Never has air travel been more affordable. For college students in Boston, this is uniquely true. Logan International Airport hosts a bevy of low cost airlines with access to cities spanning the country.
Therein lies the problem: Airlines like low-cost favorite jetBlue are facing increasing pressures to increase revenue and profits.
For much of its six-plus-year history, jetBlue has been trying to expand its way out of trouble by bringing its flair and amenities to value travelers across the country. Though this model has been followed before, it has met with little success.
For the fourth quarter of 2005, jetBlue announced its first loss in company history. Worse still, it announced that it projected similar deficits for all of 2006. As an attempt to counter this tide of red ink, jetBlue plans to take delivery of dozens more Embraer E190 100-seat jets and announce service to 10 new cities including Pittsburgh, Pennsylvania and Jacksonville, Florida.
More significantly, jetBlue raised ticket prices almost $10 each way on routes where it does not compete with low-cost leader Southwest Airlines. It appears the days of super-low fares are edging to a close.
But there may be hope yet if jetBlue learns some lessons from the history of Braniff International Airlines. At its height in the 1970s, Braniff was the airline with flair. It truly embodied the jet-set age. Planes were painted by world-renowned artists, flight attendants wore Pucci-designed outfits, and Braniff even operated Concorde flights from its Dallas-Ft. Worth hub, giving a taste of the high life to anyone who could afford a reasonably priced ticket.
Needless to say, though, Braniff was a waterfall of losses. Increased competition from rivals was answered by the constant addition of new routes in hopes that Braniff could grow its way out of trouble. The strategy failed, and the airline was the first to cease operations after the deregulation of the industry in 1979.
So what can jetBlue learn? There are a few steps jetBlue should keep in mind as it attempts to return to profitability:
Growth by itself is no virtue. Airlines with much greater frequencies, and therefore pricing power, are willing to lose money to keep jetBlue off their turf. jetBlue will not be able to make money on new routes if it gets into a prolonged fare war with another airline. Unrestrained growth like Braniff's was a recipe for disaster for this very reason.
Don't cut your perks. What sets jetBlue apart is its hip attitude, personal TVs and unlimited snack service - not to mention low fares. When Braniff shed its hip luxury image in favor of a low-cost "Texas Class" setup, passengers left in droves. If jetBlue eliminates its perks, nothing will set it apart from Southwest, AirTran and ATA.
Keep labor happy. Whenever airlines are in trouble, they seem to turn to employees and cut their wages. jetBlue thrives on its employees' productivity and happiness in working for the company. Acrimonious labor union relations with Braniff drove the company to cease operations because management and rank-and-file employees simply lost the will to continue negotiations.
Treat passengers like people, not cattle. In a day where other airlines simply view passengers as revenue machines that are easy to nickel-and-dime, jetBlue stands apart by rewarding its customers when it is delayed or makes mistakes.
Although all of these tasks are easier said than done, the goals of a successful airline are relatively simple. Luckily for jetBlue, others have attempted to tread a similar path. With the added advantage of history, hopefully jetBlue can return to profitability and continue the service travelers in Boston and across the country have come to love.
