JetBlue’s schedule growth this week at its Boston focus city aims to attract more business travelers with near hourly service to key markets and increased frequencies on a dozen routes. But frequencies are not the only things that keep passengers coming back. Reliable operations matter a lot and JetBlue often comes up short on that front relative to its peers. In a message sent to Boston-based employees this week the carrier outlined four adjustments it intends to make to its Boston operations – separate from the new flights – to address its reliability issues.
Adjusting Aircraft Routings
More JetBlue planes will fly out-and-back routings to and from Boston rather than rotating through the JetBlue network. By isolating more planes in the Boston hub the company reduces its exposure to weather or ATC delays elsewhere in the network (e.g. the New York City area). But this also means less efficient overall aircraft utilization, ticking the operating costs up.
Isolating planes to hubs is not unique to JetBlue. United Airlines performed a well-publicized and comparable adjustment in its operations in late 2015 for similar reasons, though United’s shift focused on all hubs, not just one. When Southwest Airlines launched service at LaGuardia it similarly isolated its aircraft to avoid cascading delays. And, like United, as it became more comfortable with managing the overall operation the isolated fleet was worked back into more efficient routings.
Increasing Block Time
JetBlue’s schedules in Boston are soon to be more “robust,” and not just in the number of flights or routes served. The carrier will add up to five minutes of additional padding to its scheduled Boston flight times in hopes of improving its on-time performance. Schedule padding is a somewhat controversial approach to solving on-time performance. In the Q3 ’18 earnings call President & COO Joanna Geraghty spoke about the carrier’s on-time woes and identified several efforts to resolve them while also noting that “… just adding block does not solve ATC challenges.”
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At some point increasing block times also causes issues with connecting schedules. JetBlue’s heavy share of passengers who do not connect on flights helps alleviate that issue. But the carrier will likely find itself penalized in third party sales channels if trip times start to exceed competitors significantly. Most GDS solutions use travel time as one of the factors in scoring flights as they determine the display order of search results. Price can overcome that, but JetBlue’s goal with these moves is to increase yields, not reduce them.
Aircraft Buffer Time
Block times aren’t the only place JetBlue is adding buffers. The carrier will also give some aircraft as much as an extra hour scheduled on the ground at Logan Airport in the afternoon before sending them back out. If the schedule padding is insufficient and the planes are still delayed getting in to Boston this move helps increase the odds that the next departure will still go on time. Similar to the routing and block time adjustments this move reduces aircraft utilization. It also potentially decreases the number of departures each gate can handle. That could hurt long-term growth of the Boston operation, should the program remain in place for an extended period.
Increasing Tech Ops Time
One move that should help reduce the time aircraft need on the ground is the reinstating of “meet and greet” of each inbound aircraft by members of the maintenance team. This program was trimmed as part of previous cost-control measures. In the message to staff the company notes, “Although this does represent a cost increase, we believe that the extra direct access to the aircraft will help us improve fleet health and our operation.”
The meet and greet needs should hopefully decline over time as JetBlue completes the interiors retrofit of its A320 fleet. The high-touch work required to keep those planes held together years after their expected refurbishing should not be underestimated.
Creating the “Right” value
These moves all come with a financial cost to the carrier. Given the recent focus on cost-cutting initiatives across the company this shift is telling, and it may give Wall Street pause. But it is also almost certainly the right decision.
Cutting so much that the product suffers can backfire for a company. Today JetBlue is acknowledging that challenge in parts of its Boston operation. Passenger confidence in the operation will deliver better revenue and offset the increased costs, though the typical lag associated with that shift will prove a test for the carrier.
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