JetBlue soars in first months

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JetBlue Airways, which this week will release its first six-month business report, has managed to fly clear of the turbulence rocking the airline industry. And the 8-month-old airline is touting its strategy of low fares and low costs in a new wave of advertising.

Last week saw the debut of billboard ads created for the carrier by Arnold Communications, Boston. Arnold will launch JetBlue's first-ever TV spots by Oct. 1, as part of a new brand campaign. The spots will play to growing frustration felt by air travelers in recent years.

Airlines face a definite crowd problem, said Kathy Keefe, media relations director for the Travel Industry Association. "Increased business travel and frequent-flier programs are contributing to higher load factors," she said. "In addition, there's no real incentive to drop fares because demand for air travel is so high in this booming economy."

The number of airline passengers has doubled since 1980, according to the Federal Aviation Administration, which estimates 640 million people will board flights this year. Record delays and cancellations have seized an industry seemingly incapable of handling or even listening to an unprecedented volume of customers.

Big airlines continue to swallow small ones. And as individual airlines get swallowed up, travelers are concerned about rising fares while airlines worry about brand identity.

BLUE SKIES

But it's mostly blue skies in JetBlue's business report. August was the company's first profitable month, with 30% of total bookings made on its Web site (jetblue.com) and the 500,000th passenger boarding last week. Also released in the report were customer complaint/baggage lost records by the U.S. Department of Transportation. By November, the company plans to announce construction of its new terminal at JFK International Airport, designed by architects Davis Brody Bond.

JetBlue's branding efforts have given the airline a singular identity. The buzz about JetBlue's style and low fares beat the airline's first appearance out of the hangar; profiles appeared in Conde Nast Traveler and New York Magazine in December and January, respectively.

JetBlue, formerly handled by Merkley Newman Harty, New York, mounted a fresh face in May via Arnold.

CLASSY AIRLINE

"JetBlue's got amazingly low fares, but it's also got class; we want to communicate that the company is human, fun and smart," said Barbara Reilly, group account director at Arnold.

The new billboards -- featuring taglines such as "$79 to Florida. Quite a bargain, considering it's $3.50 to Queens" -- target New York commuters at the Queens-Manhattan Midtown Tunnel.

Above ground, JetBlue has taken off with new Airbus A320 planes, low fares (New York to Los Angeles and Oakland runs $99-$249 one way), snazzy staff uniforms, more legroom, wider seats, e-tickets, toys in the terminals for kids and even blue tortilla chips onboard. JetBlue also offers live TV.

Via a special agreement between NBC and DirecTV, JetBlue will debut the NBC cable networks' coverage of the XXVII Summer Olympic Games from Sydney to its passengers at no charge on every seat, on every flight. From Sept. 13 to Oct. 1, JetBlue will air NBC's full schedule of Olympic coverage including CNBC and MSNBC telecasts.

JetBlue's style is designed to recall a time when air travel was a sophisticated venture and flying a less common experience. Ironically, today a low-fare carrier with no class distinctions on its planes is providing a sense of upscale care. "JetBlue is about technology and design as well as customer service," said Gareth Edmondson-Jones, JetBlue's VP-corporate communications.

0VERCOMMUNICATING

Amy Curtis McIntyre, VP-marketing at JetBlue, said the airline sells itself on overcommunication. "Because the industry is in such a sad state and because the American consumer is so skeptical and burned out, we say everything as clearly and briefly as possible," Ms. Curtis McIntyre said. "We only promise what we can deliver."

"We offer amenities that don't cost a lot," Mr. Edmondson-Jones said, "but have a high value perception in terms of customer satisfaction. Leather seats cost twice as much as cloth, but last twice as long, and new planes save us huge maintenance costs. Because our cost-structure now is about one-half of the major airlines', we can offer extremely low fares -- about 65% less than the majors -- with quality service."

Despite a strong start, JetBlue is still far below the big boys. Stephen Klein, an airline transportation analyst at Standard & Poor's, said, "At this point they're too small to threaten any major airlines in terms of prices. We'll just have to wait and see. Start-up carriers tend to struggle for a couple of years. If they make it past that point, then we've got something to follow."

IN EIGHT CITIES

JetBlue currently has eight planes servicing eight cities, with a new aircraft being added every five weeks, representing a new city served. With 10 new aircraft a year and upcoming red-eye flights, the company plans to launch a dozen new destinations a year, including Boston, Chicago and Washington. As of Nov. 17, the airline will offer JFK to Salt Lake City service for $99 one-way.

"We've built an infrastructure for a much bigger airline than we are right now," Mr. Edmondson-Jones said.

Is JetBlue the next Southwest Airlines, that classic model of a successful start-up? "Southwest is a financial and operations model of how JetBlue might want to succeed, but brand-wise we're worlds apart," Mr. Edmondson-Jones said. "While they're down-home Texas, we're New York-savvy."

Apparently, New York-savvy doesn't necessarily mean unfriendly. "The new ad campaign tries to separate JetBlue from the rest because consumers are sick of bad service," Ms. Reilly said. "We're selling the idea that JetBlue is the way travel is supposed to be."

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