N1: Despite anticipated losses due to higher fuel costs, JetBlue
is announcing new routes. Its expansion comes at a time when most major airlines are cutting flights in order to survive. The founder and CEO of JetBlue is David Neeleman.
AXNeeleman: We are a growth company. And you know it's not a growth company with an asterisk: "if fuel prices go up." We think we have a better product. We build a better mousetrap.
N2: JetBlue began new routes from Newark Airport to Florida two
weeks ago and in the past couple of days it added more flights to Florida. These routes were set-up to compete with the financially strapped Continental Airlines. On JetBlue's first day of service from Newark, the airline's ticket counters were busy.
AxEvans: Where are you traveling to today?
Ax Brickwood: Orlando
N3: Rose Brickwood is a passenger from Hillsdale, New Jersey and she's flying JetBlue for the first time.
AXBrickwood: I've heard good things about JetBlue. Their rates, I've heard about their service and that it's very easy to get through their desk and all, so that's why we chose it. I'm expecting good things from it.
N4: JetBlue tries to stand out among its competition by offering
in-flight television, leather seats, and specialty blue potato
chips. But the company's high revenue is due to its low operating costs. It follows a model pioneered by Southwest Airlines, headquartered in Dallas, Texas. CEO Neelelan is a former employee of Southwest. When he left to start his own company, he took the principal of sustaining low overhead costs with him. Douglas Abbey is an aviation consultant in Washington D.C. he says that JetBlue's low-cost business model is what makes it successful.
AXABBEY: JetBlue is basically taking the fundamental Southwest model, tweaked it a little bit, and clearly has created a class of airline that few can touch. Their prospects are very good going forward.
N5: Although experts are confident in JetBlue's future, the airline still faces the hard reality that others in the industry are
confronting in the coming months: higher costs and lower profits. CEO Neeelman says that this will result in higher ticket prices and the oil refineries are to blame.
AXNEELEMAN: We certainly have to raise our fares a little bit to
cover the costs of fuel. It's going to be some rough spots in the
road here as we kind of get these refineries going and as things
get back to normal.
N6: Analysts say that customers should expect to see airlines
beginning to restructure their businesses in the low-cost model of Southwest and JetBlue. I'm Jamie Wong, Columbia Radio News.