JetBlue Touts Disruption in Its European Expansion. Is It Actually Changing Things?

JetBlue's transatlantic Mint business class. 

JetBlue Airways has named Amsterdam as its third European destination with flights due to begin later this summer. The Dutch city will join London and, beginning in June, Paris on the airline’s growing transatlantic map.

The New York-based carrier will initially connect Amsterdam Schiphol to New York JFK. It plans to add a flight to Boston Logan at a later date. Both routes will be flown with Airbus A321LR aircraft outfitted with 24 Mint business class and 114 economy seats. The addition of Amsterdam follows a successful complaint to the U.S. Department of Transportation in February over access to the Schiphol airport under the U.S.-EU open-skies agreement.

JetBlue CEO Robin Hayes, in a statement Tuesday, said travelers on the New York-Amsterdam route had long been subject to “very expensive fares and mediocre service” on the U.S. legacy airlines and their partners. JetBlue, he added, would “bring fares down and improve the experience for customers flying between the U.S. and Amsterdam.”

Hayes has made similar comments about the carrier’s flights to London and Paris, touting a lower price point, for example, on seats in JetBlue’s business class compared to legacy competitors.

But has JetBlue really lived up to its talking points and disrupted the New York-London market, its first across the Atlantic in August 2021? Not really, the data suggests.

The average one-way business class fare — the market segment that JetBlue’s statements claim the biggest disruption — between New York JFK and London Heathrow fell just 4 percent, or by $72, to $1,642 in the third quarter of last year compared to the same period in 2019, according to Diio by Cirium fare estimates. Overall average fares, including all service classes, actually increased 3 percent to $546. The third quarter, covering July, August, and September, is traditionally the busiest on flights between North America and Europe.

Now, the data is not entirely conclusive. For one, there was no pandemic affecting international and corporate travel demand in 2019 that, by all measures, changed the dynamics of the London-New York market last year. And seat capacity on the JFK-Heathrow route was down 19 percent in the July-to-September quarter of 2022 compared to three years earlier, Diio data show.

And as for service, most travelers would be hard-pressed to distinguish between a business class flight on British Airways or Delta Air Lines, and one on JetBlue. All three offer lie-flat seats and other amenities premium travelers expect on that route. In addition, JetBlue also is not a member of the three big global alliances — Oneworld, SkyTeam, and Star — which limits the utility of its loyalty program beyond its own flights and products. The carrier’s much controversial partnership with American Airlines specifically excludes JetBlue’s transatlantic flights.

Executives at legacy carriers have repeatedly downplayed JetBlue’s entrance into the transatlantic market. For example, they have said the airline has a limited impact on the overall market due to the small size of the airline’s planes — A321neos — and limited frequencies compared to their larger aircraft and numerous flights.

The data does, to a degree, support these legacy competitor arguments. The average one-way fare between New York JFK and London Heathrow on JetBlue was $379 in the third quarter of last year, while on American it was $598, British Airways $611, and Delta $630, Diio estimates show. The average fare on those same three major carriers three years earlier was $740 on American (down 19 percent), $567 on British Airways (up 8 percent), and $691 on Delta (down 9 percent) — minimal changes given the addition of a new competitor.

JetBlue, effectively, is a minnow in a transatlantic sea full of big fish. And that may be a good thing.

American, Delta, and United Airlines, as well as their European partners, appear to be avoiding yield-destroying fare wars to push JetBlue out of the market. One competitive response was United’s addition of Boston-London flights shortly before JetBlue entered the market last summer. But, for the most part, the New York airline has had the time to establish its brand and build up a presence in Europe on its own terms.

“Load factors have been through the roof, and I’d say it’s pretty tough to get a Mint seat flying across the pond,” JetBlue President Joanna Geraghty said last September of customer response.

And legacy competitors are far from hurting, even as JetBlue expands. Delta President Glen Hauenstein said in March that the airline expects the “highest margins ever” on transatlantic routes this summer. That sentiment is shared by United CEO Scott Kirby.

JetBlue’s seat capacity will increase as it adds new flights to Amsterdam and Paris. But all of the same factors at play in London — small planes and limited frequencies — means its overall impact on airfares and other market dynamics will likely be muted given the sheer size of its competitors. Delta and KLM dominate the New York-Amsterdam route with an 83 percent share of seats in the third quarter. And New York-Paris is a veritable who’s-who of airlines, including Air France, American, Delta, French Bee, La Compagnie, Norse Atlantic Airways, and United.

“Make it clear, our toughest competitor is Air France,” French Bee CEO Marc Rochet said when asked in December about JetBlue and others entering the New York-Paris market this summer. JetBlue, he added, with their small aircraft and focus on U.S. travelers would likely have little impact on his airlines’ business.