Transport Airports

JetBlue’s Ripple Effect on Second-Tier U.S. Airports

Feb 17, 2014 12:00 pm

Skift Take

One of the greatest fears of the American and US Air merger was that second-tier cities would lose competition and suffer. Cases like Savannah demonstrate why that fear is not unfounded.

— Jason Clampet

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John Murphy  / Flickr

JetBlue's entry into Savannah, GA has cut some prices by over 60%. John Murphy / Flickr


It’s here — that low-cost carrier Savannah and the Lowcountry have been longing for.

Better yet, it’s JetBlue, an airline popular with passengers of all economic strata.

With two flights a day to New York’s JFK International and one a day to Boston’s Logan International, JetBlue officials knew they had something special before the first flight landed at Savannah/Hilton Head International Airport.

“We started out assigning an Embraer E190, which is a 100-seat aircraft, to Savannah,” said JetBlue Chief Financial Officer Mark Powers. “But because of Savannah and Hilton Head’s hard work, the response has been even stronger than we anticipated.

“That 100-seater is now scheduled to be replaced by a 150-passenger plane within the month.”

Fares from and to New York and Boston started dropping almost immediately after JetBlue announced their intention to make Savannah/Hilton Head its 83rd destination.

For example, a walk-up round trip ticket on Delta to JFK leaving this Monday and returning the next day was $758 before the announcement. That same ticket can be purchased today for $276.

“JetBlue being here is fantastic for a lot of reasons,” said Bill Hubbard, President and CEO of the Savannah Area Chamber of Commerce. “Being that connected to two big markets will have a huge impact on both business and tourist travel.

“But what’s too often lost amidst the obvious benefits for our New York and Boston markets is that having a low-cost carrier of JetBlue’s reputation come into our community will also have an influence on many of the routes that they don’t fly.

“The pressure a low-cost carrier puts on rates across the board is good for everyone.”

The one exception to that theory is Delta’s fare from Savannah to Atlanta, which will likely stay high for a couple of reasons, said Lori Lynah, director of marketing and air service development for the Savannah airport.

“First of all, Atlanta is Delta’s major hub. They like to fly passengers through Atlanta, not to Atlanta,” said Lynah, who was heavily involved in the courtship of JetBlue. “So, while I wouldn’t say they are discouraging people to fly to Atlanta as a destination, they certainly aren’t promoting it.”

Also, Delta is the only airline flying from Savannah to Atlanta, Lynah added.

“They have no competition.”

What Delta is doing as a result of JetBlue’s move into Savannah, is getting competitive and adding flights on those routes where it does compete.

According to a Department of Transportation report, Delta has added six additional weekly flights — adding more than 250 seats — to New York’s LaGuardia Airport. It has also added service to New York’s JFK International this month, with twice-daily flights adding another 1,000 seats a week.

United Airlines is projected to add five weekly flights and 250 seats to Newark, as well as one flight a week to both Washington Dulles and Houston. US Airways will add more than 600 seats weekly to Charlotte and one weekly flight each to Washington’s Reagan National and Philadelphia International.

JetBlue will have the most impact, adding 2,100 seats a week.

The projected growth is welcome news for an airport whose numbers have suffered since the economy took a nosedive in 2008. While the recession affected nearly every airport, Savannah was dealt a double blow with the loss of AirTran — its only low-cost carrier — that same year.

The result of that one-two punch was the dubious distinction of having the fourth-highest airfares among the 100 largest airports in the country.

Since then, the airport and the community have come together to work on attracting another low-cost carrier. The Savannah Economic Development Authority, the Hilton Head/Bluffton Chamber of Commerce, the Savannah Area Chamber of Commerce and Visit Savannah have collectively contributed more than $500,000 to the airport’s air service development fund, said Greg Kelly, airport executive director.

“The most significant factor in our recent air service success is the local and regional air service development partnership we have in place now.” he said, adding that he expects that consortium to help the airport produce more successes in the future.

While lower fares are welcome news, Savannah Airport Commission Chairman Sylvester Formey cautioned that, in order to keep the convenience of additional flights and lower fares, the community must support its newest airline.

“It’s critical that we support JetBlue, even as other airlines begin to offer competing fares,” Formey said. “We’ve seen it happen time and again in markets all across the country. If a low-cost carrier isn’t well supported, they will leave and fares will shoot right back up.

“JetBlue has made its commitment to us,” Formey told the crowd gathered Thursday to welcome the inaugural flight to Savannah. “If we honor our commitment to them, this will be just the beginning of a wonderful relationship.”

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