this month.

Each aircraft will be configured with 162 leather seats, with 32 inches of seat pitch and an extra inch of room across. The carrier will offer only a single class of service. "More and more companies' travel centers are putting limits on business class travel and looking for a better, cheaper way to do it," said Edmondson-Jones. "Businesses will love the cost savings. Business travelers will love it: There is more room in coach than most carriers."

The airline, following the example of another start-up carrier overseas, Virgin Atlantic Airways, also promises individual inflight amenities such as a live satellite television at every seat, with 24 channels of programming including Bloomberg, CNNfn, ESPN, and the Discovery and Weather Channels.

"Business travelers fly more than anyone else and they are fed up with indifferent service more than anyone else," Edmondson-Jones said. "We have a different way of doing it; we are all about bringing humanity back to air travel.