JetBlue Airways will cease operations in Columbus, Ohio and Nashville, Tennessee, as the low-cost carrier begins a focused initiative to increase over-flights of its congested New York JFK hub.
The low-cost carrier entered the Columbus market last October with four daily Embraer 190 nonstops to JFK and daily service to Boston. Thrice-daily E-190 flights between JFK and Nashville were launched in August 2006 but will end on 6 January.
“We are taking the difficult but necessary step to discontinue operations in these two markets” said JetBlue CEO Dave Barger during a conference call to discuss the carrier’s third quarter net profit of $23 million.
“After more than 12 months of service and a detailed review of traffic and revenue trends in these two cities, we have decided to redeploy our assets.”
Barger says the two markets, which are “tied to” JFK, simply matured “slower than what we were expecting”. He notes that they were launched in 2006, a year when 16 new markets were opened up. “That has been a lesson for us as well – open up fewer markets.”
A transcontinental route is also on the chopping block. JetBlue will terminate Airbus A320 service between Oakland, California and Fort Lauderdale, Florida on 13 January.
The airline continues to face operational challenges at its JFK hub. “It’s clear in our opinion that expanded capacity and some type of schedule change is needed,” says Barger.
US FAA officials are meeting with JFK airline operators today in Washington DC to thrash out a plan to tackle overscheduling at the airport, and JetBlue is “pleased with this decision”.
The carrier says it will continue to grow its JFK hub; a new terminal will open next fall. But as it looks to redeploy E-190 and A320 assets, it will “keep in mind we’ve calmed down the growth across the airline” and begun a “much more focused initiative on overflies”, says Barger.
“We are planning more point-to-point flying over Kennedy,” he says, noting, for example, the carrier’s new service linking Syracuse, New York with Orlando, Florida.
JetBlue will start to move some E-190s to the Midwest and “out west as well”, he says. But Barger adds: “We’re not going to open a whole lot of new cities on a go-forward basis. We’re going to connect the dots. [We] don’t expect a whole lot of new markets being announced in 2008.”
Keeping growth in check, JetBlue in the third quarter sold one A320 and returned one to a lessor. It plans to close the sale of two more A320s in the fourth quarter.
After taking delivery of three A320s and one more E-190 this year, the carrier will operate a fleet of 104 A320s and 30 E-190s at year-end. This will equate to an increase in available seat mile capacity of 10% to 12% for the fourth quarter.
JetBlue has also entered into an agreement to sell two A320s during the second quarter of 2008.
International growth, through a transatlantic partnership with Irish operator Aer Lingus, is on the horizon. “We’re optimistic about sales taking place at Aer Lingus, and making that a reality,” says Barger, noting that this will change the direction of the airline.