JetBlue profits on Boston-Phila. route

JetBlue started its route out of the Philadelphia airport in May. The carrier enjoys a dominant presence and corporate customer base in Boston.
JetBlue started its route out of the Philadelphia airport in May. The carrier enjoys a dominant presence and corporate customer base in Boston. (CLEM MURRAY / Staff Photographer)
Posted: February 06, 2014

It's tough to make money at another airline's international-flight hub, but JetBlue Airways is doing just that on the popular Philadelphia-Boston route.

JetBlue, Boston's largest airline with 125 daily flights, has succeeded where three other carriers did not: making a profit and winning over travelers with cheaper fares and in-flight amenities on a 300-mile trip on which US Airways long had a lock.

US Airways, with a hub in Philadelphia, has 19 nonstop flights on peak weekdays from Philadelphia to Boston.

JetBlue's arrival in May with five daily Boston nonstops immediately lowered airfares, once as high as $800 round-trip on US Airways, to $55 to $154 one-way on Jet Blue, depending on the day and time of travel.

"We are in Philadelphia for good," Scott Laurence, JetBlue vice president for network planning, said in an interview. "We are not going anywhere."

Southwest, AirTran, and Delta all stopped flying between Boston and Philadelphia because they could not compete successfully against US Airways. "We were very cautious going in. We put a lot of time, a lot of study, into what was different about JetBlue from the prior attempts," Laurence said.

JetBlue said it could succeed where others failed because of its dominant presence and corporate customer base in Boston.

"We are the carrier of choice in Boston, larger than anyone else," he said. "When our sales people go to an account in Boston, they are relevant to business customers. That really helps us."

JetBlue also attributes its success here to its customer-friendly brand and product, including more legroom in the coach cabin, live TV, free snacks, and a free first checked bag.

"Those things allow us to perform better than we otherwise would," Laurence said.

JetBlue's Boston-Philadelphia flights have been more than 70 percent full. Fares have been "at or above our expectation," Laurence said, and "revenue has come in ahead of our initial forecasts."

Looking ahead, JetBlue is "very keen and interested" in flying from Philadelphia to San Juan, Puerto Rico, where JetBlue is the largest airline and has grown significantly.

"We look at that, over the next 12 to 18 months, as being very possible," he said.

Eventually, JetBlue may add flights to Florida, particularly Fort Lauderdale.

"The more support we see in Philadelphia," he said, "the more likely that we will move more quickly with additional flying."

The most challenging customer has been the Philadelphia business frequent flier, who belongs to US Airways' Dividend Miles program and chooses to book with US Airways to accrue travel miles toward free trips and perks.

However, JetBlue has its own core of corporate customers in Boston.

James Tyrrell, Philadelphia International Airport's deputy director of property and business, said, "Everything I see from JetBlue is that they are doing well. Their fares are great, stable.

"Today, the average one-way fare for JetBlue is $111," Tyrrell said. "That compares to $142 for US Airways."

Jeffrey Erlbaum, president of ETA Travel in Conshohocken, tells clients, "If you want to have these cheap prices, you've got to support the smaller carriers."

At its peak, Southwest, which came to Philadelphia in 2004, flew nonstop to 20 destinations from Philadelphia and today flies to 11.

Last summer, Southwest discontinued its nonstop flight to Houston from here, Erlbaum said, and ticket prices "went from $300 to close to $1,000 for a trip during the week."

JetBlue was cited in an independent study from the Massachusetts Institute of Technology as the airline that lowers fares the most when it begins service in a new market, as measured by fares during 2007 to 2012, said JetBlue spokesman Anders Lindstrom.

The JetBlue "effect," MIT said, lowers fares $32 one way on average, or about $64 on a round-trip fare.


BY THE NUMBERS

125

Daily JetBlue flights out of Boston.

5

Daily nonstop JetBlue flights between Boston and Phila. US Airways has 19 nonstop flights on peak weekdays.

$111

Average one-way fare on JetBlue between Boston and Phila., compared with an average one-way fare of $142 on US Airways.


lloyd@phillynews.com

215-854-2831

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