If you think "Dunkin Donuts" is too déclassé, you could always think of it as "Bain, Carlyle & Thomas H. Lee" coffee. Any one of the three is enough of an endorsement for most masters of the universe... Tyler Munoz wrote: >I'm a UAL guy and enjoy their Starbucks coffee, but I'm sure people from >New England will enjoy this news. > > >JetBlue to serve Dunkin' Donuts coffee >By Lauren Villagran, AP Business Writer, January 24, 2006 > >NEW YORK --When JetBlue learned that passengers felt airline coffee was >worse than their terrestrial brand of choice, the carrier decided to bet >on a familiar strategy to draw passengers: Link up with a well-known >name. > >JetBlue Airways Corp., parent of the low-cost airline, said Tuesday it >will begin serving 10-ounce cups of Dunkin' Donuts coffee on all its >flights by the end of the month. > >The deal is the airline's latest attempt to bring brand names on board >its planes. JetBlue currently offers satellite television and radio with >DirecTV and XM Radio and, for a $5 fee, FOX movies. > >Financial terms of the agreement were not disclosed. Eric Brinker, >JetBlue product development director, said the terms square with the >airline's low-cost model, however. > >"We're really able to justify having these partners in that, like we >have leather seats and DirecTV, we make it part of the product," he >said. "We think when you put all that stuff together, (fliers are) going >to come back to our airline." > >JetBlue, along with most major carriers other than low-cost rival >Southwest, is expected to post a loss for the fourth quarter as it >struggles with higher fuel costs and stiffer competition. Analysts at >two brokerage houses cut their ratings on the company's stock in early >January on concerns JetBlue has lost some of its cost advantage. Such >conditions put a premium on building customer loyalty. > >A recent survey of passengers by JetBlue found that roughly one-third >considered the coffee served on airlines worse than their daily cup, and >most named coffee as the drink they'd most like to improve, JetBlue >said. > >Some analysts believe that offering DirecTV, XM satellite radio -- or a >cup of name-brand coffee -- can draw passengers. > >Kent Grayson, an associate marketing professor at Northwestern >University's Kellogg School of Management who has studied the airline >industry, said a traveler's choice of airline centers on three things: >schedule, price and brand. > >"If JetBlue associates itself with well-known partners whose brand image >has some redundancy with theirs, at the margin, a customer may choose >JetBlue over another airline whose brand is not as strong," he said. "On >an abstract level, it makes people think JetBlue is a better brand." > >JetBlue and Dunkin' Donuts aren't the first to create such a >partnership. United Airlines parent UAL Corp. has had a similar deal for >years with Starbucks Corp., a relationship that was recently extended >for another three years. > >"Cross-branding that is done at the airlines is done at a very low price >or even for free," said Stefan Lumiere, a research analyst with >investment firm Oscar Gruss & Son. Although details of such contracts >are rarely released, Lumiere said airlines may even charge advertising >placement fees. "You're basically creating brand awareness." > >For Dunkin' Donuts, the deal offers access to a captive consumer -- who, >at 30,000 feet, has nowhere to go but the aft lavatory -- as well as to >coffee drinkers often outside the geographical limits of its roughly >4,400 locations on the ground. > >"We advertise on television and radio in markets where we have shops, >but this is a way to put our brand in front of consumers in other >markets," said Suzanne Agnello, Dunkin' Donuts director of marketing and >business development. "On an airplane, you've got that cup of coffee in >front of you for 20 minutes." > >Dunkin' Donuts, headquartered in Canton, Mass., outside Boston, has its >stronghold in New England. Its roughly 4,800 locations nationwide grow >sparse west of the Mississippi; the company has no stores in California. >Meanwhile, JetBlue flies to 34 cities in the U.S. and Caribbean, >including to seven in California. > >The doughnut-and-coffee chain has plans to triple its size to 15,000 >stores by 2020, and although its name may suggest otherwise, about 70 >percent of Dunkin' Donuts' sales come from the beverage and not the >baked goods. > >Last month, Dunkin' Donuts' former parent Pernod Ricard SA, a publicly >held France-based wine and spirits company, sold the chain to private >equity firms Bain Capital Partners LLC, Carlyle Group and Thomas H. Lee >Partners LP. > >JetBlue is publicly held and headquartered in Forest Hills, N.Y. >