JetBlue Keeps Focus on Florida, Caribbean with New Routes

JetBlue’s plan to grow its capacity on the high side for the US industry by 6.5 percent to 8.5 percent in 2012 is reflected in a planned rollout of new destinations to the Caribbean, Florida and Latin America during the fourth quarter of 2012.

Those regions, particularly the Caribbean and Latin America, are the primary growth vehicles for the carrier as some other US airlines retrench in those areas. The airline’s new Florida markets build on JetBlue’s strong brand awareness in the region as the airline expands into Florida from the less dense market of Providence, Rhode Island.

Executives at JetBlue recently stated the carrier continues to grow profitably in the Caribbean and Latin America, with those regions representing 10 percent of the 7 percent to 9 percent capacity growth the carrier expects to record during third quarter of 2012. The airline’s other major growth market, Boston, is accounting for about 7 percent of the third quarter of 2012 capacity growth.

JetBlue’s Caribbean expansion in fourth quarter of 2012 entails new flights from New York JFK and Boston to Grand Cayman Island Owen Roberts International airport and the launch of service from JFK to Samana, Dominican Republic.

Grand Cayman is a logical market for JetBlue as the carrier touches most of the major markets in the region. By year-end 2012 the carrier’s Caribbean and Latin America will encompass service to Aruba, The Bahamas, Barbados, Bermuda, Cayman Islands, Colombia, Costa Rica, Dominican Republic, Jamaica, Puerto Rico (where JetBlue has a focus city in San Juan), St Croix, St Lucia, St Maarten, St Thomas and Turks and Caicos.

The US Department of State estimates tourism represents 30 percent-40 percent of GDP in the Cayman Islands, and no US carrier offers direct flights to Grand Cayman from either JFK or Boston. Cayman Airways operates flights from JFK to Grand Cayman. JetBlue should not have challenges in building maturity in the new markets to Grand Cayman as its footprint to the Caribbean from both JFK and Boston is robust, and promoting flights to another Caribbean destination will not pose a challenge for the carrier.

The new flights to Grand Cayman from Boston are once-weekly on Saturdays, so the resources necessary for JetBlue to start-up the market are minimal. JetBlue will operate three weekly flights from JFK to Grand Cayman. Schedules in Innovata show that for the week of 11-Nov-2012 through 17-Nov-2012 JetBlue’s 450 seats will represent 65 percent of the weekly capacity in the market while Cayman Airways’ 244 seats will account for the remaining 35 percent share. Starting in mid-Dec 2012 as part of the high season Cayman's 488 weekly seats will clip the 450 offered by JetBlue.

Joining JetBlue’s new service to Grand Cayman in Nov-2012 are two new weekly flights from New York JFK to Samana, Dominican Republic, which will become the carrier’s sixth destination in the country.

JetBlue inaugurated service to the Dominican Republic in 2004 with flights to the country’s capital Santo Domingo and Santiago. Since that time the airline has added service to La Romana, Punta Cana and Puerto Plata.

The carrier has the largest presence in the Dominican Republic, offering approximately 51,600 weekly seats to the country and accounting for about 25 percent of the total seat share. In addition to catering to customers vacationing in the Dominican Republic, JetBlue also enjoys the visiting friends and relatives (VFR) traffic between the Dominican Republic and the US, primarily to its New York JFK base.

JetBlue serves all of its markets in the Dominican Republic from JFK, and also offers flights from its Boston focus city to Punta Cana, Santo Domingo and Santiago. JetBlue competes with both American and Delta on its flights from JFK to Punta Cana, Santiago, and Santo Domingo. But in all three markets JetBlue offers far more weekly seats than its legacy competitors, holding more than 60 percent of the weekly seat share in all of the route pairings. United also serves Santo Domingo and Puerto Plata from its hub at Newark Liberty International airport, but does not match JetBlue’s seating capacity in either market.

On flights from Fort Lauderdale to Santo Domingo JetBlue competes directly with fellow low-fare carrier Spirit Airlines, but JetBlue is the dominant carrier in the market in terms of seat share, accounting for 64 percent of the weekly seat share.

After it launches flights to Samana, JetBlue will be the only US carrier serving the city, which lies on the eastern coast of the Dominican Republic. The carrier characterizes Samana as an up-and-coming tourist destination. Both of Canada’s major carriers offer service to Samana with WestJet operating one weekly flight from Toronto and Air Canada offering a single weekly flight from Montreal.

JetBlue has been eying growth in the Colombian market since it launched flights to the country in 2009 with service from Orlando to Bogota. It expanded flights to Colombia in May-2012 with a Fort Lauderdale-Bogota pairing. During Nov-2012 the carrier is launching three new weekly flights from JFK to the coastal city of Cartagena.

The carrier has had ambitions to expand into Colombia after it enjoyed load factors on its Orlando-Bogota flights of approximately 89 percent during 2011 and about 80 percent for 1Q2012. JetBlue’s management recently declared Colombia “has been really good for our airline”.

With the launch of flights from New York to Cartagena, JetBlue is expanding its Colombian footprint beyond its Florida-Colombia offerings. Although Florida has a larger number of Hispanics of Colombian origin, New York’s Colombians account for about 5 percent of the region’s Hispanic population. Cartagena’s popularity as a tourist destination is also growing as it is situated in the northern part of the country on the Caribbean Sea.

Spirit Airlines is currently the only other US carrier serving Cartagena, typically offering four weekly flights from its Fort Lauderdale base. Colombian flag carrier Avianca operates flights from Miami to Cartagena. Its service offering from JFK includes flights from Bogota and Medellin.

JetBlue may have opted to test out the Cartagena market on a route where it would be uncontested, and could likely add more US routes to Cartagena if the market proves to be successful. Flights from southern Florida to Cartagena could become a possibility as JetBlue has not shied away from competing with Avianca and Spirit in both its routes from Orlando and Fort Lauderdale to Bogota.

JetBlue is rounding out its fourth quarter of 2012 service expansion with the launch of flights in Nov-2012 from Providence, Rhode Island to staples in its Florida network: Fort Lauderdale and Orlando. The move further bolsters JetBlue’s strength in the US northeast-Florida corridor, which has been one of the carrier’s areas of strength since its launch in 2000. About one-third of the carrier’s capacity is dedicated to markets from the northeast to Florida. JetBlue also serves Fort Lauderdale and Orlando from its Boston focus city, which is 80km north of Providence.

Southwest Airlines has long been the dominant carrier at Providence TF Green International airport, which the carrier served before launching flights from Boston in Aug-2009. Southwest accounts for 48 percent of the weekly seating capacity at Providence. But traffic growth at the airport has remained stagnant during the last couple of years as passenger numbers fell to 3.9 million in 2010 and remained at those levels in 2011 from a total of 4.3 million recorded in 2009. During 2Q2012, passenger traffic at Providence dropped 6 percent year-over-year in Apr-2012, 10 percent in May-2012 and 7.4 percent in Jun-2012.