Low-cost U.S. carrier JetBlue Airways Corp. is applying to launch charter and scheduled service between Canada and the United States, a move that is expected to shake up Canadian rivals and reduce transborder fares.
JetBlue, which built its reputation on a combination of low fares and in-flight services such as free snacks and seatback screens with live television, proposes to use 150-seat Airbus A320s and 100-seat Embraer ERJ-190s for new flights into Canada.
The airline's chairman, David Neeleman, is no stranger to the Canadian market, formerly serving as a WestJet Airlines Ltd. director during the Calgary-based carrier's first three years of operation.
JetBlue spokesman Sebastian White confirmed yesterday in an interview that JetBlue has its eye on Canada, starting with private charter flights next spring. Mr. White said commercial service would take longer to introduce because JetBlue, based in Forest Hills, N.Y., is awaiting regulatory approval before embarking on talks with Canadian airports for scheduled slots.
"There's no real meaningful low-fare competition on transborder routes," Mr. White said.
He said JetBlue prides itself on low fares, using the example of a person wanting to fly on short notice: On Air Canada, a round-trip ticket would cost $1,290 between Toronto's Pearson International Airport and New York's LaGuardia Airport, compared with JetBlue's cost of $295 or $309 (U.S.) between Buffalo and the airline's New York hub at John F. Kennedy International Airport.
JetBlue's foray north comes amid much excitement about transborder routes, including plans by former WestJet executives, led by WestJet co-founder Tim Morgan, to start a Calgary-based charter service to carry passengers in smaller Canadian cities to large U.S. centres and sun destinations.
Toronto-based Porter Airlines Inc. plans to expand into the United States next year, while Air Canada already has beefed up its foreign schedule and WestJet is adding new destinations in the U.S., Mexico and the Caribbean. Virgin America is pondering adding Canada to its route map.
Mr. Neeleman left WestJet's board in 1999 and founded JetBlue, starting flights within the United States in 2000. He is the former president of Salt Lake City-based Morris Air Service, which was acquired by Dallas-based discounter Southwest Airlines Co. in 1993.
"Canada is on our radar, but the key is finding competitive airport fees and the costs have to come down," JetBlue's Mr. White cautioned. While JetBlue doesn't have immediate plans for scheduled service into Canada, it is scouting out potential Canadian sites for the long term, he said.
Its Embraer ERJ-190 jets give the airline the flexibility to consider places such as Calgary and Halifax, where it would be harder to fill the larger Airbus A320s. A major stumbling block to JetBlue's entry at Pearson will be the Toronto airport's landing fees - the highest in the world, according to a survey by the Air Transport Research Society.
JetBlue's application for scheduled service leaves the door open for Canadians to fly to the carrier's New York JFK hub, where there would be connections to sun spots such as Mexico, the Dominican Republic, the Bahamas and Bermuda. Other key U.S. terminals for JetBlue include Boston, Long Beach, Calif., and the Florida cities of Fort Lauderdale and Orlando.
JetBlue enjoyed years of heady success financially and in its operations until it was forced to cancel 1,700 flights due to storms last winter, stranding 130,000 travellers. The carrier mounted an aggressive public relations campaign in February to win back consumer confidence, apologized and introduced a customer bill of rights. It now offers automatic vouchers for up to the full price of a ticket for flight delays and other operational miscues.
JETBLUE (JBLU)
Close: $9.27 (U.S.), up 11¢
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JetBlue's history
FEBRUARY, 2000: JetBlue founder David Neeleman, a former WestJet director, launches low-cost carrier with a flight from New York to Fort Lauderdale, Fla.
SEPTEMBER, 2005: First carrier to take delivery of Embraer ERJ-190.
JUNE, 2006: Seven new gates added at its JFK Airport hub in New York, raising number of JetBlue gates to 21.
FEBRUARY, 2007: Introduces customer bill of rights, the first in the airline industry, days after the worst setback in its history - cancelling 1,700 flights because of winter storms. Stock slumps.
MAY, 2007: David Barger named JetBlue chief executive officer, replacing Mr. Neeleman, who stays as chairman.
OCTOBER, 2007: Condé Nast Traveller magazine readers name JetBlue as best U.S. airline for sixth consecutive year.
Brent Jang