JetBlue’s decision to introduce a premium product on a sub-fleet of its Airbus narrowbodies pegged for operation on highly contested transcontinental US markets marks a new era in the carrier’s hybrid evolution. As all carriers are amping up their products on transcon routes from New York to retain and steal coveted, high-yielding passengers, the outcome of JetBlue’s gamble is tough to predict.
While the creation of its strategy to attract higher-yielding customers has likely been under development for quite some time, JetBlue’s formal introduction of its premium product occurred shortly after the airline reported 2Q2013 financial results that featured continuing cost inflation and falling unit revenues, and warnings that it will not see a reprieve in cost pressure during the current quarter.
Obviously JetBlue’s forging into new territory with its premium cabin is a long-term endeavour; but in the short-term it will need to be prudent with a significant investment of this nature as its costs continue to rise - with yields meanwhile probably lagging the new investment. The carrier recently revised its 2013 unit costs estimates upwards, driven in part by a small decrease in capacity.
See related report: JetBlue continues to battle cost spikes compounded by weaker demand in 2Q2013