JetBlue is taking on American and Delta in the New York City “shuttle” market, adding six daily flights between Boston and LaGuardia starting this fall. This is the first significant attempt at taking on the Delta/US Airways (now AA) duopoly in that market in a long, long time and it presents an opportunity for disruption in the business model for that market, one which is typically higher fares for the short route. Introductory fares start at $49 but do not expect that they will stay low forever; despite the high frequencies of service fares are uncommonly high, particularly for the walk-up business travelers.
The company prides itself on showing up in markets where competition is limited and fares are high. This is exactly that sort of situation. Moreover, it allows JetBlue to increase its value for business customers, an area where it is strong in Boston and growing in New York.
JetBlue will fly the route on its 100-seat Embraer E190 aircraft. By the time the route launches the fleet is expected to be fully fitted with the Fly-Fi in-flight internet service and operating gate-to-gate, allowing passengers to remain connected throughout the trip, even if the taxi delays at LaGuardia are a bit long.
Launching the Shuttle service was made possible, in part, by the FAA‘s decision to relax slot controls at Newark airport starting this Fall. JetBlue will move a number of Florida frequencies from LaGuardia to Newark to free up the slots which the Boston service requires. On the New Jersey side of the operation two daily flights to Fort Lauderdale and one daily flight to Orlando, Tampa, Palm Beach and Fort Myers will be added. CEO Robin Hayes explains the shift in a statement:
The FAA’s decision to ease slot restrictions at Newark allows us to bring more low-fare, award-winning service to Newark, and clears the way for a long overdue alternative between LaGuardia and Boston for those who have been priced out of air travel and onto the roads and rails by high-fare legacy carriers.
United Airlines has held a monopoly on many of the Florida routes from Newark, similar to the duopoly in the Shuttle market. JetBlue’s arrival in the space breaks these up, at least in theory. There’s also the chance that – especially in the Shuttle space – the fares will creep up towards the legacy numbers given the potential to make good money on those short hops.
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