JetBlue Puts Transatlantic Ambitions To The Test

JetBlue Airways aircraft
JetBlue’s inaugural transatlantic flight arrived at London Heathrow on Aug. 12.
Credit: JetBlue Airways

JetBlue Airways has finally made good on its ambition to launch scheduled service between the U.S. and UK, part of a plan to disrupt transatlantic travel by reducing corporate fares in one of the world’s most lucrative markets.

Flight 007, a JetBlue Airbus A321LR, landed at London Heathrow Airport (LHR) in the late morning on Aug. 12, marking the New York-based carrier’s official entry into the transatlantic market. The inaugural flight, carrying JetBlue CEO Robin Hayes, departed New York John F. Kennedy International Airport (JFK) in the late evening on Aug. 11 for the overnight trip.

  • Carrier’s UK ambitions could benefit from strong brand, new Airbus A321LRs
  • Challenges include stiff competition, lack of slot access at Heathrow

Initial services are slated to run daily in August between JFK and LHR. In September, they will go down to four times weekly, along with the launch of service four times a week between JFK and London Gatwick Airport (LGW). JetBlue says it will return to daily service on both routes in October, although whether they follow through on that remains to be seen. The airline plans to launch Boston-London service in 2022.

In its bid to disrupt the transatlantic market, JetBlue is banking on the fact that its strong brand reputation, fleet of new-generation A321LRs, and premium Mint cabin product—featuring 24 lie-flat seats in each business class suite—will help it overcome the same pitfalls that bedeviled other long-haul, low-cost carriers in the past. The most famous case in recent years was Norwegian Air International (NAI), which ceased transatlantic flights in 2019 after losing money in that market for years.

Considering the history of NAI and others, the question is: What kind of odds is JetBlue up against in the New York-London market? Industry watchers are quick to point out several key advantages, but caution that the same forces that pressured other carriers will likewise pose significant obstacles for JetBlue.

Craig Jenks, president of Aircraft/Airline Projects Inc., says that NAI’s lack of a true business-class product harmed its ability to compete for premium traffic, despite offering 42-in. seat pitch across its entire cabin. JetBlue, on the other hand, “offers a substantial premium product” on each A321.

“If you look at the history of insurgents in the London-New York market, they have all discovered that you have to have a premium product,” Jenks tells Aviation Week. “It’s simply that the incumbent carriers effectively subsidize the cheap economy fares with high business-class fares. If you have only the back of the airplane, it’s not viable.”

Brett Snyder, founder of the popular Cranky Flier blog, says he expects JetBlue to have a “tough time” competing in the crowded New York-London market. Despite the attractive operating economics of the A321LR, he says competing against efficient widebody aircraft with much lower seat costs will likely be “an uphill battle.”

“This isn’t an airline stuffing a bunch of seats in and trying to really lower seat costs versus existing competitors,” Snyder tells Aviation Week. “This is an airline using an admittedly efficient airplane but one that has very few seats and isn’t going to get the same type of seat cost advantage you might hope to get, since it’s going up against new and efficient widebodies.”

While launching the service during the COVID-19 pandemic may seem unusual, the timing was likely driven by opportunities created by the air travel downturn, namely the ability to secure a slot pair at notoriously congested LHR. In normal times, purchasing a slot pair there could run $30-50 million, a price at which JetBlue shareholders—long skeptical of its transatlantic ambitions—may have balked. By launching during the pandemic, the company was able to scoop up a slot pair it otherwise probably would not have obtained.

And while LGW, London’s second-busiest airport, was probably not JetBlue’s preferred choice, the airport does process an impressive share of UK-originating vacation and leisure travel, which could feed nicely into JetBlue’s large network in the U.S. and the Caribbean region. It is also a relatively low-cost airport from which to operate and features great connectivity, thanks to multiple rail lines that make it easily reachable from London and its exurbs.

In order to effectively compete for a slice of the U.S.-UK business travel market, however, JetBlue is going to have to find a way to ramp up its frequencies. Prior to COVID-19, most major airlines in the New York-London market offered around four daily flights. Still, the airline will likely run up against the same restraints when trying to secure additional slot pairs at LHR.

“The received wisdom says that on Heathrow-New York frequency is extremely important because business travelers simply want to go when they want to go, and that does not coalesce in one particular point of time,” Jenks says. “JetBlue’s plan would very likely be to somehow get to keep increasing the frequency, but how they do it is a heck of a question. If the virus is history by January, then [there are] not going to be any slots, and they’ll be back in the $40-50 million slot-pair situation.”

In order to succeed, JetBlue will also have to confront stiff competition from deep-pocketed major airlines on both sides of the Atlantic. This includes the American Airlines-British Airways and Delta Air Lines-Virgin Atlantic joint ventures, as well as United Airlines. And while JetBlue will only be operating a small fraction of capacity compared with the majors, the carrier’s track record of disrupting the U.S. transcontinental market serves as a warning of what could happen if left unchecked.

All indications are that the majors are taking JetBlue’s threat seriously from the start. United has recently launched service between Boston and London in what appears to be a clear attempt at preempting JetBlue’s entry on that route in 2022. At least for now, the incumbent players appear to be matching JetBlue on fares. Another challenge will be competing for UK-originating traffic in a market where JetBlue remains a mostly unknown entity.

Snyder says he thinks coach fares will be “very competitive,” particularly after the conclusion of the summer travel season. Business fares will be a “tougher calculation,” he says, because of how much revenue is at stake should the majors aggressively try to match JetBlue’s fares. With business fares depressed because of the pandemic, though, and what Snyder calls a “real hunger to fill seats,” he says it is possible the majors will sacrifice some short-term yield to block JetBlue’s offensive.

“The majors are going to respond aggressively if they perceive a threat,” Snyder says. “I would expect to see a fairly sizable response in one way or another. Probably not so much capacity but more in terms of fares and revenue management.”

JetBlue has quite a few things going for it, including a strong product, efficient fleet and experienced management team. But by throwing its hat into the U.S.-UK ring, it will inevitably run up against fierce competition and difficulty ramping up frequencies at London’s busiest airport.

Even if JetBlue only manages to break even over the short run, the simple fact of establishing a position in the market could be seen as a victory of sorts—particularly as it looks toward other European destinations within range of the A321LR, such as Amsterdam, Madrid, Paris or Rome.

Ben Goldstein

Based in Boston, Ben covers advanced air mobility and is managing editor of Aviation Week Network’s AAM Report.