JetBlue marks IPO anniversary as rivals struggle NEW YORK (Reuters) =97 What a difference a year can make. Low-fare airline= =20 JetBlue Airways has shaken the very foundations of the U.S. airline=20 industry and foiled struggling rivals with a string of quarterly profits =97= =20 all within its first year as a publicly traded company. JetBlue hit the=20 ground running last April, with the biggest chunk of venture capital ever=20 secured by a start-up U.S. airline and a scalding hot initial public=20 offering. JetBlue's success since then has cemented its legitimacy in the=20 industry. The upcoming year could prove bumpier than JetBlue's last, as its= =20 far-bigger competitors fix their sights on its loyal passenger base, but=20 industry watchers still expect another strong showing from the airline.=20 "JetBlue will probably be 45% bigger, and just as profitable" by mid-April= =20 2004, Blaylock & Partners airline analyst Raymond Neidl said. "They've=20 carved out a niche, a loyal customer following, and people want that=20 service." The U.S. airline sector looks vastly different now than it did a= =20 year ago. No. 2 carrier United Airlines is now operating under bankruptcy=20 protection, and its No. 7 alliance partner, US Airways Group, just emerged= =20 from a bankruptcy restructuring. But three-year-old JetBlue and its more=20 seasoned competitor Southwest Airlines, the model for much of JetBlue's=20 business, have rubbed salt in their rivals' wounds by reporting profits=20 during the sector's worst-ever downturn. Throughout aviation history,=20 smaller airlines have tried to emulate the sheer enormity and the domestic= =20 and international reach of the biggest players in the U.S. airline=20 industry. But after more than $18 billion in losses by the largest U.S.=20 carriers over the past two years, everyone =97 even the industry stalwarts = =97=20 now wants to be like JetBlue. WAITING IN THE WINGS JetBlue will face stiffer and more desperate competition on its prized=20 routes this year. Continental Airlines, the No. 5 U.S. airline, is now=20 matching JetBlue's prices out of New York and simplifying fares between the= =20 Northeast and Florida, along one of JetBlue's main route corridors. "When=20 the largest airline in New York alters its pricing, we believe the hippest= =20 airline in New York is bound to see an impact," JPMorgan airline analyst=20 Jamie Baker said. Delta Air Lines is launching Song, a lower-cost carrier=20 that will operate as a unit of its parent, to try to win back customers who= =20 switched to JetBlue on key routes between New York and Florida and Las=20 Vegas. Song hopes to lure passengers with leather seats, live television,=20 and a playful mantra =97 all similar to JetBlue's. But if history is a=20 measure, Song's ties to Delta's heavier cost structure and big-airline=20 mentality will hurt its cause. JetBlue can make money on cheaper fares because its aircraft are nearly=20 new, its turnaround times are quick, and its labor force is not unionized.= =20 Song will be using pilots covered by Delta's more expensive labor=20 contracts. A string of major airlines have searched for success in the=20 low-fare market and found failure, including Continental with its=20 Continental Lite and United's Shuttle by United. But the market has grown=20 even more tempting. Low-cost air travel, generally booked by leisure=20 passengers, accounts for about 17% of the total U.S. market, Blaylock's=20 Neidl estimated. It could swell at least another 10% within five years,=20 airlines have said. Analysts say there is probably enough room in the East= =20 Coast market for both JetBlue and Song. The bigger question is not whether= =20 Song can beat JetBlue at its own game, but whether it can survive as a unit= =20 of Delta without confusing consumers and succumbing to unbearable costs.=20 JetBlue holds the third-largest share of the market between New York and=20 Florida, and generates 40% to 45% of its revenue from those routes,=20 according to JPMorgan research. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.carstt.com TnT Webdirectory: http://search.co.tt *********************************************************