JetBlue Bets Big on New Routes
- For airline network planners everywhere in the world, the current focus is revival, that is, restarting flights when demand merits and — just as importantly — when government travel restrictions allow. Occasionally during the past weeks, Europe’s Wizz Air and Ryanair have announced some brand-new routes. But in most instances, when airlines have something to say about their route networks these days, it’s to announce when they’ll be resuming this or that route they previously flew.
Norwegian, for example, flying just a handful of domestic Norway routes during the crisis, said last week it would revive some U.K. routes (from London Gatwick and Edinburgh) to Oslo and Copenhagen next month, citing a buildup in demand. It will resume some Scandinavian flights to European markets like Spain and Greece as well. This will justify bringing back another 12 B737s, to go along with the eight currently flying. Happily, more workers will return as well.
- O.K, so Norwegian is bringing back some flights. Other airlines are doing the same. But a JetBlue announcement last week was something altogether different. The LCC unveiled a slew of brand-new domestic routes, many of them direct attacks on rival hubs. Most strikingly, the airline will bring its Mint-equipped A321s to Newark, connecting the airport with Los Angeles and San Francisco starting next month. As it happens, these are two of United’s most important routes.
Not stopping there, JetBlue will fly from United’s Newark fortress to San Diego, Phoenix, Las Vegas, Austin, Charleston, Jacksonville, and Sarasota before the end of this summer. So not to make Delta and American feel free of its wrath, JetBlue will fly from New York JFK to Detroit, Minneapolis, and Dallas DFW, three business-heavy routes it’s never flown before.
It almost goes without saying that Florida will get lots of new routes, but not just from JetBlue’s core markets like New York LaGuardia. It’s also starting four Florida routes (and another to Puerto Rico) from American’s Philadelphia hub. Also in the mix are new Florida routes from Chicago O’Hare, Pittsburgh, San Francisco, Seattle, Portland PDX, Cleveland, Providence, and Washington DCA.
To be perfectly clear, JetBlue isn’t expecting to generate huge profits on these new routes, nor any profit for that matter. But they’re places where it sees reviving leisure demand sufficient to generate positive cash flow (in other words, more than cover variable costs like fuel). And that’s better than having planes sit on the ground. By flying more of its planes, furthermore, it can retain more of its employees. But the carrier makes clear that the new routes are opportunistic short-term maneuvers, with “market demand to determine how long a particular route continues to operate.” It might readily exit some of the Newark routes, for example, when enough demand returns to rebuild its normal route network. Many of its business-oriented routes from Boston, as it happens, are not yet ready to return. Same for many international markets in the Caribbean, Mexico, and upper South America.
As for those Mint routes, JetBlue is simply betting that the New York-area-California market will see some return of premium leisure demand, for lie-flat seats that would otherwise lie fallow in an industry still devoid of any high-yield business traffic. It might also be trying to take advantage of United’s relatively conservative approach to reviving its schedules. All told, JetBlue will be operating more than half of its normal summer schedule, which includes its newly announced routes, plus the reopening of some closed cities and revival of some seasonal flying.
For JetBlue to be a healthy airline again though, five key markets must return to some semblance of normal: the Florida market, the Caribbean market, the Boston business market, and the transcon market. Next year, it still aims to enter the transatlantic market, targeting London.
And Wizz Bets on Eastern Europe
- Wizz Air continues to announce new routes and bases. In Romania, a critical market, it’s opening yet another base (its seventh in the country) at the airport serving Bacau. Two A320s will be stationed there in late October, at which point travel restrictions within greater Europe will hopefully be a thing of the past. Of the 12 new Bacau routes it will launch, seven are to airports in Italy.
That aside, Wizz will undertake what’s it calling a “massive” expansion from Serbia’s capital Belgrade. Rather than basing two A320s there, it will switch to three A321s. Not waiting until the fall, the expansion will take place next month, featuring nine new routes, three of them in Germany. The LCC is reopening old bases all the while, including one in the Ukrainian capital Kyiv last week.
- Perhaps most interestingly (apologies for burying the lede!), Wizz will open its first Russian base in September. A single A320 will be based in St. Petersburg, where Russia’s government was pushing an open skies policy pre-crisis. From Peter the Great’s old capital, Wizz will fly to Salzburg (Austria), Oslo (Norway), Copenhagen (Denmark), Stockholm Skavsta (Sweden), and Malta. It first began flying to St. Petersburg from other bases in 2017, about four years after debuting flights to Moscow’s Vnukovo airport. Last year, it began Budapest flights to Kazan as well. Major industry shocks have a way of changing trends, and Russia’s traditional hostility to open skies and foreign low-cost competition could potentially melt away in the post-Covid era.
- China and the U.S. stepped back from the brink and started allowing commercial flights between the two countries. Remember, the U.S. had moved to ban flights from China after China’s civil aviation regulator effectively blocked Delta and United from resuming service. Now, the U.S. Transportation Department said its counterpart in China has made progress on the issue, and Chinese carriers will be allowed to return.
Flights remain limited, however. Chinese carriers will be allowed to operate four weekly roundtrips. Both sides said they will allow more service on a reciprocal basis. A deeper longer-term question though, is whether U.S.-China air service demand will ever become what it once was, given the growing hostility and changing economic relationship between the two countries. Boeing is a good example: It hasn’t sold any planes to China in a long time.