JetBlue Airways Corporation, stylized as jetBlue, is an American low-cost airline headquartered in Long Island City, in Queens, New York City. Primarily a point-to-point carrier, JetBlue's network features six focus cities including its main hub at New York City's John F. Kennedy International Airport, with destinations across the Americas and Europe. Although not a member of any global airline alliances, JetBlue has codeshare agreements with airlines from Oneworld, SkyTeam, and Star Alliance.
History 1998–2000: Founding
JetBlue was incorporated in Delaware in August 1998 with its headquarters in Forest Hills, Queens. David Neeleman founded the company in August 1999 under the name "NewAir". JetBlue started by following Southwest's approach of offering low-cost travel, but sought to distinguish itself by its amenities, such as in-flight entertainment, TV at every seat, and SiriusXM satellite radio. JetBlue sought to primarily use the Airbus A320 family to ease maintenance, taking a similar approach to Southwest, which primarily uses the Boeing 737.
In September 1999, the airline was awarded 75 initial take-off/landing slots at John F. Kennedy International Airport and received its USDOT CPCN authorization in February 2000. It commenced operations on February 11, 2000, with services to Buffalo and Fort Lauderdale.
JetBlue's founders had set out to call the airline "Taxi" and therefore have a yellow livery to associate the airline with New York. However the idea was dropped after threats from investor JP Morgan to pull its share ($40 million of the total $128 million) of the airline's initial funding unless the name was changed.The Steady, Strategic Ascent of JetBlue Airways. January 11, 2006.
2000s JetBlue was one of only a few U.S. airlines that made a profit during the sharp downturn in airline travel following the September 11 attacks. The company's planned initial public offering was put on hold due to the attacks and subsequent downturn. The IPO took place in April 2002, raising $260 million at its NASDAQ debut.
The airline sector responded to JetBlue and Southwest's market presence by starting mini-rival carriers: Delta Air Lines started Song, and United Airlines launched another rival called Ted. Song has since been disbanded and was reabsorbed by Delta and Ted reabsorbed by United.
In October 2005, JetBlue's quarterly profit had plunged from US$8.1 million to $2.7 million largely due to rising fuel costs. Operational issues, fuel prices, and low fares, JetBlue's hallmark, were bringing its financial performance down. In addition, with higher costs related to the airline's numerous amenities, JetBlue was becoming less competitive.
For many years, analysts had predicted that JetBlue's growth rate would become unsustainable. Despite this, the airline continued to add planes and routes to the fleet at a brisk pace. In addition in 2006, the IAM (International Association of Machinists) attempted to unionize JetBlue's ramp service workers, in a move that was described by JetBlue's COO Dave Barger as "pretty hypocritical", as the IAM opposed JetBlue's creation when it was founded as New Air in 1998. The union organizing petition was dismissed by the National Mediation Board because fewer than 35 percent of eligible employees supported an election.
JetBlue experienced its first-ever quarterly loss during the fourth quarter of 2005 when the airline lost $42.4 million, enough to make them unprofitable for the entire year of 2005. The loss was the airline's first since going public in 2002. In addition to that, JetBlue forecasted a loss for 2006, citing high fuel prices, operating inefficiency, and fleet costs. During the first quarter report, CEO David Neeleman, President Dave Barger, and then-CFO John Owen released JetBlue's "Return to Profitability" ("RTP") plan, stating in detail how they would curtail costs and improve revenue to regain profitability. The plan called for $50 million in annual cost cuts and a push to boost revenue by $30 million. In October 2006, JetBlue announced a net loss of $500,000 for the third quarter, and a plan to regain that loss by deferring some of their E190 deliveries and by selling five of their A320s.
In December 2006, JetBlue, as part of their RTP plan, removed a row of seats from their A320s to lighten the aircraft by 904 lb (410 kg) and reduce the cabin crew size from four to three (per FAA regulation requiring one flight attendant per 50 seats), thus offsetting the lost revenue from the removal of seats, and further lightening the aircraft, resulting in less fuel burned. In January 2007, JetBlue returned to profitability with a fourth quarter profit in 2006, reversing a quarterly loss in the year-earlier period. As part of the RTP plan, 2006's full-year loss was $1 million compared to 2005's full-year loss of $20 million. JetBlue was one of the few major airlines to post a profit in that quarter.
While its financial performance started showing signs of improvement, in February 2007, JetBlue faced a crisis, when the blizzard of 2007 hit the Northeast and Midwest, throwing the airline's operations into chaos. Because JetBlue followed the practice of never cancelling flights, it desisted from calling flights off, even when the ice storm hit and the airline was forced to keep several planes on the ground. Because of this, passengers were kept waiting at the airports for their flights to take off. In some cases, passengers who had already boarded their planes were kept waiting on the apron for several hours and were not allowed to disembark. However, after all this, the airline was eventually forced to cancel most of its flights because of prevailing weather conditions.JetBlue Airways: Growing Pains?. ICMR Case Study. Retrieved November 2, 2010. This reportedly cost JetBlue $30 million.JetBlue fiasco: $30M price tag Retrieved November 2, 2010.
In February 2007, JetBlue announced its partnership with Irish flag carrier Aer Lingus to allow passengers to switch between airlines on a single ticket for flights with connections in either New York JFK or Boston. Unlike traditional codeshare agreements, the partnership did not allow the airlines to directly sell seats on each other's flights. Therefore, customers initiated the purchase on one airline's website, and then were transferred to the other airline's website to complete the transaction.
Following the February 2007 incident in which the airline was forced to cancel nearly 1,700 flights due to winter storms, JetBlue's board of directors replaced founder and chief executive officer David Neeleman with Dave Barger. He had politicked the board, while Neeleman was busy publicly apologizing. Barger's ascendancy caused widespread demoralization in the ranks. He became JetBlue's new chief executive officer on May 10, 2007. Neeleman, the company's founder and largest individual investor, became a nonexecutive chairman as a result of the change.
In early 2007, JetBlue also faced reliability problems with its Embraer E190 fleet. For a couple of months, JetBlue contracted ExpressJet to operate four Embraer ERJ 145 regional jets on behalf of JetBlue. While this was going on, two E190 aircraft at a time were sent to an Embraer maintenance facility in Nashville, Tennessee. ExpressJet operated routes between Boston Logan and Buffalo, New York, and Washington Dulles, and between New York–JFK and Columbus, Ohio (since terminated), and Richmond, Virginia.
In July 2007, the airline partnered with 20th Century Fox's film The Simpsons Movie to become the "Official Airline of Springfield". In addition, a contest was held in which the grand prize would be a trip on JetBlue to Los Angeles to attend the premiere of the film. The airline's website was also redecorated with characters and their favorite JetBlue destinations and the company was taken over by the show/film's businessman villain Montgomery Burns.mydesert.com The Desert Sun Palm Springs news, community, entertainment, yellow pages and classifieds. Serving Palm Springs, California. The Desert Sun. Retrieved December 22, 2010.
In August 2007, the airline added exclusive content from The New York Times in the form of an in-flight video magazine, conducted by Times journalists and content from NYTimes.com.
On November 8, 2007, JetBlue appointed Ed Barnes as interim CFO, following the resignation of former CFO John Harvey.
On December 13, 2007, JetBlue and Germany-based Lufthansa announced JetBlue's intent to sell 19% of JetBlue to Lufthansa, pending approval from US regulators. Following the acquisition, Lufthansa stated they planned to seek operational cooperation with JetBlue. Lufthansa planned to offer connections to JetBlue flights in Boston, New York (JFK), and Orlando International Airport (no longer a connection).Lufthansa Partnership. July 30, 2008. After making a codeshare agreement with Lufthansa that went into effect in 2010, JetBlue transitioned to the Sabre reservation system/ Lufthansa Takes JetBlue Under Its Wings. (December 14, 2007). Retrieved April 25, 2014. enabling the airlines to sell tickets on each other's flights, transfer luggage and passengers between the two carriers, and combine frequent flyer programs. By making use of JetBlue's North America routes as a feeder network, the agreement put Lufthansa in a position to operate quasi-hubs in New York–JFK and Boston Logan.
In the March edition of Airways Magazine, it was announced that once JetBlue partnered with Yahoo! and with BlackBerry producer Research in Motion, that the airline would offer free, limited Wi-Fi capabilities on a single aircraft, N651JB, an Airbus A320-200 dubbed "BetaBlue". People could access e-mail with a Wi-Fi capable Blackberry, or use Yahoo!'s e-mail and instant messaging with a Wi-Fi capable laptop, while in flight over the US. LiveTV in Melbourne, Florida, created and operated the "BetaBlue" prototype. The "BetaBlue" system utilized the bandwidth and infrastructure of defunct Airfone.
On March 19, 2008, JetBlue added Orlando, Florida, as a gateway focus city to international destinations in the Caribbean, Mexico, and South America. New international routes from Orlando International Airport included Cancún, Mexico; Bridgetown, Barbados; Bogotá, Colombia; Nassau, Bahamas; San José, Costa Rica; and Santo Domingo, Dominican Republic. In conjunction with the addition of new routes the airline continued significant expansion of operations at Orlando International Airport including a 292-room lodge that houses trainees attending the existing "JetBlue University" training facility, which opened in 2015.
On May 21, 2008, JetBlue named Joel Peterson chairman and Frank Sica vice chairman of its board of directors, replacing David Neeleman, who had stepped down as CEO in 2007.
On August 4, 2008, the Associated Press reported that JetBlue would replace their recycled pillows and blankets with an "eco-friendly" pillow and blanket package that passengers would have to purchase for use. This decision was in a series of moves designed to increase revenue. JetBlue told the Associated Press that it expected to collect $40 million from passengers selecting seats with extra legroom and $20 million from passengers paying $15 to check a second bag. In September 2008, JetBlue began charging passengers $10–30 for an extended-leg-room seat depending on the length of the flight.
In September 2008, JetBlue began operating Republican vice presidential candidate Sarah Palin's campaign aircraft, an E190.