Final yr, JetBlue Airways (NASDAQ:JBLU) made a long-awaited announcement that it might enter the transatlantic market with flights to London in 2021. JetBlue transformed 13 of its Airbus A321neo orders to the brand new long-range A321LR models to assist its transatlantic enlargement plans.
Lower than a yr later, the COVID-19 pandemic crushed air journey demand — significantly on worldwide routes. However, JetBlue CEO Robin Hayes not too long ago confirmed that the New York-based airline nonetheless expects to launch its first flights to London in 2021.
London plans principally intact
Final month, American Airways and JetBlue introduced a brand new proposed partnership to allow seamless connections from JetBlue flights to American’s worldwide routes in New York and Boston. On the time, JetBlue reiterated that it nonetheless deliberate to launch its personal transatlantic service to London in 2021.
Regardless of that latest assertion, a Bloomberg host requested Hayes throughout an interview earlier this month whether or not JetBlue nonetheless anticipated to begin service to London in 2021. Hayes responded that the airline’s transatlantic launch stays on monitor for subsequent yr, though he cautioned that flights have been more likely to start later within the yr than initially deliberate. When pressed for extra element, he indicated that flights would almost certainly begin within the third quarter, or a couple of yr from now.
JetBlue remains to be maintaining key elements of its plan near the vest. For one factor, it hasn’t revealed the configuration for the A321LR. Previously, Hayes has stated that JetBlue would have extra “Mint” premium seats on transatlantic flights than the 16 Mint seats on the jets it makes use of for premium transcontinental flights at the moment.
Picture supply: JetBlue Airways.
Different lacking particulars are which London airport (or airports) JetBlue will serve and whether or not the airline will launch London flights from each New York and Boston or simply one in all its Northeast cities subsequent yr.
Unhealthy timing — or actually good timing?
At first look, getting into the transatlantic market proper now looks as if a weird thought. In spite of everything, long-haul journey demand has been just about nonexistent. Aviation marketing consultant Robert Mann not too long ago argued that JetBlue ought to play for time, delaying the beginning of its London flights for a few years. Nonetheless, 2021 may truly be a good time for JetBlue to launch transatlantic service.
First, different airways’ latest schedule cutbacks may allow JetBlue to acquire (and maintain) higher airport slots within the crowded London market. A yr in the past, JetBlue appeared to have little or no likelihood of getting slots at Heathrow, the popular airport for most individuals touring to and from London. Even stepping into the No. 2 airport (Gatwick) was not assured. Now, there are many open slots. Airways that maintain these slots will battle to maintain them although they are not getting used proper now due to the pandemic. But when JetBlue is keen so as to add London flights in 2021, the related authorities may revert to the standard “use-it-or-lose-it” guidelines.
Second, JetBlue’s Mint service primarily appeals to rich leisure vacationers, whereas most airways’ premium passengers are flying for enterprise. If a coronavirus vaccine or simpler therapeutics grow to be accessible by this time subsequent yr, JetBlue may benefit from fairly a little bit of pent-up leisure journey demand — even when companies are nonetheless maintaining journey to a minimal.
Third, JetBlue has one of many stronger stability sheets within the airline business. (It ended the second quarter with $3.four billion of cash and investments, offset by a reasonably manageable $5.6 billion of debt and lease liabilities.) Beneath regular circumstances, incumbents would possibly react to JetBlue’s entry on a profitable route by growing capability and dramatically reducing fares in a bid to retain market share. Within the present atmosphere, JetBlue rivals with weaker stability sheets may not be capable of afford an aggressive aggressive response.
Nothing’s set in stone
After all, there is not any assure that JetBlue will undergo with its present plans to start flying to London in Q3 2021. The airline nonetheless must get certification from the Federal Aviation Administration to function lengthy over-water routes earlier than launching service to London. The COVID-19 pandemic may probably sluggish the regulatory course of, forcing JetBlue to delay the primary flights to London.
If the pandemic stays in full swing a yr from now and there are restrictive quarantines in impact for transatlantic vacationers, that might additionally persuade JetBlue to delay its first London flights.
Nonetheless, the almost certainly final result is that JetBlue will land in London earlier than the top of 2021. That may place it to construct up a profitable transatlantic franchise because the airline business recovers from the COVID-19 pandemic over the following a number of years.