JetBlue TrueBlue - "enhanced front cabin product"/"changed configuration"

This was mentioned in the the quarterly conference call today. There was some mention of a "changed configuration", but it was quite clear that there would be no reduction in the number of seats (currently 150).

It will be announced in the 2nd quarter of this year.

This was mentioned in the the quarterly conference call today. There was some mention of a "changed configuration", but it was quite clear that there would be no reduction in the number of seats (currently 150).

It will be announced in the 2nd quarter of this year.I would assume something like leather seats, wider armrests, bigger PTV's, etc. in order to start marketing the front of the bus as a definable premium product.

It's a good idea.

I would assume something like leather seats, wider armrests, bigger PTV's, etc. in order to start marketing the front of the bus as a definable premium product.

It's a good idea.

Actually, I would assume none of these things.


If they are going to roll it out this year it is probably something they can do with minimal interference with the fleet. There is a sense from Barger that they haven't been maximizing what they already have (i.e. 36" legroom). He noted in the conference call that the increased phone res fees and change fees yielded 50% more revenue this year. My guess it'lll look something like a $15 to 25 additional fee for pre-boarding, a free drink, free movie, guaranteed extra legroom. When internet happens, it'll be part of the offer.

This was mentioned in the the quarterly conference call today. There was some mention of a "changed configuration", but it was quite clear that there would be no reduction in the number of seats (currently 150).

It will be announced in the 2nd quarter of this year.

They could remove the middle seat from the first three rows. (Replace the remaining 12 seats with something bigger?) Use the formerly middle seats from the first three rows to create an extra row in the back by reducing the 34" pitch to whatever.

Voila, the number of seats stays the same and there's a more defined feel to the up front section.

They could remove the middle seat from the first three rows. (Replace the remaining 12 seats with something bigger?) Use the formerly middle seats from the first three rows to create an extra row in the back by reducing the 34" pitch to whatever.

Voila, the number of seats stays the same and there's a more defined feel to the up front section.

You lose about an inch of pitch if you distribute it across the other 27 rows that you're keeping. The front three at 36" pitch and "typical domestic F" widths is almost competitive, though most carriers have slightly more pitch in their domestic F cabins. The rest of the cabin at 33-35" isn't terrible, though I'm sure there will be issues with alignment at the exits. And you'd have a typical domestic F cabin. Or were you planning on marketing it differently?

The 320s are getting new seats. Beyond that I don't see a first or business class being introduced unless this deal with Lufthansa is more indepth than we know about.

The 320s are getting new seats.

For anything in particular? Are they getting the bigger screens for the PTVs?

There seem to be a lot of maintenance cycles on the seats considering the planes are all being acquired brand new.

I think the new seats are lighter and more robus and will require less maintenance and upkeep. There for saving weight and maintenance cost. I think the seats will resemble the seats on the 190.

Actually, I would assume none of these things.


If they are going to roll it out this year it is probably something they can do with minimal interference with the fleet. There is a sense from Barger that they haven't been maximizing what they already have (i.e. 36" legroom). He noted in the conference call that the increased phone res fees and change fees yielded 50% more revenue this year. My guess it'lll look something like a $15 to 25 additional fee for pre-boarding, a free drink, free movie, guaranteed extra legroom. When internet happens, it'll be part of the offer.OK. If that's the case, it's really just an issue of adjusting the price points not changing the actual product.

I think it makes a lot of sense to charge a premium for the more premium product. B6 may have started out as a carrier catering to leisure travelers, but many business travelers (myself included, 95% of my business on B6 is for business) are now flying and appreciating B6.

Most of us would be willing to pay a reasonable premium to sit in the front of the bus.

I wonder if the same initiative will apply to the E-190's, or only the A-320's?

I hope they don't mess with the front cabin, that is the area I usually sit in.

I think it makes a lot of sense to charge a premium for the more premium product. B6 may have started out as a carrier catering to leisure travelers, but many business travelers (myself included, 95% of my business on B6 is for business) are now flying and appreciating B6.
I wonder if the same initiative will apply to the E-190's, or only the A-320's?

He specifically was talking about the A320 front-of-cabin and there was no mention that the E190s would be part of this offering. It raises the question as to who this "premium" value would benefit. I would think the more likely business flyers would be on routes that are E190-centric.

It seems they do want more from the business traveler, and that is definitely the emphasis with the refundable fares and the promotion of CompanyBlue. My sense, however, is that there is a bit of an identity crisis, and one of the analysts seemed to ask a pointed question about it. Namely, their biggest ASM increases were the Florida and Carribean routes. When asked about the transcons, Barger said they were "holding their own"...not a ringing endorsement for their health or strength IMO.

In fact, part of the reason they were "holding their own" was the pride Barger seems to take in that they can change the capacity on these routes by not running them daily and/or with consistent frequency. I just don't think you can operate a business-friendly airline with routes that don't have the predictability of daily service.

Its ultimately what is feeding into my sense that the "premiumness" of the front of an A320 cabin will only be on a "when available" basis, subject to the use of the right aircraft...and if you want to sit in the front, you will pay for it.

(By the way, another thought I had....perhaps full rollout will correspond with the Fall schedule being released. If people are already booking seats in the summer, I would think there might be issues if the premium stuff was being done with people who didn't pay for it at the front of the cabin.

OK, whatever happens...I am confident that our friends in the Forest Hills office are reading this forum on a regular basis.

PLEASE, coming from jetBlue biggest fan - DO NOT kill the "No first class seats, no second class citizens" attitude. JetBlue is a domestic carrier with a superior, one-class product. Maybe something is needed to attract international feeds from the (two) current "partners" but another 'class' is simply not needed!

As far as the new seats go, I hope it's those thin ones like Virgin America has. I just don't get why jetBlue waited so long, even after retrofitting each cabin with: 1. new TV screens, 2. XM radio, 3. removing a row of seats! This should have been done a while ago...but better late than never ^

Maybe some of the current seats will be sold on ebay? :D

PLEASE, coming from jetBlue's biggest fan - DO NOT kill the "No first class seats, no second class citizens" attitude. JetBlue is a domestic carrier with a superior, one-class product... I've got to say I agree with that. I just flew SEA-BOS-SEA this week... out on UA, back on B6.

I have no status on UA, so was sitting in the second row from the rear, relegated to the last "boarding group" and got no shot at bin space, and was crammed into a small short-pitch coach seat with my feet on my briefcase for five hours.

I have no pull on B6 either, but came home in seat 2D with 36" legroom, no status-based boarding order or frantic jockeying for bin space, etc.

The two tickets were close in price (B6 $10 cheaper). B6 is by far the more welcoming experience. I am all for loyal frequent flyers getting good treatment, but on UA a no-status customer can easily pay a premium price and be made to feel a second-class citizen. I like JetBlue's rejection of that value system.

One class, standardized everything is one of the reasons I love B6. I love the simplicity, the ease of use, of just about everything JetBlue offers. Nothing is superfluous, nothing is extravagant -- and that's the way it should stay. It keeps costs low, and people happy. Even the TrueBlue system is extraordinarily simple.

I think B6 needs to spend more time focusing on ways to cut costs rather than increase revenue. If you cut the costs in an efficient way that doesn't infringe on customer convenience, the revenue increase will come naturally.

One class, standardized everything is one of the reasons I love B6. I love the simplicity, the ease of use, of just about everything JetBlue offers. Nothing is superfluous, nothing is extravagant -- and that's the way it should stay. It keeps costs low, and people happy. Even the TrueBlue system is extraordinarily simple.

I think B6 needs to spend more time focusing on ways to cut costs rather than increase revenue. If you cut the costs in an efficient way that doesn't infringe on customer convenience, the revenue increase will come naturally.

This is exactly the dilemma that Southwest Airlines faces. Southwest just began offering priority boarding (not premium seating per se) at a fare premium, and boy did they catch flak for it. Customers turned purple with more intense versions of what caphis posted here.

My take: Sure, egalitarianism gives us a warm feeling. But in the end, most customers make their decision on price. The airline needs to pay high fuel costs somehow. Which airline will win: the one that gets most of the extra money from premium fare passengers or the one who tries to sell a slightly higher fare to everyone? I think the former will win, because people will buy the cheapest ticket they can find. I am confident that this is Southwest's reasoning, and probably JetBlue's as well.

If all customers agreed with caphis and were willing to back that agreement by paying higher fares, premium products would not be under consideration.

One class, standardized everything is one of the reasons I love B6. I love the simplicity, the ease of use, of just about everything JetBlue offers. Nothing is superfluous, nothing is extravagant -- and that's the way it should stay. It keeps costs low, and people happy. Even the TrueBlue system is extraordinarily simple.

I think B6 needs to spend more time focusing on ways to cut costs rather than increase revenue. If you cut the costs in an efficient way that doesn't infringe on customer convenience, the revenue increase will come naturally.

I disagree with you on costs v revenue.

Problem is, there aren't very many more costs that can be cut. Fuel is essentially uncontrollable, Airbus and Embraer aren't gonna give away airplanes and employees gotta eat. Airports are busting at the seams and aren't gonna give away space or landing rights. So where are you gonna slash costs? I guess you could configure the A320s to their FAA-certified maximum seating capacity, as that would theoretically lower CASM. But that might interfere with revenue (as everyone flees the 28-29 inch pitch and flies other airlines).

Revenue is what CAN be increased by convincing consumers there's more value.

Here's the problem: Neeleman and Soros, dreamers that they are, thought there was room for another low-cost, low fare and low-frill airline. To some extent, they were right. JFK was somewhat under-utilized in the middle of the day (after overnight arrivals and before evening TATL departures). And fares to BUF and ALB and other nearby NY destinations were rather high. And B6 was met with instant success.

Then they lost their collective minds. They ordered hundreds of new airplanes and embarked on a growth trajectory that would place B6 as the second or third largest airline in record time.

Then reality set in. Instead of forever remaining under $20/bbl, oil has climbed to near $100/bbl. Passengers have grown accustomed to some frills as legacies match jetBlue's prices. B6's debt exploded and revenue growth slowed. Had B6 embarked on slow, measured growth, this reality might not have been pushed to the front. But instead, the finale to meteroic growth saw the airline sell a 19% stake to LH for a measly $300 million in a bid to raise cash.

All the while, of course, expenses continued to grow. Airplanes naturally get more expensive after the first few years as the maintenance bill must be paid. Employees tend to demand more and more money as they gain experience. All those other expenses I mentioned above continue to climb.

There's only one way out and that's through revenue growth. And unfortunately, as flying gets more expensive, demand will be impacted. Fewer people will buy tickets as they get more expensive.

So how to help close this funding gap? One great way is to price the ticket nice and cheap to get the passengers onboard and then to fleece them as best you can through additional charges. Sell them stuff. Hawk things onboard. Separate them from their wallets without making them angry.

Continue to focus on costs? That's not gonna work - and Barger said the other day that B6 hopes to increase unit revenue by more than 10% this year. THAT's the ticket to profits.

... they lost their collective minds. They ordered hundreds of new airplanes and embarked on a growth trajectory that would place B6 as the second or third largest airline in record time.

I agree with you there. I have no idea what they were thinking. The PeoplExpress parallels are eerily apparent to me -- a strong niche player suddenly shooting for industry dominance on a shoestring -- and we know what happened to them.

There's only one way out and that's through revenue growth... One great way is to price the ticket nice and cheap to get the passengers onboard and then to fleece them as best you can through additional charges. Sell them stuff. Hawk things onboard. Separate them from their wallets without making them angry. I think that's a very cogent analysis.

The mainline carriers have alienated loyalists by eliminating small but symbolically important amenities (pillows, for example) in the name of cost-cutting, and I think it's been counterproductive. NW may have saved a few bucks by clearing out the blankets and pillows, but the NW product is repositioned in my mind as barren, stingy and unpleasant, and I don't go out of my way to book NW any more, miles or no miles. B6 is now perceived as a superior economy product at an equal or lesser price, and they should not erode that position.

It matters, however, how you design strategies to realize incremental revenue. I am happy to have B6 swipe my card onboard to buy three cold Heineken Lights for $15 and in fact like the no-cash model. I would never pay B6 $15 extra for an aisle seat, as NW demands. They have to be careful not to dilute the "JetBlue experience" in the process of scoring those extra dollars.

There's only one way out and that's through revenue growth. And unfortunately, as flying gets more expensive, demand will be impacted. Fewer people will buy tickets as they get more expensive.

So how to help close this funding gap? One great way is to price the ticket nice and cheap to get the passengers onboard and then to fleece them as best you can through additional charges. Sell them stuff. Hawk things onboard. Separate them from their wallets without making them angry.

Continue to focus on costs? That's not gonna work - and Barger said the other day that B6 hopes to increase unit revenue by more than 10% this year. THAT's the ticket to profits.


I agree with you that revenue is the key. JetBlue has built a decent brand, but I'm getting increasingly unsure of where it's going.

One of the problems I think the legacy carriers are facing is there are at least two models for operating an airline. The Southwest solution seems to work well for short hops - it's fast, efficient, quick turn round, relatively flexible if I miss a flight, and the service is friendly but not extensive.

Unfortunately that doesn't work so well if I want to fly half way across the US, or internationally. Beyond a couple of hours the on-board service and space become increasingly important.

IMO one of the issues carriers like AA face is they use the same flights to run short hops and to feed passengers onto expensive long haul flights. One group has a little more time and is looking for more service, the other has different priorities. One solution I've wondered about is for AA to push it's shorter services into American Eagle and run that on a Southwest model, while deliverately boosting the quality and achieveable revenues from it's seperately branded premium mainline & international flights.

Where does that leave JetBlue? My sense is it doesn't actually know what it wants to be when it grows up. Should it be focusing on short sectors and competing with Southwest? Or should it focus on longer sectors where it's newer planes, more room, TV's etc allow it to command good prices compared with the legacies mainline services. Ironically that would position it domestically in a similar way to Virgin Atlantic - high service but more youthfull and dynamic than those boing old legacy carriers - the image of BMW against the Buick.

If they do figure out what they'd like to be, and they decide to go down a 'longer haul' path, then it suggests they ought to push harder on attracting business travellers, start pruning a lot of shorter east coast and leisure focused services, but above all play up the quality they have and play down price.

IMO one of the issues carriers like AA face is they use the same flights to run short hops and to feed passengers onto expensive long haul flights. One group has a little more time and is looking for more service, the other has different priorities. One solution I've wondered about is for AA to push it's shorter services into American Eagle and run that on a Southwest model, while deliverately boosting the quality and achieveable revenues from it's seperately branded premium mainline & international flights.


The problem with this approach is that all those flights that get "pushed down" to the express carriers have worse service, smaller planes and less reliable schedules. Plus many of the people on the high margin International flights have to get to that gateway city somehow, and that usually means a connection on one of those "lite" carriers. It hasn't worked well yet for any carrier, and several have tried.

Problem is, there aren't very many more costs that can be cut. Fuel is essentially uncontrollable, Airbus and Embraer aren't gonna give away airplanes and employees gotta eat. Airports are busting at the seams and aren't gonna give away space or landing rights. So where are you gonna slash costs? I guess you could configure the A320s to their FAA-certified maximum seating capacity, as that would theoretically lower CASM. But that might interfere with revenue (as everyone flees the 28-29 inch pitch and flies other airlines).

I have to disagree with you there. While fuel ($930 million), maintenance, payroll, and airport fees are as consistent as death and taxes, they are not the only source of cost. B6 has the capacity to cut costs internally in many areas, which could drive Barger's 10% goal.

Revenue is what CAN be increased by convincing consumers there's more value.

The problem here is that once you provide premium value services, you admit defeat in the original business model of treating all customers the same. In my experience, the premium service seekers aren't flying B6. You want to draw them in? That's fine, but in the end, the cost of providing these services is going to be subsidized by the customers not paying for them. Once you introduce premium services, the concept of equality in customer service goes out the window, no matter what your ideals are. Suddenly, that person who paid for this and that becomes the "more retainable" customer. You've got people working to please the group of elite, and ignoring the loyal but cheap flyer. It's happened in every service industry. The voice that speaks up came from a crowd, where no one was indistinguishable -- suddenly, that voice comes from row 2 with a wad of cash in hand.

I agree that increasing revenue would be a great idea, of course. All I'm saying is that B6 has more to lose than other carries in this department, because B6 has made it a point in the past to remind everyone how everyone, every seat, every plane, every service is equal. That said, there are plenty of other ways to increase revenue.

YMMV, of course. :)

The problem here is that once you provide premium value services, you admit defeat in the original business model of treating all customers the same.

A tactical retreat, anyhow.

In my experience, the premium service seekers aren't flying B6.

They need to be.

You want to draw them in? That's fine, but in the end, the cost of providing these services is going to be subsidized by the customers not paying for them.

The idea is that the premium price covers MORE than the extra cost, not less.

All I'm saying is that B6 has more to lose than other carries in this department, because B6 has made it a point in the past to remind everyone how everyone, every seat, every plane, every service is equal.

That's very true. It's the same for Southwest, and they are already starting down this road after having thought about it long and hard.

in the end, the cost of providing these services is going to be subsidized by the customers not paying for them. Once you introduce premium services, the concept of equality in customer service goes out the window, no matter what your ideals are. Suddenly, that person who paid for this and that becomes the "more retainable" customer. You've got people working to please the group of elite, and ignoring the loyal but cheap flyer. It's happened in every service industry. The voice that speaks up came from a crowd, where no one was indistinguishable -- suddenly, that voice comes from row 2 with a wad of cash in hand.



If you look at international services it's certainly not the case that premium cabins are subsidized by coach, in fact quite the opposite. Every fully flat, "horizontal" business class seats only take up about 4x the space required for coach but they sell for 5-10x.

The problem with US domestic first is different. So far as I can see the legacy carriers were so desperate to keep their most frequent flyers in the early years of this century that they made it very easy for them to get "space available" upgrades. They are all slowly trying to sell more or those seats instead of giving them away, and you'll find any number of "elites" complaining about how they no longer feel "elite".

The position in Europe is quite different. There, for the most part, if you want to sit at the front of the plane in a bigger seat and get better food and booze, you buy a more expensive ticket. That's the model B6 ought to adopt, and they ought to make a real virtue of it. Hopefully, if they go down this path, Lufthansa can show them how to promote the exclusivity of the front of the plane.

I don't know if anyone else feels this way but I tend to pick a window seat towards the rear of the plane. Mainly because I like to board first to ensure I get a spot to put my carry on and Jetblue doesn't board by zones.

Sitting in the front is a little risky because people sometimes put stuff up as they pass by if they see the opening.

The position in Europe is quite different. There, for the most part, if you want to sit at the front of the plane in a bigger seat and get better food and booze, you buy a more expensive ticket. That's the model B6 ought to adopt, and they ought to make a real virtue of it. Hopefully, if they go down this path, Lufthansa can show them how to promote the exclusivity of the front of the plane.

I disagree with this. The front of the cabin on most intra-Europe flights operated by European carriers is typical domestic seating, occasionally with the middle seat blocked. The longer flights are much more like US longhaul flights with a "real" front cabin or two, but the short stuff (up to 3-4 hours, which is a transcon in Europe) generally is not that way.

The problem with this approach is that all those flights that get "pushed down" to the express carriers have worse service, smaller planes and less reliable schedules. Plus many of the people on the high margin International flights have to get to that gateway city somehow, and that usually means a connection on one of those "lite" carriers. It hasn't worked well yet for any carrier, and several have tried.

Is United better or worse for having Ted? I think what I'm arguing is these carriers ought to focus on where they can be successful and get out of the short haul business, except for a very few feeder services that they only run to meet the main long haul banks from their hubs. They don't actually have to own regional or 'lite' carriers.

All of this doesn't alter my opinion that B6 ought to be one thing or the other but not try to be both. Given the inertia and lack of creativity in places like AA, I believe the best opportunity for B6 is to get out of the short haul business as soon as it can and put its resources into beating AA, UA, DL etc. on longer business-heavy routes.

It seems the solution for JetBlue is simple. Follow the European business class concept. Using a moving curtain and a table that comes down from the middle seat they could use anywhere from row 1-8 as "business class". Depending on how many seats they sell they could within minutes convert the front section into 2x2 and simply serve a hot meal service, complimentary drinks, and waive the premium movie fee. This would increase revenue without hurting solely vacation flights which they need an only economy class setup.

I know this sounds crazy, but what B6 really needs is its own TATL capacity. I realize it is not in a position currently to invest in this area, but when the carrier has more cash it should acquire a dozen or so A-330 and start flying premium-quality Y TATL.

By Sept 2008 B6 will have the newest terminal at JFK with a fantastic feeder route system.

The increased RASM from TATL would be a huge shot in the arm.

Is United better or worse for having Ted? I think what I'm arguing is these carriers ought to focus on where they can be successful and get out of the short haul business, except for a very few feeder services that they only run to meet the main long haul banks from their hubs. They don't actually have to own regional or 'lite' carriers.

I agree that United wasted a lot of time and money with its "ted" nonsense.

All of this doesn't alter my opinion that B6 ought to be one thing or the other but not try to be both. Given the inertia and lack of creativity in places like AA, I believe the best opportunity for B6 is to get out of the short haul business as soon as it can and put its resources into beating AA, UA, DL etc. on longer business-heavy routes.

But I gotta disagree with ya about where B6 should focus. Should it attack the stronger legacies on their transcons and long-haul routes where coach yields are already very low? Or should B6 attack short-haul routes where yields approach a dollar per mile or more? My vote would be for the latter.

Last year, in its desperate attempt to turn the losses around, B6 cut some transcons. Even WN has cut back some of its nonstop transcons. Why fly a brand new airplane 6 hours each way, twice a day for an average fare of $150 or even $200 if you can fly it 1 hour each way, 10 times a day, at an average fare of $100? Or even $75? (hint - like how Southwest became such a juggernaut.)

I'm often wrong (recently I predicted that LH would run away from its bailout deal and that B6 would file a Ch 11 petition this spring), but IMO, B6's troubles stem in part from its foray into inefficient transcons where there were no significant yields to grab. B6 began flying short, high fare routes where it could make significant profits by charging half as much as its competition. Cities like BUF, ALB, etc. But East coast to Florida? Delta went bankrupt (in part) from flying far too much capacity to FLA.

Coach transcon seats aren't expensive on AA or UA or DL or CO. Even without jetBlue dumping all that capacity to BUR and LGB. The expensive transcon seats are the big wide ones up front, and B6 doesn't have any of those. Virgin America has promised to take on those legacies in both cabins - is there room for B6 to do so as well? My answer is a resounding "No."

As has been hashed about recently, many of these missteps can be traced to the far-too-rapid growth mistakes. Neeleman quickly lost sight of the reality that it's not about being large - it's about making profits.

I will be flying JFK-SJC in May and looked into both the lowest non-refundable fare ($318 + taxes & fees) or the refundable fares ($1,158 + taxes & fees).

For that kind of money I would skip the meager benefit of two more inches of legroom (34" is plenty) and just buy a Y-UP on CO for the same price with guaranteed upgrade to FC (assuming one is CO elite).

Why fly a brand new airplane 6 hours each way, twice a day for an average fare of $150 or even $200 if you can fly it 1 hour each way, 10 times a day, at an average fare of $100? Or even $75? (hint - like how Southwest became such a juggernaut.)

....

B6 began flying short, high fare routes where it could make significant profits by charging half as much as its competition. Cities like BUF, ALB, etc. But East coast to Florida? Delta went bankrupt (in part) from flying far too much capacity to FLA.

Coach transcon seats aren't expensive on AA or UA or DL or CO. Even without jetBlue dumping all that capacity to BUR and LGB. The expensive transcon seats are the big wide ones up front, and B6 doesn't have any of those. Virgin America has promised to take on those legacies in both cabins - is there room for B6 to do so as well? My answer is a resounding "No."


We're misunderstanding each other. I wrote:

"....should it focus on longer sectors where it's newer planes, more room, TV's etc allow it to command good prices compared with the legacies mainline services."

and

"I believe the best opportunity for B6 is to get out of the short haul business as soon as it can and put its resources into beating AA, UA, DL etc. on longer business-heavy routes"

and you assumed Transcons which was not my intention.

I'm in AUS. I can handle Southwest to HOU or DAL plus I take them to PHX because they're every bit as good as HP (sorry US) but what's important down here are decent services to the Bay Area, PDX, SEA, RDU, Southern California etc. The 3-4 hour AUS-SJC roundtrip starts at $300 if you buy it weeks in advance, but it's over $600 at less than one week and the walk up coach fare is, I believe, over $1,000. It seems like the Transcons are a mess, presumably because of over capacity, but there are a lot more 2-4 hours trips where the competition isn't strong and where B6's quality ought to win at a similar price level. I may be wrong but building a strategy based on either BUF-JFK or tons of leisure services to Florida sounds like hard work to me.

Is United better or worse for having Ted? I think what I'm arguing is these carriers ought to focus on where they can be successful and get out of the short haul business, except for a very few feeder services that they only run to meet the main long haul banks from their hubs. They don't actually have to own regional or 'lite' carriers.


Ted is way different than pushing the short-haul down to Express. I'd argue that Ted is a significant improvement over UnitedExpress operated by any of their affiliates. The problem is that the cost structure of Ted - which is much lower than mainline - isn't viable for a ton of markets out there. If the carriers all start ignoring the smaller markets completely they lose the ability to fill their long-haul premium product cabins.

The two most profitable areas in air travel are ULH Premium cabins and short-haul shuttle service. B6 is in the latter and doing OK with it in a number of markets. The rest of the service is a hodgepoge of who knows what trying to make something stick together. And B6 isn't going to get in to the ULH Premium service market, so they need to focus on the other one.

I'm in AUS. I can handle Southwest to HOU or DAL plus I take them to PHX because they're every bit as good as HP (sorry US) but what's important down here are decent services to the Bay Area, PDX, SEA, RDU, Southern California etc. The 3-4 hour AUS-SJC roundtrip starts at $300 if you buy it weeks in advance, but it's over $600 at less than one week and the walk up coach fare is, I believe, over $1,000. It seems like the Transcons are a mess, presumably because of over capacity, but there are a lot more 2-4 hours trips where the competition isn't strong and where B6's quality ought to win at a similar price level. I may be wrong but building a strategy based on either BUF-JFK or tons of leisure services to Florida sounds like hard work to me.

If B6 came in at the same price they'd have trouble winning customers, especially business folks, because those pax generally get upgrades and use their hordes of miles for better vacations than what B6 can offer. So B6 has to compete on price. And unless they come in with a ton of capacity (and I'm not sure how many free gates there are at AUS to let that happen) they're not going to have the convenient frequencies that the legacies offer.

If they don't compete on price they get marginal loads. If they do compete on price they get marginal yields. They can't win.

And the real money is in the shorter stage lengths, not the 1000-1500 mile flights. They can charge .8 the price and turn 2x more runs, which comes out to 1.6x more money (I just made those numbers up, but you get the idea).

And the real money is in the shorter stage lengths, not the 1000-1500 mile flights. They can charge .8 the price and turn 2x more runs, which comes out to 1.6x more money (I just made those numbers up, but you get the idea).

If this is true (as I believe it is), I wonder why the airlines have not figured it out already and changed their offerings (schedules or prices or both) accordingly. Economic theory says that rates of return should equalize, yet this situation has persisted for decades. Is the problem the artificial scarcity of gates, preventing some of the necessary changes in offerings?

If B6 came in at the same price they'd have trouble winning customers, especially business folks, because those pax generally get upgrades and use their hordes of miles for better vacations than what B6 can offer. So B6 has to compete on price. And unless they come in with a ton of capacity (and I'm not sure how many free gates there are at AUS to let that happen) they're not going to have the convenient frequencies that the legacies offer.

If they don't compete on price they get marginal loads. If they do compete on price they get marginal yields. They can't win.

And the real money is in the shorter stage lengths, not the 1000-1500 mile flights. They can charge .8 the price and turn 2x more runs, which comes out to 1.6x more money (I just made those numbers up, but you get the idea).


I see your argument, but it ignores one REALLY serious problem - Southwest. If B6 goes down the route you advocate they'll lock horns with WN in a short flight business where TV's and 36" seat pitch aren't valued so highly. I know who I favour to win that battle.

B6 really needs to find itself a different niche, and unlike you I don't think they'd have that much of a problem taking business from AA on some routes - I'd use them because certainty of the legroom is much better than upgrades that are hard to get - they really are a lot harder to get than you suggest, and there are a lot of people who fly once a month on these routes who will never get close to elite status.

If this is true (as I believe it is), I wonder why the airlines have not figured it out already and changed their offerings (schedules or prices or both) accordingly. Economic theory says that rates of return should equalize, yet this situation has persisted for decades. Is the problem the artificial scarcity of gates, preventing some of the necessary changes in offerings?

It's possible the legacies are pushing down the cost of the Transcon coach fares to hold on to market share - as a guide typical prices JFK-LGB are lower than JFK-AUS despite the much greater distance. The legacies can cope with the low prices for a while because they can and do sell premium tickets on the Transcons, plus they have a lot of other routes that are in effect subsidising their price war. B6 doesn't have those buffers which is why it sees longer sectors as being only marginally profitable.

B6 really needs to find itself a different niche, and unlike you I don't think they'd have that much of a problem taking business from AA on some routes

I very much agree, for one big reason: Frequent flyer miles have become nearly unusable for the non-elite, non-obsessive customer.

IMHO the legacy carriers have shot themselves in the feet with a greedy short-term strategy of devaluing their miles. People are dropping out of the programs when they try to redeem an award and find entirely reasonable requests (midweek travel months in advance) impossible to fulfill. Heck, even some FTers have given up on the legacy miles game. (I will take a 25k credit card bonus, but other than that, forget it.)

Without an enticing FF program to lock in customers, a legacy carrier has poor defenses against the likes of JetBlue. As I said, the legacies have shot themselves in the feet. They're going to figure it out soon, but that will be too late. It will take years to get rid of the resentment many customers feel due from today's stingy award availability.

JetBlue could take an aggressive step here by eliminating points expiration for everyone, letting people know that every flight on B6 will count toward a future award, even if you can't always choose B6. That single step (coupled with maintaining current award availability) would vault TrueBlue above all legacy FF programs for non-elite members.

I've got to say I agree with that. I just flew SEA-BOS-SEA this week... out on UA, back on B6.

I have no status on UA, so was sitting in the second row from the rear, relegated to the last "boarding group" and got no shot at bin space, and was crammed into a small short-pitch coach seat with my feet on my briefcase for five hours.

And United calls "their sky's" "the Friendly Sky's." Sounds like you'll forever cherish your "Friendly Sky's" experience.

United offers "the Friendly ground service" too. Did you get to experience their India Call Center? That's a real treat!

JetBlue could take an aggressive step here by eliminating points expiration for everyone, letting people know that every flight on B6 will count toward a future award, even if you can't always choose B6. That single step (coupled with maintaining current award availability) would vault TrueBlue above all legacy FF programs for non-elite members.

Eliminating points expiration for everyone would increase the number of awards that could be redeemed. Keeping the same number of award availability would then therefore decrease the 'perceived' availability, and that's really what people make their FF program judgements on. In order for that to remain the same, B6 would have to increase the number of award seats, and decrease the number of revenue seats, which would obviously decrease revenue - not a good thing.

Well, at least we're starting to get a bit more information about this.

http://www.atwonline.com/news/story.html?storyID=11725

Sounds like a front-of-cabin product with more legroom. Not sure how this will affect the egalitarian aspects of JetBlue's service.

Not really a lot of information there, other than increased leg room and they are going to charge more for it, or maybe it will be available to everyone at the gate after the Y fare buyers had access to it at booking (like the current "blocked" seats). Or maybe they'll offer it like UA's E+, where you get it for free as a frequent flyer or you can buy-up for an incremental charge at the time of booking. Since they mention the incremental revenue in the story I'm guessing that the buy-up option is most likely.

What I don't understand is where the real revenue model is for moving from 36" to 40" of legroom. I understand paying a bit extra for moving from 31" to 34" like US offers with their E+ (though I rarely pay it and am 50% in getting it for free ^). But without some additional width as well, the extra legroom beyond 36" doesn't do a whole lot. Unless B6 is going to also shrink the legreoom in the back (which they will actually need to do to increase it further in the front), there is really very little benefit to this for passengers IMO.

Not really a lot of information there, other than increased leg room and they are going to charge more for it, or maybe it will be available to everyone at the gate after the Y fare buyers had access to it at booking (like the current "blocked" seats). Or maybe they'll offer it like UA's E+, where you get it for free as a frequent flyer or you can buy-up for an incremental charge at the time of booking. Since they mention the incremental revenue in the story I'm guessing that the buy-up option is most likely.

What I don't understand is where the real revenue model is for moving from 36" to 40" of legroom. I understand paying a bit extra for moving from 31" to 34" like US offers with their E+ (though I rarely pay it and am 50% in getting it for free ^). But without some additional width as well, the extra legroom beyond 36" doesn't do a whole lot. Unless B6 is going to also shrink the legreoom in the back (which they will actually need to do to increase it further in the front), there is really very little benefit to this for passengers IMO.

Maybe they will get more width ala a Lufthansa A320?
http://www.seatmaestro.com/airplanes-seat-maps/lufthansa-airbus-a320-200.html

Maybe they will get more width ala a Lufthansa A320?
http://www.seatmaestro.com/airplanes-seat-maps/lufthansa-airbus-a320-200.html

You mean like a legacy F cabin :)

The quote in the article indicated legroom but not seat width. Plus, increased width seats take a lot more inventory out than just adding leg room, so I don't see B6 going that route.

Are they even going to configure the cabin differently than now? Maybe they'll leave it the way it is, and just start charging for the seat at the front of the aircraft...

You mean like a legacy F cabin :)

The quote in the article indicated legroom but not seat width. Plus, increased width seats take a lot more inventory out than just adding leg room, so I don't see B6 going that route.

Well, the inventory should be the same according to Barger. But if you move the front to 40" pitch and 2 by 2 seating, how many rows of that can you put in that will result in exactly 150 seats?

Are they even going to configure the cabin differently than now? Maybe they'll leave it the way it is, and just start charging for the seat at the front of the aircraft...

I really hope they leave it and just charge a reasonable premium.

If they change it at all, whatever happened to "no first class seats, no second class citizens?"

I really hope they leave it and just charge a reasonable premium.

If they change it at all, whatever happened to "no first class seats, no second class citizens?"

If they start charging a premium they still have "second class citizens." They're not quite as second class, but they are still second class if they can't share in the options of other passengers.

Looking at the cabin today, there is ~876 inches of total seat pitch across 25 rows in the plane.

If B6 takes some rows and goes to 40" at the front of the cabin for 3 rows of 2x2 seating that converts 18 seats to 12. That means they'd need to add one extra row in the back. Split evenly across all the 23 rows that would need to exist the seat pitch would be <33" on average (32.87"). When you figure that the exit rows are probably going to keep their 37/39" pitch to allow for egress from the plane that drops the rest of the seats down to 32" in practice. That is at or below UA's E+ and on par with Delta (31-33" on most domestic planes), CO's 767s, some of NW's planes, etc. In other words, the cabin experience becomes a lot more like the legacies and removes much of the competitive advantage B6 has tried to build up.

If they go to 40" of pitch with 3x3 seating (which is more likely, IMO), they don't need the extra row of seats, but they still need to account for the foot of seat pitch that they lose. That would be 34" of pitch throughout, other than the 37/39" exit rows. I think that this is much more likely, though I will repeat my original question: Would you pay extra for 40" ptch when you're guaranteed 34" in the regular seats? At 34" throughout they'd still be at the top of the industry for pitch, which isn't all that bad. That being said, I'm not sure that they'd be able to drive too much incremental revenue with it. The reason people pay extra on the other carriers is that the pitch is so limited on the other seats. When there is already plenty of legroom, why pay up for even more?

The other thing to consider is whether they want to put a divider between the premium cabin and the main cabin. My guess is they won't, as having a wall between the two cabins actually takes up quite a lot of space (equivalent to losing a half row of seating, certainly). So, it'll probably just be a curtain, if anything, seperating the two.

The exit row positions are fixed. Right now there are 9 rows forward of the exit rows. Let's say, you convert 3 rows to 2x2 seating with 40" pitch. Then just have a curtain seperating this premium section from the regular coach. The seat pitch in rows 4-9 would drop to 34" from the present 36". In order to make up for the loss of 6 seats (3 rows of 2x2 seating), they would need to add a row of seats aft of the exit rows, which would make the seat pitch in rows 12-25 an average of 31.73" (based on an existing seat pitch of 34" aft of the exit rows).

If they go with 3-4 rows of 3x3 seating with 40" pitch as the premium cabin, then I expect the seat pitch will remain a consistent 33-34" throughout the rest of the coach cabin.

This seems to have been kept under very, very tight wraps. I haven't even really heard any rumblings about what this might entail. I remember hearing something along the lines of this will not be an announcement of a business class. However I haven't heard anything official or unofficial.

I was looking at some business class photo's on LH's airbus aircraft. I could see us having a set up like they have. 3 seats across but the middle seat can be converted into a tray table type device. I could see this coming to the fleet should we want to actually include some type business class. We could use as many seats as necessary to accomodate the high fare customers with out losing seats by putting in an actual business class.

I was looking at some business class photo's on LH's airbus aircraft. I could see us having a set up like they have. 3 seats across but the middle seat can be converted into a tray table type device. I could see this coming to the fleet should we want to actually include some type business class. We could use as many seats as necessary to accomodate the high fare customers with out losing seats by putting in an actual business class.

For the sake of simplicity lets says all three seats are $200 each or $600 in total for the threesome. By getting rid of one of them, that's $100 to be split by each of the window/aisle passengers or a 50% increase in fare to break even on the missing seat.

Instead of spending $200, the window/aisle pax spends $300 for guaranteed more room horizontally and maybe some extra service.

Maybe some people will spend the extra 50%, but I'm not sure about everyone. Another option that comes to mind is that anyone that buys a refundable ticket gets access to the special seats up front without a middle passenger and with some sort of enhancements as you state.

With all that said, I still think its a real option for B6 to remove the middle seats from the first three rows and add those six seats as a row elsewhere in the plane.

Needless to say, it will be interesting to see what B6 comes up with.

The problem with the blocked middle seat in European-style J is that there really isn't much extra horizontal space. There is the middle seat blocked with the table thing, but you can raise the armrest and overflow into the second seat really. It is a nice perk, but really not worth paying much for. Sure, some people might (some of it is sold in Eurpoe, too), but I think that more of it is connecting traffic to long-haul J than folks buying it for the blocked middle seat.

I see your argument, but it ignores one REALLY serious problem - Southwest. If B6 goes down the route you advocate they'll lock horns with WN in a short flight business where TV's and 36" seat pitch aren't valued so highly. I know who I favour to win that battle.

B6 really needs to find itself a different niche, and unlike you I don't think they'd have that much of a problem taking business from AA on some routes - I'd use them because certainty of the legroom is much better than upgrades that are hard to get - they really are a lot harder to get than you suggest, and there are a lot of people who fly once a month on these routes who will never get close to elite status.

What's so scary about WN? The moment their fuel hedges run dry the're in for big trouble. Their pay for FAs and PLTs is the highest among all carriers. Additionally, they offer a low-quality product.
Let's see who wins...

What's so scary about WN? The moment their fuel hedges run dry the're in for big trouble. Their pay for FAs and PLTs is the highest among all carriers. Additionally, they offer a low-quality product.
Let's see who wins...

Southwest is indeed going to have to compete mostly on being more efficient and having higher yields (e.g., more domination of short-haul business-intensive markets). An airline does not need to cut pay or service to win this competition. Making smart business moves is much more critical. But if an airline plays me-too, then yes, cutting pay and service is the only viable option.

What's so scary about WN? The moment their fuel hedges run dry the're in for big trouble. Their pay for FAs and PLTs is the highest among all carriers. Additionally, they offer a low-quality product.
Let's see who wins...


Southwest may pay more for their staff in general than other US carriers BUT (I quote from Wikipedia) "Southwest turned its first annual profit in 1973, and has done so every year since — a record unmatched by any other commercial airline." They did not achieve 34 years of continuous profitability and a 500+ fleet of aircraft by accident.

It's a complete mistake to believe WN offers a low-quality product. What is the "product"? In their case it's to get you from one State to the next, with the minimum fuss. It's to offer a large number of services in each market they enter, and to have motivated, flexible staff that take care of you well during the inevitable IROPS. Can you imagine WN needing a customer bill of rights? I can't because I know exactly what I'm going to get from WN and I know they'll deliver it efficiently with their own 'charm'.

What I won't get from WN is comfort and food on a flight over 2~3 hours in duration. I use them AUS-PHX because it's direct, but I'd think twice about AUS-LAX or further.

IMO the sheer scale and service culture of WN is too tough to beat in a short haul business. The opportunity is the longer sectors, but B6 has to shed it's pre-occupation with under cutting competitors and concentrate on brand image and beating the lousy service standards of the Legacies.

They did not achieve 34 years of continuous profitability and a 500+ fleet of aircraft by accident.


I agree with this 100%, and also with the thought that their success hinges largely on setting and meeting expectations that both they and their customers are satisfied with.

What remains to be seen is how they will fare in 2009 and beyond as their fuel hedges run out and/or are less favorable. The fact of the matter is that they have been operating with significantly lower costs than other carriers because of those hedges, but they are going to run out eventually, and that is going to be a bitter cost to bear. I think they'll manage, but it remains to be seen how it plays out.

To the point of this thread, WN has foregone the idea of elite seating or any other in-cabin differentiation of product. B6 seems to be going the other way. We'll know soon enough which one made the "right" choice.

To the point of this thread, WN has foregone the idea of elite seating or any other in-cabin differentiation of product. B6 seems to be going the other way. We'll know soon enough which one made the "right" choice.

Actually, they both could be right. All travelers don't want exactly the same thing.

Actually, they both could be right. All travelers don't want exactly the same thing.

Exactly. I certainly value different things going across a state than going across a continent or an ocean. Space, entertainment and food become much more important once you go over the 1,000-1,500 mile threshold, while service frequency is relatively less so, because most of us plan those trips further in advance and almost always stay at least one night at the destination.

I don't see Southwest as the natural competitor of JetBlue. To my mind the closest in branding is probably Virgin America who certainly do offer a differentiated product at the front of the cabin.