JetBlue to go International

Low-cost carrier JetBlue Airways on Tuesday said it plans to expand its fleet by more than five times its current size in the next few years and extend its route network to overseas destinations.
“We are looking at various Caribbean locations. Our product performs very well long-haul, and the Caribbean is a very big market out of New York,” JetBlue Chief Financial Officer John Owen said at an airline conference.
Despite the airline’s positive attitude — it reiterated its operating margin forecast of 9 to 11 percent for the first quarter — JetBlue shares were off nearly 4 percent at midday.
“The entire airline sector is down today… after recent gains, it’s nothing to worry about,” said Ray Neidl, analyst at Blaylock & Partners. “High fuel prices, uncertainty with fares and yields are making the market very indecisive,” he said.
The New York-based airline, which added six planes in its fourth quarter of last year and plans to add 16 this year, said it has 100 Embraer 190 aircraft on order and will start taking deliveries in mid-2005.
“We will use the Embraer’s, which are slightly smaller than our current jets, to penetrate smaller markets,” Owen said.
JetBlue will also use the smaller jets to fly during off-peak seasons to highly seasonal markets such as Daytona Beach, Florida. “That way we can stay profitable throughout the year,” Owen said.
He also said JetBlue, which carries more passengers through New York’s John F. Kennedy Airport than any other airline, is in the midst of talks with the Port Authority of New York and New Jersey to build new terminals and expand further at that airport.
The 4-year-old airline, which a month ago requested 10 slots at La Guardia Airport in New York to begin service there this spring, said it will never be “terribly large” at La Guardia. “It’s only a token presence,” Owen said.
The airline said advance bookings for its new non-stop service between Sacramento and New York are well in excess of expectations, and the new Embraer 190 planes could be used for routes such as non-stop service between New York and San Antonio.
“The expansion is good, as long as they can keep controlling their cost,” said Neidl. “Adding to the fleet will increase their cost, but it will increase their revenue more.”
As JetBlue, known for having leather seats and live television on its airplanes, fights for market share by offering lower fares while increasing amenities, it recently partnered with News Corp, which owns the Fox broadcast network and 20th Century Fox movie studios, to provide pay-per-view movie programming on its planes.
“We also hope to roll out a system in our second quarter where you can print boarding passes at home,” Owen said.