JetBlue: Who's precious now?

So is it still different? When JetBlue Airways started out, it set out to be different: new planes, new plans, and new attitude. It would be a classic low-cost, low-fare airline with a big difference; it would offer a lot of service. Well, six years later, it still has service at least in the form of trendy snacks and much-liked live on-board television, but JetBlue is becoming more and more like a regular airline: it has a hub, where it increasingly connects flights and passengers, it has two fleet types, it has corporate accounts, and now it's about to go into the Global Distribution Systems in a big way.

Moving to break down one of the last walls between the legacy model and the low-cost model's heavy reliance on Internet distribution, JetBlue is "in final-stage negotiations with several of the GDSs", founder and chief executive David Neeleman told analysts and reporters during the carrier's most recent teleconference.

Neeleman said that since the GDSs were deregulated, they have "economics that work for us now. They fit our cost model. There is a channel of business, be it corporate, or people who go to travel agents, that we have not been able to participate in". JetBlue had been in several GDSs, but withdrew from Worldspan in 2001 and from Galileo in 2002, and finally from Sabre at the end of 2004, citing the cost of using the GDSs and the growing number of alternative. JetBlue was making just 2% of its bookings through Sabre, and it participated in Sabre at a low level. Other LCCs have moved back toward the GDSs, with both AirTran and Southwest participating, making JetBlue "the only airline" in the domestic US market not in any traditional GDS channel. "We think that is going to add some good incremental business and that will help us a lot", Neeleman added. He says that JetBlue "can plug in pretty quickly" through its existing Navitaire reservations system.

In reporting a slim return to profitability, Neeleman says that high gas prices are a two-edged sword for the airline: he related a conversation one of JetBlue's reservations people had with a caller who said he had always gone to Florida for $69 and was angry now that the fare was $89. The reservationist said, 'can you drive to Florida for $89, sir'? 'Gee, I guess you have a good point', said the man, who promptly booked a ticket.