Onboard TVs, service have helped young air carrier turn a profit

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I don't know if this was posted before but came across the story that is=20
about a week old...

03/31/2003 - Updated 11:40 AM ET
Onboard TVs, service have helped young air carrier turn a profit
By Jay Loomis, The (Westchester, N.Y.) Journal News

NEW YORK =97 Four years ago, Bill Basher expected to lose his job as an=20
air-cargo pilot. The carrier where he worked was cutting payroll following=
=20
a buyout. But at 53, Basher didn't feel good about his chances of landing=20
another job in the cockpit.
Then he heard about startup JetBlue Airways. Heavy-hitters backed the=20
airline, including billionaire investor George Soros. But it was no sure=20
thing. The airline didn't have government approval to fly. In fact, it=20
didn't have an airplane. Still, Basher signed up as one of the first 24=20
pilots. "I rolled the dice," said Basher. "It's been seventh heaven ever=20
since." Since its inaugural flight in February 2000, JetBlue has bucked the=
=20
conventional wisdom, not only with televisions in each leather seat, but=20
with its financial performance. Profits jumped 37% in the fourth quarter of=
=20
2002 as sales nearly doubled. In three years, the Queens-based airline=20
became the largest domestic carrier at John F. Kennedy International=20
Airport. JetBlue flights transported 5.7 million people nationally last=20
year, nearly double the 3.1 million it carried in 2001. "They have done a=20
great job of identifying niche markets that other airlines aren't serving=20
well," said Jim Corridore, an analyst with Standard & Poor's in New York.=20
"They are doing it with new planes, good service and reasonable fares."

JetBlue's competitors are reporting record losses, filing for bankruptcy=20
relief, retiring planes and laying off tens of thousands. Thanks to the=20
lowest costs in the industry, JetBlue has weathered an economy racked by=20
terrorism, rising fuel prices and war worries. "Working here is a totally=20
different experience than most airlines," Basher said. "It is almost like a=
=20
family. You have open lines of communication to all levels of management."=
=20
Chief Executive Officer David Neeleman tries to keep those  communication=20
channels open by flying once a week. On those flights, he will chat with=20
passengers, hand them snacks and greet them over the intercom. In the=20
office, he ponders such ideas as separate restrooms for men and women. "The=
=20
hallmark of JetBlue is not just the TVs but the service," Neeleman said.=20
"It's the way people feel when they fly the company, when they check in."=20
Passenger loyalty has helped JetBlue planes fly with an average of 80=20
percent of their seats full, better than the 70% industry average,=20
according to Pincavage & Associates.

"The TVs have turned out to be more popular than anyone expected," said=20
Raymond Neidl, an analyst with Blaylock & Partners in New York. A beachhead=
=20
at JFK was an important part of JetBlue's strategy from the beginning.=20
"What we found in this market was that after the demise of People Express=20
(in the 1980s) that there really was no low-fare competition," Neeleman=20
said. "We also found an airport that was very underutilized in Kennedy. You=
=20
have 5 million people who live closer to that airport than any other=20
airport." Of the airline's 182 daily flights, 74 are based at JFK. JetBlue=
=20
now serves 20 cities nationally. The company went public in April 2002. Its=
=20
stock trades around $25 a share. Rival stocks are trading at $5 a share and=
=20
less. Neeleman is optimistic about JetBlue's future. "We have 40 airplanes=
=20
today, and we have a total of 137 on order," Neeleman said. "People always=
=20
ask, what keeps you up at night? What worries you? How big can this get? It=
=20
depends on how good a job we do going forward."
Analysts said the biggest risk for JetBlue is overexpansion into=20
money-losing markets. "They have been intelligent in how they have expanded=
=20
so far," Corridore said, "but there is always a potential risk."


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