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JetBlue’s transatlantic debut could disrupt the market
The much-anticipated launch of JetBlue’s first transatlantic routes has stirred up plenty of interest and has strong potential to be successful. With a new MINT business class and low fares on offer, the carrier will be well-positioned to capitalise on rising demand from budget travellers post-Covid-19.
The airline has set its sights on cashing in on the busiest city pair in the world – New York to London and serving the London to Boston market. Competition was fierce pre-pandemic on these routes, but the withdrawal of Norwegian Air from the market and the drop in capacity from others will give JetBlue a window of opportunity to establish a foothold in the market with its low fares.
Low fares will attract budget-conscious travellers
More consumers have become cash-strapped recently, and the transatlantic market is in need of low-cost competition. GlobalData’s latest Covid-19 recovery survey, taken in early December, showed that globally, 87% of respondents were ‘extremely’, ‘quite’, or ‘slightly’ concerned about their personal financial position.
Most carriers now offer basic economy fares on these city pairs, but JetBlue offers it as standard. The uniformity of the airlines’ offering, combined with its reputation for friendly service and low competitive fares, will see the airline stimulate demand and win customers who may have delayed traveling due to increased financial concerns.
Loyal business travelers could deflect to JetBlue
A poll conducted by GlobalData between November 2020 and March 2021 revealed that, as a result of the Covid-19 pandemic, 44% of respondents said their company’s corporate travel budget will significantly be reduced over the next 12 months.
Corporate travellers are likely to see JetBlue as a viable, lower-cost alternative going forward. Lower prices will see JetBlue attract corporate travellers working for companies with depleted budgets. The new MINT business class and elevated service level will allow the airline to compete on a level with existing carriers.
This winning combination could see JetBlue become a disruptive carrier that could substantially shake up the corporate transatlantic travel market.
Hurdles remain for JetBlue
Challenges remain for the market challenger, however. JetBlue is struggling to secure lucrative slots at London’s Heathrow Airport. The UK’s extension of use-it or lose-it slot wavier has placed a big hurdle in the carrier’s plans. Although it has secured some slots at Gatwick and Stansted, the split of operations over two airports adds operational costs and complexity the airline would want to avoid.
Only time will tell if JetBlue can secure the desired slots at Heathrow, and if it does, it will be a game-changer for the airline’s competitive position.
JetBlue’s London launch will disrupt the hyper-competitive transatlantic market. The airline will provide much-needed low-cost seats, and the presence of a competitive business class product could be what it requires to make the venture a success.
For more market data and analysis visit GlobalData's Travel & Tourism Intelligence Centre.
Main image credit: JetBlue
