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[news] JetBlue may soon bring discount battle to O'Hare

[news] JetBlue may soon bring discount battle to O'Hare

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Old Nov 21, 02, 9:11 am
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[news] JetBlue may soon bring discount battle to O'Hare

http://www.chicagotribune.com/busine...business%2Dhed
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Old Nov 21, 02, 9:15 am
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Old Nov 21, 02, 9:45 am
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Text of Article:

JetBlue may soon bring discount battle to O'Hare

Seeking to blunt the impact of low-cost carriers on the East Coast, the nation's third-largest airline unveiled plans Wednesday to fight fire with fire. A similar battle may be on tap for Chicago.

Beginning in early 2003, Delta Air Lines will launch its own discount carrier in an effort to halt a gradual loss of passengers that has accelerated since JetBlue Airways' entry into the East Coast market two years ago.

It's the same fight that United Airlines and American Airlines could be facing as soon as next year if New York-based JetBlue is successful in negotiating access to gates at Chicago's O'Hare International Airport.

Unlike Delta, which is trying to protect its lucrative service from Boston and New York to Florida, United and American would be faced with an attack on markets in three directions: east to New York, west to California and south to Florida.

American and United already are battling stiff competition from Midway Airport-based discount airlines such as Southwest Airlines, a fight that experts have said is reducing fares at O'Hare by about 10 percent. A low-cost carrier at O'Hare could further erode fare prices.

Ray Neidl, airline analyst with Blaylock & Partners in New York, said JetBlue's entry into the O'Hare market "can do something to pricing" by American and United that would be limited only by the number of gates it is allocated. The impact would be exponentially higher for each gate allocated for JetBlue flights, he said.

Gareth Edmondson-Jones, a spokesman for JetBlue, said Chicago officials thus far have suggested that the airline share space with other carriers at four gates.

"We haven't been offered an allocated gate," which Edmondson-Jones says the airline needs for its operations. "We can make it work in the near term with one gate."

Eventually, he said, the airline would need several more.

Chicago officials reportedly are so eager to lure JetBlue to O'Hare that they are attempting to pry as many as four gates loose from competitors to assign to the new carrier, sources said. Airlines at O'Hare have leases extending through 2018 on virtually all of the airport's 179 gates. A number of those gates, however, have only limited use.

Efforts to force return of the gates include linking the construction of new runways at O'Hare, which the airlines have long sought, to the release of the underutilized gates, several airline officials said.

Neidl said United and American would have to consider a move similar to Delta's if JetBlue gains a foothold at O'Hare.

"I've got a feeling if [the Delta experiment] works, the whole domestic market will go this way," he said.

Delta's new low-cost airline will fly only 199-seat Boeing 757 aircraft non-stop between Boston, New York and other Northeastern cities and Orlando, Ft. Lauderdale and several other Florida cities.

Like JetBlue, Delta said its new airline will fly 13 hours per day rather than the 10 hours per day that is the norm among the nation's largest carriers.

"The new subsidiary represents an aggressive and proactive initiative to meet the burgeoning competition from low-fare carriers," said Leo F. Mullin, Delta's chairman and chief executive.

"We have previously noted that low-fare carriers represent a real threat to Delta, substantially more than that from other hub-and-spoke competition. Low-fare carriers have been making significant inroads, particularly during this period of extreme financial duress for the industry."

Jamie Baker, airline analyst for J.P. Morgan Inc., who disclosed plans for the new airline last week, dismissed Delta's plans.

"We are largely unimpressed," he said in a research report issued shortly after Delta concluded its announcement.

"Why not everywhere? In Delta's own words, its new unit features elements required for discount operations--simple low fares, low costs, high utilization and low distribution costs. Actually, that should be the plan for Big Delta everywhere, not just its Northeast unit," he said.

Edmondson-Jones said JetBlue isn't concerned by Delta's decision.

"Imitation is the sincerest form of flattery. As Delta tries to reinvent itself, there are elements that we do that can be copied. But they can't match the experience," he said. Edmondson-Jones added that JetBlue recently was named the best carrier in North America by Conde Nast Traveler, a travel magazine.

"We know we have a superior product," he said. For instance, he said, along with low-cost fares, JetBlue provides a TV set at every seat.

-Chicago Tribune
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Old Nov 21, 02, 1:23 pm
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This is great news---thank you for sharing this.
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Old Nov 21, 02, 1:27 pm
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I wonder why O'Hare and not Midway. I have to believe it would be easier for them to get access to Midway.
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Old Nov 21, 02, 1:34 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Paulo:
I wonder why O'Hare and not Midway. I have to believe it would be easier for them to get access to Midway.</font>
Thanks for posting the article!

if the City of Chicago is willing to accomodate them, I say go for ORD as that is where the high fares are (and where B6 can more easily undercut them).

[This message has been edited by MUC Flyer (edited 11-22-2002).]
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Old Mar 7, 03, 10:10 pm
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Nice... if jetBlue really wants a spot at ORD, they should trade one slot at LGB for a whole bunch of AMR gates. I mean think about it, AMR really really really really wants to fly into LGB with more flights and really wants that one extra slot, maybe jetBlue can start bidding at like 10 ORD gates for 1 LGB slot haha. I know it won't happen, but wont hurt to dream.
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Old Mar 8, 03, 1:58 pm
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I don't think American wants anything at LGB but to cause Havoc. For years, they could have owned LGB, but until JetBlue got busy there and said they wanted most of the only 47 flights a day allowed did American do anything. I say keep American out. They are only doing it to bug JB not to provede service. Welcome to FlyerTalk.

[This message has been edited by milesrus (edited 03-08-2003).]
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Old Mar 8, 03, 6:07 pm
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I must say after reading the description of Delta's new service jetBlue definately has not a whole lot to worry about... Flying 757s would involve them having to fill those planes pretty efficiently to be profitable and those are much larger than A320s... not to mention I don't care how you fix it up they're still going to be louder and more obnoxious than A320s. Not to mention flying out of LGA the most delayed airport isn't going to help satisfy many customers... oh yeah unless they hire fresh flight crews using the same not so friendly delta crews will result in a very substandard copy cat of jetBlue... no offense to any die-hard delta fans out there...
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Old Mar 10, 03, 11:23 am
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I still think that jetBlue should consider flying to Gary (GYY)

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Old Mar 10, 03, 11:38 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Paulo:
I wonder why O'Hare and not Midway. I have to believe it would be easier for them to get access to Midway.</font>
Oh, there'll be plenty of open gates in ORD T1 once UA goes bye-bye.

Fares from ORD to anywhere B6 would fly have steadily declined over the past couple of years and are already quite competitive. Today ORD-SFO is popping up for under $200 for midweek travel! With WN and TZ pushing things down already, I don't see how B6 would or could improve things much here, unless it's to take over for UA.
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Old Apr 24, 03, 6:03 pm
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Any more news on B6 coming to ORD?
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Old Apr 25, 03, 12:37 pm
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They said yesterday that they will add one additional city in 2003, in addition to ATL and SAN that have already been announced.

I think they will wait to see the bankruptcy situation wash out amongst competitors before they choose where the best opportunity lies.

[This message has been edited by Paulo (edited 04-26-2003).]
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Old Apr 27, 03, 11:44 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Paulo:
They said yesterday that they will add one additional city in 2003, in addition to ATL and SAN that have already been announced.</font>
I read both press releases but I missed that statement. Where was that announced?

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Old Apr 28, 03, 4:07 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Paulo:
I wonder why O'Hare and not Midway. I have to believe it would be easier for them to get access to Midway.</font>
From what I hear the A320 would have weight restrictions due to the short runways and tall obstacles around the airport.
MDW runway info

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by DisgruntledGoat:
Any more news on B6 coming to ORD?</font>
I heard that B6 was close to an agreement around Christmas but the only gates available were in the Int'l terminal. The problem is that gate costs are significantly higher (2-3X) than a domestic gate, thus B6 decided against it. They were close to landing some gates that UA was not using and owed back rent on but UA decided to pay the back rent at the last minute.
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