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Empty seats lead JetBlue to raise its discount-flier profile

December 24, 2006|James Gilden | Special to The Times

AS travelers shopping for online airfares know, some low-fare carriers' tickets can be booked only on their own websites. The only way to book a Southwest Airlines ticket online, for instance, is at www.southwest.com.

Websites such as Travelocity and Expedia do not list Southwest's fares for comparison with airlines such as United or American. And travel search engines such as SideStep and Kayak, which scan a range of sites, don't include Southwest's schedules and prices.

The same is true in Europe, where low-fare carriers such as RyanAir and EasyJet allow travelers to book only on their branded websites.

That's partly because distribution on an airline's own website is more profitable for the carrier. There is no middleman to take a cut. Ostensibly, then, consumers benefit as airlines pass the savings on.

But now, in what may signal a sea change, JetBlue is making itself available beyond its www.jetblue.com site. "As they've grown, they've realized that wider distribution at the right price will be beneficial to them," said Jared Blank, an airline industry analyst and publisher of the Online Travel Review (www.onlinetravelreview.com), an airline industry news website.

JetBlue added 16 new destinations in 2006, said Noreen Courtney-Wilds, director of sales and distribution for JetBlue.

But the company's November financial results may point to one reason it's exploring relationships with online travel agencies such as its alliance with Travelocity, which is still in the "experimental" phase. Through November, the number of available seat miles (a measure of airline capacity) on JetBlue increased by 21% from the same period last year, but the number of revenue passengers miles (a measure of sold seats) increased by only 16%.

In other words, more people were flying the airline, but it was flying with more empty seats than in the past. Eighty-five percent of its seats were filled last year compared with 82% this year, still good by industry standards but not the levels that JetBlue had grown accustomed to, Courtney-Wilds said.

"When you're running 90% [full], there's not any reason to go to additional channels" such as Travelocity, she said.

Consumers can still go to JetBlue and get the best fares it offers. By booking directly at the newly redesigned site, travelers save the $5-per-ticket fee tacked on by Travelocity for booking an airline ticket on its site.

I checked fares from Long Beach Airport, one of three local airports served by JetBlue, to New York's JFK and found the same JetBlue fares on Travelocity as on JetBlue.com. Travelocity did offer a flight on Delta, but it was not a nonstop flight and it was priced $140 higher than the JetBlue fare. (Travelocity declined to comment.)

JetBlue will decide around the first of the year whether the experiment is working and whether to add its fares to other online travel sites.

Don't look for Southwest to follow suit. Though it is growing and, in August, carried for the first time more passengers than any other U.S. airline, its growth has been more measured and largely achieved by adding more flights to destinations where it has already had a presence, analyst Blank said.

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Contact James Gilden at www.theinternettraveler.com.

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