Long Beach = Waterloo

[enilria]

I think Long Beach is the beginning of the end for Jet Blue''s high flying image. Here are my reasons:
1) They coincidentally announced they may lose money during the quarter that the LGB focus city opens.
2) They are already in a fare war with WN before they''ve even started flying.
3) Unlike JFK, there is no incentive to start using LGB. New York had no low-fare airport. Passengers have deserted LGA in droves since Jet Blue opened JFK. Why would passengers leave ONT/BUR/LAX/SNA all of which have low fares? Further, WN will not let Jet Blue do this because they can compete with them.
4) The whole strategy is half-baked. Instead of flying a reasonable network from LGB to underserved markets they dove into the most overserved markets in America. There are 71 roundtrips from LAS to the Los Angeles area, 38 of which are flight by WN.
Thoughts?

 

[Jeff G]

I think that the current LGB strategy is a holding action until more lift is delivered. I don't think this is an attempt to capture the intra-CA or LAS markets. They just happened to be the most convenient short-short hauls available in order to consume and hold slots. I doubt the LGB network in two or three years will resemble the current one at all.

The very worst thing that could happen at LGB is that JetBlue won't make a dime on any of the new routes. In that case, about 5% of the airline goes down the drain. It won't affect the rest of the network, which is doing well. It's not an ideal situation, but not a disaster either. Give it a year, and then see who's right.

 

[JFK777]

I think JB will fly to FLL, IAD, and other east coast points. From FLL they will fly to the west coast just because they can't possibily fly from FLL to JFK any more then they are, 10 a day last I saw.

 

[N305AS]

jetBlue's current strategy with shorthauls to/from LGB isn't to make money, but to lose as little as possible. They KNOW they're going to take a financial hit, but to them it's worth it in the short term to deprive AA and AS from those slots at LGB. Since the only way to keep them is to use them, they've got to find the most cost-effective way to do so.

Now, they don't currently have enough planes to do the longhaul service they'd like, so they have to cover the daily allotment of slots via multiple shorthauls to and from LGB. This means taking on insane propositions like LGB-OAK and LGB-LAS, going head-to-head with WN. But it's not really that crazy, if you think about it. The reason? They'd even fly these planes empty if that were the only way to keep the slots, so they take on WN and make a name for themselves (even if it is just as the airline picking a fight with the 1,000lb gorilla), along with getting a little revenue by taking on passengers to cover some of their costs.

So in the end, they're losing money...but not as much as they could by simply letting the slots go, or retaining the slots by flying a lot of empty planes around.

The only question remaining is this:

Do they manage to survive long enough to get all the airplanes they need to turn those LGB-LAS and LGB-OAK shorthauls into an equal number of longhauls that MAKE them money?

 

[Oliver Stone''s Apprentice]

The very worst thing that could happen at LGB is that JetBlue won't make a dime on any of the new routes. In that case, about 5% of the airline goes down the drain. It won't affect the rest of the network, which is doing well.

No, the very worst thing that could happen at LGB is for WN to decide to immediately start flying LAX-FLL nonstop (they already fly it one-stop), and perhaps a few other choice routes that would be intuitive for B6 to start flying when they have the aircraft...

 

[AAG2000]

No, the very worst thing that could happen at LGB is for WN to decide to immediately start flying LAX-FLL nonstop (they already fly it one-stop), and perhaps a few other choice routes that would be intuitive for B6 to start flying when they have the aircraft...
----------------

I agree that, to the traveling public, it's a toss-up between WN and B6 on short-haul routes like LA-LAS and -OAK. In fact, loyalty to Southwest might even be an initial hindrance to JetBlue. I also agree that, if AA hadn't forced JetBlue's hand, they might never have served those routes out of LGB, or at least not so soon.

However, when it comes to long-haul flights out of LGB, I don't think JetBlue has any reason to fear competition from Southwest. Who in their right mind (aside from a few hardcore Southwest fans--I know you're out there!) would choose a WN cattlecar when, for the same price, they could have a leather seat with live TV? I hate to sound like a JetBlue commercial, but when you're sitting in a tube for 5+ hours, these things really do make a difference.

 

[KCFlyer]

However, when it comes to long-haul flights out of LGB, I don't think JetBlue has any reason to fear competition from Southwest. Who in their right mind (aside from a few hardcore Southwest fans--I know you're out there!) would choose a WN cattlecar when, for the same price, they could have a leather seat with live TV? I hate to sound like a JetBlue commercial, but when you're sitting in a tube for 5+ hours, these things really do make a difference.

Any SWA flight lasting 5 hours would most likely be on a 700, which most likely would have leather seats. And I dunno...5 hours with TV could numb the mind. Besides, SWA would serve a snack pack, which is a bit more substantial than blue potato chips.

 

[Get Over It Already]

The days of the cattle car ended when Southwest got the 737NG. Sure, some of the older aircraft are still cattleish, but more and more of them are quite tolerable at 33 and 34 inch pitch.

 

[MrMarky]

Who cares about leather seats? How does this make it more comfortable? If you ask me, fabric seats are more comfortable, they don't induce sweating like leather, and they aren't cold.

On the non-reconfigured WN aircraft, they strangely only have leather seats in the club seating sections. This is especially stupid. If you're sitting backwards on takeoff the leather seat cushions encourage your rear end to try and slide forward out of the seat -- very uncomfortable. The cloth seats give you a much better grip.

 

[Farley]

How many times can we miss the point on LGB? A lot, apparently. As the more attentive posters have mentioned, this was merely meant to hold the slots that were in contention. Do you think that the guys that have made all of this happen suddenly went brain-dead? Keep hoping, but it isn't going to happen.

And doomsday if WN chooses to fly coast to coast? Nope. I've commuted coast to coast, and a 737 will never be as roomy as an A-320. The airplanes just provide different opportunities to each carrier. It's mostly those with a not-too-well-hidden agenda who hope that B6 and WN will destroy each other so that they (they know who they are) can get back to the business of screwing travelers with high fares.

 

[KCFlyer]

Farley - I don't view the "Waterloo" reference as an indicator of JetBlue's future, but I do see it being a "Waterloo" of sorts in regard to their stock price. Wall Street is betting on the great margins that they have seen so far. If LGB impacts that profitability even a small amount, the stock's going to get punished. As far as long hauls and aircraft types - I've flown longer hauls in a 737 as well as a DC-10,767,L1011, and MD80, and quite honestly, I didn't notice any significant comfort difference between any of those aircraft.

 

[PLANES333]

Keep in mind that B6 has a higher casm than WN. It costs B6 about 9 cents to fly one passenger one mile. Last time I checked it costs WN around 8 cents to fly one passenger one mile. DL which has the lowest cost structure of all the majors has a casm of about 10.11 cents. If B6 thinks that it can go up against WN in the short haul market they are nuts. B6 is brand new and there costs will only increase over time, WN has been around for 30 years, there cost structure is much more stable. Does anyone remeber MUSE AIR? They tried to go up against WN in TX and got there A$$ whipped big time. I think B6 should go back to there origional business plan and stick with JFK. After all it is when start-ups gt off there origional plan that they start messing up.

 

[KCFlyer]

Does anyone remeber MUSE AIR? They tried to go up against WN in TX and got there A$$ whipped big time.

Actually, they got bought out by LUV back around 1987.

 

[Rhino]

Planes333, I believe JB CASMs are lower than SWA's. 6.8 to 7.6 or thereabout. JB's low-yield red-eyes lower their CASMs somewhat unrealistically, but with demand outstripping aircraft, JB must believe this is necessary.

KC, JB's aircraft are significantly more suitable than WN's for transcon. The 320s are faster and roomier. Those TVs really make a difference on a long trip.

In short haul, SWA should have an advantage. More flights and a far superior FF program.

SWA will not make the mistake of underestimating JB. JB provides a superior product at an competetive price.

 

[lowfareair]

Southwest has 3" better seat pitch than JBLU. If I'm going to be in a plane for 5-6 hours, I'd rather have a WN plane where I can have a little more legroom, and either bring a book or a portable DVD player if i really need IFE. Then I know what I will watch before I'm in the air.