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JetBlue Airways is tweaking its West Coast strategy, dropping flights from its long-time focus city in Long Beach, California, while adding coast-to-coast routes as it looks to compete with larger U.S. carriers, including new nemesis Alaska Airlines,
Long Beach, about 20 miles southeast of Los Angeles International, has been JetBlue’s primary West Coast focus since in 2001, with the low-cost carrier at first content to avoid most head-to-head competition with the nation’s largest carriers. But that changed in 2008, when JetBlue began transcontinental flights from Los Angeles to New York JFK and Boston, first with all-coach service, and later with its Mint business class. It has expanded in Los Angeles since, with executives saying the routes are among its best performing.
Long Beach will remain open, JetBlue said Wednesday, but it will shrink to 23 flights on the busiest days, down from about 34 today. The change comes a day after JetBlue’s first quarter earnings call, when executives spoke repeatedly about driving “superior margins.” It also comes as JetBlue calculates how to best respond to Alaska Airlines, which significantly added to its transcontinental portfolio after acquiring Virgin America in late 2016. JetBlue had also wanted to buy Virgin America but lost a bidding war.
Long Beach is one of few U.S. capacity-controlled airports, and airlines cannot fly there without obtaining slots that permit each departure. Local groups are concerned about noise pollution, and airlines in total can fly no more than 50 departures. They cannot fly most international routes, though JetBlue tried to get that restriction changed.
“The only thing that’s surprising is that they are not pulling out,” said Brett Snyder, a Long Beach resident and airline industry blogger. “They have been greeted with nothing but hostility at pretty much every move. I am personally pleased to see them making a go of it here with a reduced schedule.”
As Long Beach shrinks, JetBlue will focus on other West Coast markets, mostly with new longer flights, where margins hold up better. It will expand transcontinental service in Burbank, just north of Los Angeles, and add a new route to New York from Ontario, California about 60 miles west of L.A. It also said it would add a second daily nonstop from New York JFK to Salt Lake City, and add more service from New York to Palm Springs, California.
In addition, JetBlue said it would begin to dabble in seasonal ski markets, with seasonal, non-daily flights. It will fly from Boston, Fort Lauderdale and Long Beach to Steamboat/Hayden in Colorado, and from Long Beach to Bozeman, Montana.
Long Beach Once Had Promise
Officially, Long Beach will remain a focus city for JetBlue, with flights to most larger West Coast cities, but it’s clear the airline is no longer as interested in it as several years ago, Snyder said.
In the past, JetBlue has shrunk and changed strategies in Long Beach to try to maintain profit margins, but it has done so strategically, ensuring it would not give up slots to other airlines. Most recently, JetBlue added some shorter flights to ensure it would keep the slots.
Now, however, JetBlue plans to let relinquish them, with Southwest Airlines likely to be the beneficiary. Southwest has signaled it want to grow there.
“They went to his business schedule to utilize the slots because if the didn’t, Southwest would use them, which was their biggest issue,” Snyder said. “It killed profitability.”
Long ago, JetBlue envisioned a different plan for Long Beach. It wanted to use it as an international connecting point, shuttling passengers from West Coast markets through Long Beach and to Latin America. But last year, after a long fight, the city refused to build a Customs and Border Protection processing facility, making most international flights impossible
“JetBlue had a great plans for international flying to Mexico and nearby Latin America,” Snyder said. “They had this vision of creating a nice focus city and having some good yields. When they got shot down, that whole plan feel apart.