Why six? Because that’s how many things I thought were interesting in the call. And I use the terms “useful” and “interesting” with a certain amount of liberty. That said, here’s what I found interesting in today’s call:
Mint is Massive
The rollout of JetBlue’s Mint premium cabin product is driving a big chunk of the RASM improvement these days. Swapping an all-core A321 for a Mint plane is a double-whammy on RASM: ASMs drop by ~20% thanks to fewer seats on board and 16 of those seats sell for way more money than they did before business class was on offer. That’s good news for the company in the eyes of Wall Street and I seem to find myself in Mint once or twice a year so I think it is pretty good for me, too. Even if prices have been raised 14 times since the product was introduced.
— Seth Miller (@WandrMe) July 25, 2017
That said, the growth may be slowing a bit. In the most recent fleet plan JetBlue says that some of the 2018 deliveries are likely to be all-core planes with 200 seats on board. Still pretty comfortable for coach passengers, except for the lavs at the back.
— Seth Miller (@WandrMe) July 25, 2017
Long Range planning is a long term project
Wondering about the theoretical flights to Europe on A321LRs? The company still hasn’t made a decision there. And even if it does choose that approach we’re talking about late 2019 deliveries for the flights across the Atlantic. That is a long term view, to be sure, but it also takes Airbus a decent amount of time to get all the pieces in place for new aircraft. That means JetBlue would need to notify Airbus in late 2017 for the late 2019 deliveries to be LR models. Presumably the company will also disclose to the rest of us pretty close to then as secrets have a habit of leaking out. But no real obligation there.
JFK T6 is an even longer term project
The process surrounding building out JFK T6 started last week with a request for qualifications put out to potential developers. But the company says that any such development “would be coming to fruition in the middle of the next decade.” That’s a long way out. Also worth noting that the T5i extension was designed with the ability to add a bunch more gates basically straight down from the end of the existing pier. And those gates could be built as wide-body capable, an important factor in supporting partner airlines. That would be the easy version of a T6 build but it could be the right approach. Adding another terminal entrance at that end, along with curb space and more check-in desks for partners would be good for both JetBlue and those partners.
The Newark network is of suspect profit
The shift of Florida flights to Newark to support the Boston “shuttle” operation at LaGuardia is competitively challenging. That market continues to see very aggressive pricing (Thanks, ULCCs!) and JetBlue is either hemorrhaging cash or at least not making very much there. That’s my interpretation of the statement that the company is “closely monitoring” the situation there. Not too surprising given the competition, really.
Still seeking the Biz market
The leisure market dominates JetBlue’s customer base in just about every way the company can measure it. During the call it was suggested that revenue is still split 80/20 for leisure versus business (I wonder which category they put me in with much of my travel being both??) and that even in Boston, the strongest business market, less than half of the operation is business travelers. There was also talk about LA as a focus city which led to a conversation about connections and, eventually, a reminder that JetBlue really doesn’t have much of that, either.
We don't really connect very much. Check out DB1A and you will see that we like locals. Boston is the perfect example. Minimal connectivity
— Marty St. George (@martysg) July 25, 2017
TrueBlue has a strong future ahead
As airlines continue to be pressed by analysts for insight into the value their loyalty programs deliver – mostly in the form of credit card partnerships buying points – we continue to learn more about the way those deals are structured and where the value potential is. In today’s call Marty St George acknowledged that the TrueBlue program still has a ways to go to fill out its potential value proposition for the airline.
We absolutely see our program as being relatively undeveloped versus a lot of our competitors. TrueBlue itself is really only about five years or six years old. I think the benefits that we’ve seen from moving over to Barclays and the incredible growth rate we’ve seen from them, I think is indicative of the fact that it’s not a mature program. I think that we see that as a great opportunity for us.
Whether this means new partners, expanded earn/burn options or just more credit card deals is hard to know for sure. But expect more to come from the program, just as soon as they put a new Director of Loyalty in place; that position just recently vacated.
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