The JetBlue route map should look very different later in 2019 compared to today. That’s the message EVP Commercial Marty St. George delivered during last week’s investor briefing. While transatlantic operations are not to be had in 2019 – such “distractions” are not welcome at this time – the current route network will also not remain untouched. At risk of change are several destinations in the Midwest, as well as some smaller markets on the East Coast.

These tipped changes follow in the path of shifts seen at Long Beach and announced earlier this year. At the carrier’s west coast focus city a number of frequencies dropped outright and seasonal service added to cherry-pick higher revenue opportunities. That attitude was reemphasized during the investor briefing, with JetBlue pointing out 44% of total air revenue in the US is generated touches the East Coast. The Midwest routes today are part of that but they are also longer flights with higher fuel burn. In short, they are less effective use of the aircraft.
As we think about how we deploy our capital – and by that I obviously mean aircraft – we are always looking for the best use of the asset. Given our size, we have a long list of accretive opportunities in our primary focus cities, many more opportunities than we have assets. In 2019 you’re going to see us pretty aggressively redeploying aircraft across our network. You saw the first round of that which we announced late last year at Long Beach. There will be more to come as we go in to 2019. We’re going to see approximately 100-120 million of revenue benefit from this reallocation…and accelerating the primary focus city growth by reallocating underperforming flying. – EVP Commercial & Planning Marty St. George
It is also worth noting that a schedule extension anticipated for the end of September was delayed. The timing of that extension was relatively consistent the past six years so this miss suggests the rework is still in progress and could affect stations starting as early as Q2 2019.
Searching for cuts
Reviewing JetBlue’s domestic destination list shows a few Blue Cities that sit in the middle of the country with limited service today; these are the routes more likely to be affected. Albuquerque and Phoenix are redeye only routes. And mid-con redeye service tends to not deliver great yields. It is utilization flying; the plane would likely be idle otherwise. But as fuel prices creep higher it becomes more useful to park the plane overnight rather than fly it on a route that cannot support the fixed costs. Some of these trips could be more feasible as the A220s come online and the company has spoken about using them in longer, thinner domestic markets. But for the A320s it is hard to make the numbers line up.

Other Midwest markets like Dallas and Houston theoretically drive a larger business traveler market but reports have them as underperforming these days as well. At least they aren’t redeye-only. Newer destinations like Minneapolis-St. Paul will likely be given a bit of breathing room to mature before adjustments would be made.
Read More: JetBlue pushes TATL further away, teases “Junior Mint” cabin
Smaller markets within the East coast region could also see cuts or more aggressive seasonal shifts. Among the destinations rumored to be under scrutiny are two in New England – Burlington, VT and Portland, ME – and two in Florida – Sarasota and Daytona Beach. The Daytona route is arguably the most at risk with a single daily flight not particularly well timed for connections. Sarasota already sees some seasonal shift in demand and competition and could be pushed further down that path. The two New England towns drive more connecting traffic than other JetBlue destinations. And given limited slots at JFK and a desire to “gain relevance and scale” at the east coast focus cities swapping them out for more higher yielding nonstop traffic could prove valuable to the company.
The Dulles operation is also rumored to be under review, given the company’s growth at DCA to handle its DC-area flights.
A different model
JetBlue’s model focuses far more heavily on nonstop traffic rather than connecting flow. More than 80% of passengers fit that category. And the route network that those passengers need is very different from those at larger, legacy carriers. St. George is clear that there is plenty of room to grow the operations. “We have an underdeveloped network. We have so many opportunities to continue to grow the network in our three primary focus cities… Our network strategy is about being targeted where we grow, while also developing network diversification.”
Of course, prior efforts were also targeted. But shifting economics demand that the network adjust as well. Getting to the right level of scale to meet those goals means big changes in the year ahead.
Leave a Reply