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Low-Fare JetBlue on Way to Charlotte: Carrier's Flights to N.Y. May Prompt Lower Fares From Others

Posted on: Thursday, 13 April 2006, 06:00 CDT

By Tony Mecia, The Charlotte Observer, N.C.

Apr. 13--JetBlue Airways, one of the country's largest low-fare airlines, plans to announce today that it will start flying this summer between Charlotte and the most popular destination from the city: New York.

The move could cut airfares between Charlotte and New York in half.

Beginning July 12, the airline plans four daily flights between Charlotte and New York's John F. Kennedy International Airport aboard new 100-seat Embraer 190 aircraft, with introductory sale fares as low as $138 round-trip, company officials told the Observer on Wednesday.

Once the sale ends, fares will range between $178 and $398 round-trip -- a savings of hundreds of dollars compared with what Charlotte passengers, especially business travelers, now pay to fly to the Big Apple.

Charlotte-area travelers could also catch connecting flights to cities in the Northeast -- including Boston, Pittsburgh and Buffalo, N.Y. -- as well as to the West Coast. While the airline flies to more cities, it won't necessarily offer connections to all destinations.

Although some discount airlines such as Southwest Airlines market themselves as no-frills, JetBlue has taken a different tack, advertising its service and on-board amenities such as XM Satellite Radio and live television as additional selling points. JetBlue, based in New York City, was founded in 1999 and has been pursuing an ambitious strategy of quick growth, adding destinations as it takes delivery of new planes.

"Now is the time to go with the North Carolina invasion," JetBlue Chief Executive David Neeleman told the Observer. "Our blue-bellied planes are on their way." The airline will also launch service from Raleigh-Durham International in July.

The arrival of JetBlue will almost certainly cause other airlines to drop their fares to New York. Only Delta Air Lines flies nonstop from Charlotte to JFK, though it's ending that service this month. US Airways, United Airlines, Continental Airlines, American Airlines and Delta fly nonstops to LaGuardia airport or Newark, N.J.

In the past, new service from a low-fare carrier has led others to cut fares dramatically. On Wednesday, the travel Web site Expedia was showing the cheapest nonstop flight to the New York area the first weekend in August at $386 round-trip, including taxes and fees. For a one-day trip starting today, the cheapest fare listed Wednesday was $692.

For years, local travelers have bemoaned the high fares from Charlotte and hoped the arrival of low-fare competition would help. As a US Airways hub, Charlotte has more nonstop destinations -- more than 120 -- than other cities its size, but average fares are relatively high because there's no competition on most of those routes.

Charlotte airport director Jerry Orr praised the new service, saying it gives Charlotte-area travelers another choice. But he predicted that the overall effect on Charlotte airfares will be "somewhat spotty," because lower fares will likely be limited to the few routes that JetBlue will serve.

Although high fuel prices are generally pushing ticket prices higher, some routes are also seeing lower fares. In January, US Airways announced it was cutting fares from Charlotte to nearly two dozen cities, after the airline's new Arizona-based management started studying East Coast fares.

JetBlue's arrival means that every major national airline will have a Charlotte presence except one: Southwest. Orr said he anticipates no upcoming announcements about Charlotte from Southwest, which has said in the past that it, too, would someday like to fly from Charlotte.

Other low-fare airlines have failed in Charlotte. ATA Airlines halted its service to Chicago in January 2005. Independence Air brought lower fares along the East Coast beginning in 2004 but liquidated this year after filing for bankruptcy protection.

Yet AirTran Airways, another low-fare carrier, started Charlotte service last year and recently announced it is adding another destination from here, Chicago, starting next month.

Moving into a hub airport is risky business, because established carriers typically drop prices to retain customers, who often prefer to keep their frequent-flier miles instead of switching airlines.

"If people in Charlotte want low fares, they have to support the guy who's bringing the fares down," Neeleman said.

Still, Neeleman said he's confident JetBlue will succeed in Charlotte because customers will enjoy the blend of service and low fares. In its six-year history, JetBlue has never discontinued a destination served from its New York base, he said.

"We've had large, competitive responses virtually everywhere we've gone, and we've been able to survive and thrive," he said.

Tony Mecia: (704) 358-5069; tmecia@charlotteobserver.com

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Copyright (c) 2006, The Charlotte Observer, N.C.

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Source: The Charlotte Observer (Charlotte, N.C.)

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