JetBlue goes upmarket with premium seats

The scrappy upstart airline has struggled lately, and some analysts question the wisdom of sacrificing coach capacity for more expensive options.

By Jonathan Berr Aug 5, 2013 2:30PM
A JetBlue jet at the San Diego International Airport, on June 19, 2012 (© Sam Hodgson/Bloomberg via Getty Images)JetBlue (JBLU), which has been the scrappy little airline that could since it was founded in 2000, hopes adding premium seating on some flights will help get it out of its financial funk.

As The Wall Street Journal notes, JetBlue will add what it calls "lie-flat" seats on New Airbus 321 aircraft starting next year on the popular New York-Los Angeles and New York-San Francisco routes where the company lags rivals.

The new seats will feature air cushions with adjustable firmness, a massage function, a 15-inch widescreen television and a "wake me for service" indicator for customers who choose to sleep in. JetBlue will also offer a completely separate single-suite seat that features a closeable door for privacy. Anyone who buys the premium seats will get hot meals and free alcoholic beverages.

Until now, the company had all-coach seating and didn't offer varying tiers of service. But, as the Journal notes, JetBlue had little choice but to shed its egalitarian roots, since that's not where the market is growing. Moreover, the upstart carrier has struggled lately.

Still, some experts are skeptical that the new seats will do much good for JetBlue. One analyst wonders whether the airline will be able to offset the loss of 31 coach seats with passengers paying higher fares.

"The real benefit of lie-flat seats comes on international routes," Jim Corridore, an analyst with S&P Capital IQ, told The Associated Press.
 
The company recently reported disappointing quarterly results. Shares have jumped by about 14% this year, underperforming larger rivals such as Delta (DAL), which saw shares surge by 85%, and Southwest Airlines (LUV), whose shares have jumped by 59%. J.P. Morgan analyst Jamie Baker found that JetBlue's decline in operating margin was the worst of any airline he covered, Reuters says.
 
JetBlue, which recently earned its ninth consecutive J.D. Power & Associates award in airline customer satisfaction among low-cost carriers, isn't forgetting about its other passengers. Next year, the company will "refresh the core JetBlue experience" with a new seat design with movable headrests, a new entertainment system with up to 100 DirecTV (DTV) channels, USB ports, and more legroom in coach than any other U.S. airline.

Whether Wall Street will be patient with JetBlue as the company tries to appeal to both casual and business travelers won't be apparent for a while.

 

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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7Comments
Aug 5, 2013 4:25PM
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Forget reconfiguring the planes.  Want to make more money?  Offer ADULTS ONLY flights.  I'd gladly pay a considerable amount more for a "no kids allowed" flight.  Better yet, make it ages 21+
Aug 5, 2013 5:02PM
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I like JetBlue and AirTran  They know how to treat passengers.  No-one is just a number with them,

 

Aug 5, 2013 5:14PM
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I think that's great.  Unfortunately, I don't have that kind of money to afford such luxury but it's nice to know that the service is available. 
Aug 5, 2013 5:47PM
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I love flying JetBlue, their seats are comfier they are friendly and the prices are cheaper. I love that they only have two row seats instead of the three rows that most of the bigger airlines have. No middle seat, what's not to love.
Aug 5, 2013 6:30PM
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I used to fly US Airways from Boston to Charlotte until I flew on JetBlue, haven't looked back yet. They are the best. I have had to fly on a SouthWest & Delta but that wasn't my choice and let me tell you SouthWest really sucks I was delayed in Philadelphia on a 1 hour layover for 9 hours and I felt like a herd of cattle being boarded with their boarding process. And flew on Delta in a tiny tiny little airplane where my head almost hit the ceiling and the seats weren't big enough for a pencil.
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