JetBlue’s premium market entry to cut into AA, Delta profits

The entry of JetBlue Airways into the premium market by introducing business class flights services on transcontinental routes is expected to significantly impact the profitability of legacy carriers like Delta Air Lines, American Airlines and United Continental, media reports said recently.  JetBlue Airways had last year announced that it will be introducing its premium cabins on flights to San Francisco and Los Angeles from New York’s John F. Kennedy International Airport. The airline will be introducing such cabins for its premium passengers for the first time.

JetBlue Airways has indicated that it will be offering cheap business class tickets to attract premium traffic significantly. The airline wants to make quick gains by making a dent in the market share of legacy carriers by attracting small and medium businesses. JetBlue Airways’ entry into the premium market might prove to be damaging for the legacy carriers as it will cut into their profitability. The reports hinted that there are high possibilities of a price war among these carriers which will ultimately stand to benefit the customers only. The legacy carriers have said that they are not going to sit idle and see their profitability decline as they want to keep their premium cabins busy.

Jet Blue Airways has stated that it finds the New York JFK-San Francisco and New York JFK-Los Angeles quite profitable as the revenue on both these routes is more than 50 percent higher than for any other domestic route because of the high concentration of premium customers.