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JetBlue Airways Disrupts Boston To San Francisco Market

JetBlue Airways MINT First Class

Experience The Skies has been updating blog readers on JetBlue Airways and its MINT® product for a while (refer to our coverage here for the MINT product and here focusing on Boston). As promised JetBlue Airways upgraded one of three daily flights from Boston Logan International Airport (BOS) to San Francisco International Airport (SFO) with an Airbus A321 featuring its highly praised MINT product.

JetBlue Airways

Starting March 24, 2016, JetBlue Airways’ morning 0800 (8am) flight from BOS to SFO will have the Airbus A321 aircraft featuring 16 MINT (First), 41 Even More Space (Economy Plus) and 102 Standard  (Economy) Seats.  On the return, the 1355(155pm) flight will feature the A321.

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These two flights would be the only ones out of 24 daily non-stop flights that will feature lie-flat seats in First Class. Other competitors with non-stop direct route include United Airlines (UA) with seven and Virgin America (VX) with two flights respectively. Both uses recliner seats in First Class on this route.

JetBlue Airways Boston to San Francisco Schedule
JetBlue Airways Boston to San Francisco Schedule – Information taken from JetBlue’s website. Infographic created by Experience The Skies on August 14, 2015 (All Rights Reserved)

JetBlue is expected to expand the use of A321 to all flights in 2016 and adding this onto its BOS to Los Angeles International Airport (LAX) in the Fall.

Analysis

Scheduling

From a scheduling perspective, it is interesting that JetBlue decided to showcase its MINT product on the onboard the A321 with the morning and afternoon flights first. Business travellers would have been more likely to catch the afternoon outbound and red-eye inbound options for work purposes.

Pricing

Non-Stop

JetBlue is very aggressive with pricing on this route (which is not codeshared with Emirates (refer to our coverage of the Middle Eastern airline’s expansion at Boston). For March 24, 2016, it has the lowest price on both economy and first class cabins compared to options from United or Virgin for non-stop service.

Boston to San Francisco Pricing March 24, 2016 (Non-Stop)
Boston to San Francisco Pricing March 24, 2016 (Non-Stop) – Pricing Information is accurate at publish time. Passengers are advised to check with airlines for the latest pricing (All Rights Reserved)

For one-way pricing, JetBlue is 1.8x and 2.3x less expensive than United and Virgin in economy and 0.15x and 2.5x less expensive in First Class (priced in $US). Roundtrip ticket prices yield similar results.

Note: Virgin America may be pricing too high for this two markets.

One-Stop or More

When factoring connections of one-stop or more, JetBlue’s pricing is second to Delta Air Lines in economy and is the most economical option in first (*passengers will have to connect onto a flight to New York JFK Airport which does not have First Class).

Boston to San Francisco Pricing March 24, 2016 (1 Stop +)
Boston to San Francisco Pricing March 24, 2016 (1 Stop +) – Pricing Information is accurate at publish time. Passengers are advised to check with airlines for the latest pricing (All Rights Reserved)

Economy

Outside of Delta, none of the competitors have a lower pricing offered by JetBlue for economy class factoring both non-stop and one-stop plus options. Normally, to incentivize passengers to travel longer distance/time, airlines would price one-stop+ options lower than non-stop.

First

JetBlue offers the lowest price for both non-stop/one-stop+ options. This speaks to their aggressive pricing strategy to capture marketshare. If pricing is the only determination, there is no reason for passengers to consider other airlines. Virgin, in particular, is possibly pricing this route too high to compete effectively.

Revenue

By placing the A321 with more seats and a First Class, JetBlue is increasing the maximum revenue it can earn on this route compared to the A320 used currently. As it has an above average First Class product than its competitors with this aircraft, the airline could become traveller’s first choice if pricing is the only consideration. Many travellers affiliated with other airlines’ frequent flyer programs may also be lured to try the product if the pricing and timing is attractive.

Competitors

United Airlines

United has the most to lose as this route goes to one of its main hubs in San Francisco. The airline may consider competing through pricing or utilize better aircrafts (such as the Premium Service Boeing 757s or international configured Boeing 757/767s) on this route. It should whether it should match or beat JetBlue’s pricing or use bonus frequent flyer miles to capture/keep passengers. Additionally, it should market itself as the airline of choice based on superior scheduling and connection possibilities.

Virgin America

The San Francisco based airline (refer to our coverage on Virgin America here) has higher pricing across the board in all classes of service for both non-stop and one-stop+ options. This does not bode well for the airline that market itself for a high value proposition. Pricing should be re-evaluated as Virgin does not have a better schedule on this route. While its First Class product is better than what is offered by what is offered on United’s narrowbodies, it may have been eclipsed by JetBlue’s MINT product.

Others

Other airlines may not as concern over this route given they do not operate a hub in San Francisco and is seeking feeder traffic for connecting flights. However, they will likely lose passengers to JetBlue given higher pricing for their one-stop options.

Final Call

JetBlue’s entry into the Boston to San Francisco with the MINT product is the first step in changing market dynamics. Competitor pricing will likely go down prior to the A321’s introduction.

 

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