JetBlue spent the past several years teasing the idea of transatlantic flying. The company believes its Mint business class service could clean up in a market that sees high fares and relatively limited competition. Alas, it remains a dream in many ways. At today’s investor briefing multiple executives were clear that the option to convert A321 orders to the LR variant for such services remains available. And also that it is not yet executed and such a “distraction” is not welcome at this time.
Part of the delay in making that decision stems from the engine issues associated with the A320neo family of aircraft. Passing on those to keep the delivery pipeline running smoothly was almost certainly the correct decision for the carrier as it continues to grow and compete in a heated domestic US market.
“We have many more opportunities than we have assets [aircraft].” In 2019 you’re going to see a “pretty aggressive reallocation” of the fleet. – EVP Commercial and Planning Marty St. George
But JetBlue also believes there is still plenty of runway (yes, EVP Commercial and Planning Marty St. George used that pun in his remarks) to grow and allocate its current assets (i.e. airplanes) within the existing route footprint. Some of that reallocation comes from reducing flights within the west coast. Those draw downs already started. More changes are yet to come.
$JBLU President/COO Joanna Geraghty says that all core A321 layout is currently the best use of capital. Another hint that TATL isn't coming any time soon. And also that Mint may be stable for a couple years. #PaxEx #AvGeek
— Seth Miller (@WandrMe) October 2, 2018
COO and President Joanna Geraghty opined that the all-core A321 (200 seat configuration) is currently the “best use of capital” for the airline in the near term on deliveries. Getting the LR would require a conversion away from the existing Core order plans; the company is not interested in incremental aircraft orders at this time. And it is also not interested in a twin-aisle option, though Airbus continues to push the A330neo as a viable solution for the TATL markets.
And maybe a twin aisle is the correct choice, though more likely something in the NMA/797 size range than the A330neo range. JetBlue is still a relatively small carrier and the rapid growth needed to fill a larger twin across the Atlantic would almost certainly mean eroding some of the fare premium the carrier likes to brag about in its key northeast markets of Boston and New York-JFK. Still, landing slots at the higher demand European airports are hard to come by. If the company is forced to buy or lease them at market rates it would be challenging to pay off that expense at 16 premium seats per trip.
But all of those challenges and reasons pale in comparison to CEO Robin Hayes’s comment about fleet status during the investor briefing. The company’s top priority right now is bringing the A220 into the fleet, “We can’t allow anything to distract us from that.” This suggests that the earliest the company might fly across the Atlantic is after the A220s are operating smoothly within the network. That’s a 2021 horizon at this point.
And, once again, "no decisions today" on TATL service. Robin Hayes points out that A220 introduction "must" be the priority for the company as new products go, and that's a 2020 timeframe. So if $JBLU goes TATL seems unlikely to be before that. #PaxEx
— Seth Miller (@WandrMe) October 2, 2018
Junior Mint on the A220?
The Q&A session at the end of the briefing brought out a new bit of product detail. When asked about a Premium Economy offering (i.e. domestic first class) St. George revealed that the carrier considered “Junior Mint” option that would fit that bill. It was to be targeted at secondary transcon markets and offer some improved comfort on the longer flights, particularly compelling given that many are redeye turns. Alas, the operational complexity of working that in to the A320 rotation proved too complex to meet the carrier’s need. With the A220’s impending arrival, however, that story could change.
The A220 is set to replace the E190 frame-for-frame but the markets it serves will be different. JetBlue has stated multiple times since the order was placed that the carrier expects to take advantage of the increased range the A220 offers relative to the E190. The A220 can deliver transcon services, for example. And JetBlue specifically said that certain secondary transcon markets could be attractive with the aircraft. A true Mint cabin in the A220 fuselage would be harder to deliver the desired economics with given the reduced space. But a 1-2 or 2-2 premium economy layout for a few rows could be compelling. And the significantly improved overall efficiencies of the A220’s fuel burn and other trip costs could make that a strong play a couple years hence.
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