As recently as 2014, just two U.S. airlines—United and Virgin America, both then synonymous with despair—recorded lower operating margins than JetBlue. Even more uncomfortably, JetBlue’s margin was a massive 10 points lower than Spirit’s, giving rise to a dominant new narrative: Ultra-low-cost carriers were conquering the world, while JetBlue, with its higher-cost model, was falling behind. It was seemingly overindulging customers with free amenities and stubbornly refusing to charge for checked bags or densify its seating. What’s more, in Boston, JetBlue lacked many of the critical routes business travelers there demanded. Transcontinental routes continued to lose money, as they always…
