Seat 2B By Joe Brancatelli
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JetBlue Goes to The Dark Side
December 11, 2014 -When I visited JetBlue Airways headquarters this summer, I was prepared to find the carrier in a metaphoric bunker, fending off attacks from howling security analysts who accused it, among other crimes, of being "overly brand-conscious and customer focused."

But JetBlue wasn't in a bunker. Its executives had already surrendered and were activity formulating plans to destroy the airline's unique selling points and its nicely profitable niche as the nation's best-rated airline.

Not once at JetBlue's unprepossessing command center in the New York borough of Queens did I hear a defense of its policy to allow all customers to check a bag free of charge. Not once did I hear a defense of its fleet of Airbus A320 aircraft, which offers all flyers a humane 34 inches of legroom in comfy, thickly cushioned leather seats. Not once did I hear talk of the carrier's well-earned reputation for disruptive innovation, a policy that's made it the most successful aviation start-up in more than 30 years. And not once did I hear an executive promise to maintain JetBlue's 15-year reputation for being a markedly, provably, demonstrably better airline.

Instead, I heard rationalizations about the financial imperative of following the airline pack down the sinkhole of declining in-flight comfort. I got a lecture on the calculus of making your product just a little less awful than the other guys. And I also got the first draft of what is essentially JetBlue's new marketing mantra: We won't suck as much as the other guys.

I didn't get the specifics of JetBlue's defection to the Dark Side on that summer day. So I put the best face on what I heard, wrote several dissenting memos to friends in high places at the airline, then waited for what, to mix pop-culture metaphors, could only be called "The Cheapening".

It arrived, hastily prepared and notably lacking key details, last month in an Investor Day presentation:

  • Sometime next year, although JetBlue couldn't or wouldn't say when, the free checked bag policy will disappear as part of an amorphous regrouping of fares into "families." Buy the lowest fare family and you'll pay an extra (but unspecified) fee to check a bag.
  • Starting in 2016, JetBlue will stuff 15 more chairs on its Airbus A320s, bringing the seat count per aircraft to 165 from 150. That means JetBlue will fly its A320 at a higher seating density than many major competitors, including United Airlines (138-150 seats), US Airways (150) and Virgin America (146-149).
  • To maintain the impression of more room in coach after the switch to 165 chairs, JetBlue will install what the industry calls "slim-line" seats. Slim-line seats are thinner, lighter, rock-hard and stripped of most cushions and padding, which is why flyers hate them so passionately.
  • JetBlue will defer delivery of 18 new jets, relying instead on a "refresh" of its existing fleet of now-aging aircraft.

The Cheapening of JetBlue has so far been a hit with analysts and the stock market. Since the November 19 Investor Day, JetBlue shares (NASDAQ: JBLU) have jumped 21 percent. That's more than double the industry average during the same 13-day trading period.

But "The Cheapening" has been universally decried by passengers, who've bombarded JetBlue's Facebook page. It got so bad just before Thanksgiving that JetBlue was forced to post a "trust us" message. That, too, was met with derisive comments from the Facebook crowd, most of whom insisted they chose to fly JetBlue because of the free bag and comfy seats.

Robin Hayes, JetBlue's president and soon-to-be chief executive, waves away the complaints as "a lot of noise" and instinctively falls back on the new marketing mantra: We won't suck as bad as the other guys.

Hayes naturally claims The Cheapening is being driven by the need to improve profitability to the current levels of competitors such as Delta, United and American. The promise is $450 million more dropping to the bottom line starting in 2018.

But what Hayes conveniently forgets in order to buttress JetBlue's new narrative is that the higher profits rung up by competitors in recent quarters is most likely an illusion, a momentary sugar high in the airline industry's notorious boom-and-bust cycle.

Pursuing its own course, JetBlue has been profitable since 2009, something only Southwest Airlines can also claim. Delta Air Lines lost money in 2009. American Airlines went bankrupt in 2011 and was forced into a merger last year with US Airways. United Airlines lost $1.4 billion as recently as the first quarter and lost money in fiscal 2012, two years after its " merger of equals" with Continental Airlines.

And there's JetBlue's own cultural history. Since it launched in 2000, JetBlue has fared best when it operated as a disruptive innovator. It debuted with all-new aircraft, something no start-up had tried. It installed in-flight TV at every seat something no airline had ever done and made it free for all passengers, something no other carrier does even now. It progressively lowered the seat density of its Airbus A320s from 162 on launch day to 156 and then 150. While all other airlines save Southwest switched to charging for checked bags, JetBlue made a free bag part of its unique selling proposition. It created a fun hub with great dining at Terminal 5 at John F. Kennedy International and competitors are still scrambling to catch up. And earlier this year it revolutionized premium-class flying in the New York-Los Angeles-San Francisco "Transcon Triangle."

Conversely, JetBlue has fared most poorly when it went into a defensive crouch, most notably on Valentine's Day 2007, when it stranded dozens of planes and thousands of passengers at snowbound JFK. It took years for the airline to recover.

The move to a we'll-suck-less-than-the-other-guys approach is JetBlue at its most defensive, least disruptively innovative. And there's no reason to think it is a path to more profits. It never worked for the literally hundreds of start-ups that aped existing airlines.

"Sad, but it's over," was the totality of an email I received the day after JetBlue announced The Cheapening. A lot of travelers are thinking that, of course, but this email was notable because it was from one of JetBlue's behind-the-scenes founders.

I'm not sure it's over for JetBlue, but I do know a couple of things. The Cheapening never worked for any once-good airline. Carriers such as Midwest Express, Aloha Airlines and Midway all disappeared without a trace after abandoning their higher standards.

And The Cheapening is piled atop other disadvantages: JetBlue has a patchy domestic network with little or no service in key markets such as Chicago, Atlanta, Houston, Denver, Philadelphia and Dallas. It doesn't fly to Europe or Asia. Its frequent flyer program, TrueBlue, isn't competitive. And except for the transcontinental routes, JetBlue offers no premium cabin into which you can upgrade.

"Can you tell me why I should fly them now?" asked an email I received from a business traveler after JetBlue announced The Cheapening.

"I'm thinking," I replied. "I'm thinking."

This column is Copyright 2014 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright 2014 by Joe Brancatelli. All rights reserved.