No-frills airline JetBlue is an aviation success story
Your CFO has issued a new edict: Travel as cheaply as possible -- or else. But you've suddenly been ordered to make a trip the day after tomorrow from New York City to Orange County, California, and the cheapest, nonstop, round-trip fare you can find is more than $2,200, for a coach seat, probably in the middle of the row. Someone says, "Check out JetBlue." You're thinking, "Me, on a business trip on a start-up, low-cost, no-frills airline? No way." You imagine long lines, no service and a flight crew who are barely civil. On the other hand, you think, how different could it be from the last flight you took on a major U.S. airline? For less than $600 round-trip to Long Beach, a 20-minute drive from Newport Beach, maybe it's worth a try.
It's time to shed your preconceptions about what low-cost, no-frills means today. JetBlue Airways is giving travelers more value for their money than any other airline flying. In the past, the absence of some amenities, such as onboard meals and roomier seats, might have been glaring differences. But many airlines have eliminated food service on domestic flights, and with the exception of American Airlines, they continue to pack as many seats as possible on their planes. So why not buy a sandwich before getting onboard, and in return for the standard legroom, get live Direct TV at your seat?
I recently flew JetBlue myself, and was pleasantly surprised. I bought my ticket online, and I arrived at the JetBlue check-in counter carrying a printout of my itinerary. I arrived 90 minutes before my flight time as a precaution because of the stricter security rules at the gate. About 15 JetBlue employees worked behind the counter. The five people in line in front of me were processed in less than three minutes, and I had my boarding pass within another three minutes -- even after checking in my bag. Five lines operated simultaneously as I passed through security, which expedited the process. With 75 minutes to go until my flight, or 15 minutes after arriving at the airport, I was reading a newspaper in the waiting lounge. I stayed in front of the security gate to watch as a multiple flight departure crunch approached, just to be sure I hadn't gotten lucky and beaten the crowd. No lines ever built up.
How did they do it? David Barger, president and chief operating officer of JetBlue, explains that part of the strategy is staying focused on the airline's business plan: keep things simple. Using People Express, a failed no-frills airline in the early 1980s, as an example, Barger said the company began to falter when it tried to take on the bigger airlines. He added that People Express expanded beyond its original 727 fleet and began flying 747s on transcontinental and trans-Atlantic routes. It was a disaster, and the company was on the verge of bankruptcy when it was bought by Texas Air in 1986.
"We have been the most well-funded start-up airline in history," Barger said, just a couple of days after investors jumped on the JetBlue bandwagon in April, pushing the company's IPO stock from a $27 opening price to close to $45 on the first day of trading. Barger also said that JetBlue only flies Airbus A320s. It has 24 Airbuses, and the firm plans to use some of the proceeds from the IPO to expand the fleet. Due to the newness of the planes, and the ease of maintenance created by having only one aircraft type in the fleet, JetBlue flew its first 1,100 flights without a cancellation. Furthermore, it achieved an 84.5 percent on-time performance in 2001, the highest in the U.S. airline industry, according to the U.S. Department of Transportation.
Barger acknowledged that JetBlue benefits from having a non-unionized staff, rare in the airline industry. But he believes the company will maintain a good relationship with its employees. "We have been paying slightly higher than market wages, and providing top-notch benefits," he says. "If we can create an environment where we can keep our planes in the air 13 hours a day versus our competitor, nine hours, we win."
But Barger knows that he must maintain the level of service and performance to keep JetBlue's growth prospects on track. "One of the big failures of past airline start-ups is they started to believe their own press. We know we're only as good as our last arrival. And, if you're going to have an airline, you'd better hit the center line on the runway every time."
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