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JetBlue Airways CEO Dave Barger last week met with Management.travelat New York JFK's new Terminal 5, the carrier's home since it began operations there in October 2008. An excerpt of the discussion follows.
How is JetBlue adapting its product to attract more corporate accounts?
There is no doubt that in this next chapter of JetBlue we want to be very relevant to the business flyer--the corporate traveler. We take a look at, first of all, a network that is friendly: Do we fly to where someone wants to fly? The corporate traveler is looking at the frequency in the market, so adding frequency into core business markets is something that we are absolutely doing; not just in New York, but places like Boston and other locations that we call focus cities. We have entered into and are in the process of really being in the market from the standpoint of, literally, corporate programs. Very soon we will announce the programs that we are in the process of finalizing for 2008, so that we truly have a corporate program in place at large corporations, where a travel manager can say, "Yes, JetBlue is inked." Refundability of fares, visibility and transparency through the global distribution systems, and again, specific corporate contracts, are all things that we are about right now, and are excited about as we look at 2009 and beyond.
Can you describe the demographics of your business customers?
If we look at our route network, we are the largest airline at JFK, including international, domestic, mainline and regional. If you put all of New York together--Newark, LaGuardia and Kennedy--we are the largest domestic airline operating in the New York metropolitan area. However, when you really start to take a look at the business flyer--and in New York it is fair to say that the large corporations are already managed with travel programs mainly with the legacy carriers--there are plenty of small and medium-size businesses that are very appropriate for JetBlue to go after. And some larger ones, too, as the [existing] corporate programs expire for these companies. People think of Orlando and Fort Lauderdale [in Florida] or San Juan [Puerto Rico]--places where we have a large operation--as being discretionary or beach travel, and they are really not. Sure, a large part of it is, but the economy of Puerto Rico is 8 percent tourism and 92 percent is pharmaceutical, manufacturing and agriculture. That is not unlike when you really take a look at Tampa, Fla. There are a lot of Fortune100 companies with operations in places like Tampa. People have thought of JetBlue as very much a discretionary airline--and that is true. However, where we fly to and where we are adding service and really connecting the dots so that the business flyer can take us on a day trip is really the geography that we are looking at of corporate travel. It is not necessarily East Coast; it is transcontinental and it is West Coast, as well. But the bulk of our flying is Boston, New York, Washington, D.C., Orlando, Fort Lauderdale and down into the Caribbean. Bogotá [Colombia], which we open on the 29th later this month, will be heavily business travel.
Can you please discuss the development of the CompanyBlue corporate booking portal?
I call it our version 1.0. We were looking for it to be relevant to the small and medium-size unmanaged businesses. CompanyBlue is in the process of morphing and you will see something, whether it stays packaged as CompanyBlue or something different. It's the ability to be truly relevant to the business traveler. It is one of our core initiatives as we move into this year. There are two other large initiatives: one is changing out our reservation systems. We are currently on the Open Skies Navitaire system. We haven't closed out the change, but we know that there are limitations even within CompanyBlue because of the current reservations or passenger service systems that we are on. That is a good example of CompanyBlue 1.0 morphing into 2.0 and beyond. The third initiative is operational integrity. It is not a secret that the New York metropolitan airports are right in the epicenter of the most congested air corridor in the United States, and so the New York airports tend to be at the bottom of the [performance] list. But we want customers to know that you can count on flying on JetBlue out of Kennedy.
Do you feel it is appropriate for the federal government to legislate and enforce consumer protections for air travelers?
I don't believe that it is the right place for the government to step in, and it has not been federally mandated at this point. Even in the states that have moved forward with passenger bills of rights, it has not moved forward because air travel is really under a federal mandate as opposed to a state to state mandate. From our perspective, [developing our own passenger bill of rights] was absolutely the right thing to do, and for the business flyer it is the only airline out there with a passenger bill of rights. We are going to make good on a cancellation, a delay or a service recovery that was within our control. That was obviously put in place after the events of early 2007, but it has made us a much stronger airline and it is a huge commitment to the customer--be it a discretionary or nondiscretionary flyer--to say, "Hey, listen, I can really count on these guys." There is a guarantee, if you will. I don't think it makes sense for the federal government to get involved. We have something in place that is much stronger than anything that the federal government has been talking about to date, so I've encouraged the rest of the airline industry to follow suit.
What has the investment by Lufthansa meant for JetBlue, and how do you expect that relationship to develop?
It is validation of our business model, our airline and our brand. It's not just the financial investment in JetBlue--which was over $300 million early in 2008--but it is also commercial synergies, which will take place early this year. The ability to connect traffic over New York, Boston and, at some point, over Orlando into the Lufthansa/Swiss network is really huge. For our sales team to be in an office and talking about not just JetBlue as a corporate travel experience, but also Lufthansa, Swiss and others ... Two plus two equals six in my mind, and I'm very excited about the Lufthansa agreement and looking forward to further mining that relationship.
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