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JetBlue’s attempt to acquire Virgin America fell short when the high price of the airline would have impacted its organic growth plans in the U.S., according to JetBlue executives on the company’s Q1 2016 earnings call.
JetBlue CEO Robin Hayes said that Virgin America wasn’t a must-have addition to JetBlue’s network, regardless of its cost.
“As widely reported, we did consider acquiring Virgin America as a way to quickly build a West Coast presence,” said Hayes. “Growing our presence with the acquisition of Virgin America would have simply accelerated that plan.”
While one executive admitted “a challenge on the West Coast in facilities” compared to its rivals, the company overall is going to continue its focus on expanding its more premium Mint product.
Expanding the Mint product to transcontinental flights is not in JetBlue’s immediate plans, but Norwegian’s expansion into the U.S. may force them to compete sooner rather than later.
“We’re very focused on delivering our current plan,” said Hayes. “When we look at Mint and flying into high-premium markets, we do think that presents a longer-term approach for JetBlue…. [Transcontinental flights are] something one can never say never [about], it’s potentially further out.”
Analysts on the call responded to claims of Mint’s profitability with concerns over the demand for its higher-priced routes and products.
“If you go back to when we first announced this, there was a lot of skepticism,” said Marty St. George, executive vice president of commercial and planning for JetBlue. “We saw a market with very high fares, in the mid-$2,000’s range, and service not commensurate with that price…. We’re open minded about where we can put Mint in the future.”
St. George said Mint’s expansion in the Caribbean is expected to continue due to strong demand.