Low-cost carrier JetBlue Airways Corporation (NASDAQ:JBLU) took a giant leap forward into high-class offerings this week when it announced new lie-flat seats and first-class service in an attempt to bolster the popularity of its transcontinental flights and lure a demographic that’s been largely absent from its fleet: business travelers.
JetBlue unveiled its fully customized lie-flat seats and enclosed “private suites” on Monday as part of its new level of “service, comfort and amenities at an affordable price,” which it expects to stimulate demand.
“Our customers have requested more premium options on our transcontinental flights, and we listened,” CEO Dave Barger said, unveiling the new service at a Global Business Travel Association convention in San Diego. “We decided to enter the premium transcontinental market in a way that only JetBlue can: with an intense focus on offering the best possible product for the best possible price.” What exactly that price will be remains to be seen, given that JetBlue has yet to offer any sample fares.
The new seating will debut in the market on new Airbus A321 aircraft in the second quarter of 2014. A dedicated sub-fleet of 11 aircraft will run the carrier’s nonstop routes from New York to Los Angeles and San Francisco, with additional markets like Boston possible, pending customer response and demand for more service.
JetBlue -- which is known for carting leisure travelers from the Northeast to vacation destinations in Florida and the Caribbean -- believes it’s ready to jump feet first into the most profitable and highly contested market for U.S. domestic travel. Revenue industry-wide from the New York JFK-Los Angeles and JFK-San Francisco markets is more than 50 percent higher than any other U.S. route, with premium fares that can easily top $6,500.
Data from the airline industry site Diio show that there are more than 6,000 passengers each day on these transcontinental routes, and Barger said JetBlue believes it can beat the competition with a lower price point for first class tickets. “By offering our own, unique seats and enriched service elements that will include some soon-to-be-announced partnerships, we are creating a one-of-a-kind experience that will serve this market in a way only JetBlue can,” he said.
The airline will display the lie-flat seats, created in partnership with Thompson Aero Seating, in a 2-1 configuration. Rows 1, 3 and 5 will offer 2-by-2 seating, while rows 2 and 4 will offer the single suite seats, which include a closable door for privacy. All of the new seats will lie flat to 6-foot, 8-inches, and will have a massage function, cushions fully adjustable for firmness and a 15-inch widescreen TV.
The carrier said in its announcement Monday that it would also ramp up the core JetBlue Experience in 2014 with movable headrests, a new entertainment system with up to 100 DirecTV channels on 10.1-inch widescreens and power ports accessible to all customers. It will also begin installing a Fly-Fi system by the end of 2013 that will offer broadband speeds and “serve as the fastest Internet access at altitude.”
“This is not the slow Wi-Fi you get on other airlines today. This will be connectivity at speeds you've come to expect on the ground," Barger promised.
JetBlue, which began flying in 2000 with an all-coach model, has good reason to bet on the new 16-seat first class offerings. The carrier trails its rivals in shareholder returns and profit-margin growth, and fell short of forecasts for second-quarter profit. Its dismal second-quarter earnings fell by nearly one-third, missing Wall Street expectations as maintenance and other costs climbed at a faster pace than revenue. Many analysts are eager to see if JetBlue can attract as loyal a base with corporate road warriors as it has with sun-seeking vacationers.