April 11, 2013 | 10:08 am | Print
By Alexander Britell
With American Eagle’s departure from the Caribbean, there will be a sizable void to fill. As we’ve covered of late, small carriers like Cape Air are increasing capacity and looking to capitalize on the ever-present demand for efficient airlift in the Caribbean. And while Eagle is out of the picture, another large player remains: JetBlue. The New York City-based company has been steadily increasing its coverage in the region, with new markets like Grand Cayman and the Dominican Republic’s Samana and an increased presence at San Juan’s Luis Muñoz Marin Airport. But what are JetBlue’s plans going forward? And what does its continued presence mean for the region? To learn more, Caribbean Journal talked to Chad Meyerson, global sales director at JetBlue.
What are JetBlue’s major priorities for the Caribbean going forward?
For us, the story in the Caribbean is growth. There are such huge opportunities there for expansion, not only with our current markets connecting to other gateways, but always expanding and opening up new markets. I think we’ve shown that, over the years, this is a profitable region for us and a very good fit with our network.
JetBlue has been expanding to new markets like Grand Cayman, Samana of late. How have those markets been performing so far?
We’re very pleased with how the markets are shaping up. Obviously not every one is profitable from Day 1, but the selection process we go through in setting up new markets is fairly rigorous. We run the analysis, so when we come into a new market, we have done a very good amount of homework. So a market like Samana is very different than a Grand Cayman, so there’s a lot of awareness that has to be done. Grand Cayman is well known, but the price has fluctuated. But with the region in general, we are tracking on pace or even ahead in some cases as to how we have performed. There are always opportunities for growth and expansion.
Talk about JetBlue’s hub in San Juan.
San Juan has grown quite a bit in the past. We saw an opportunity in the region and really jumped on it. The landscape has changed significantly, as we have come in as the largest carrier in Puerto Rico, so there are a lot of opportunities. This summer, there will be new service between San Juan and Santiago (in the Dominican Republic), we’re ramping up Santo Domingo and recently added service through the past year through St Maarten, St Thomas and St Croix.
How do you see the potential for San Juan in light of American Eagle’s departure?
One thing we’re clear and honest about is that we are not going to come in and add every single route the competition has dropped over time. We want to look for where the opportunities are. We believe there are opportunities. American has abandoned a lot of markets, so destinations, when they lose service, they come to us and say, “we’re losing American, let’s get JetBlue.” So we have those conversations, we run the analysis. But we want to see if the demand fits within our strategy, so we can serve a market long term. The other thing to keep in mind is that American Eagle has been running routes with much smaller aircraft, and JetBlue’s smallest plane is 100 seats. So [a given market] may not be an immediate fit for JetBlue. We want to make sure the markets are able to bear and support those types of aircraft. So yes, there are opportunities, but we’re not just going to jump in and add every market American Eagle dropped, but we have had discussions with different destinations.
How are you working with some of the smaller carriers that are trying to fill some of the lost seats?
We already have a very good working relationship with Cape Air, for a number of years, with a little more focus on the Northeast in the Boston area, with Cape Air in Nantucket and that region. We have seen, in recent years, that relationship expand now for Cape Air through San Juan. So our the opportunity to see that and have our customers to connect on Cape Air is really great. There are two areas of opportunity: one is the unmanaged side, so customers flying JetBlue to San Juan and booking their own travel with Cape Air or smaller carriers. The other side is the managed side, where a customer can book a flight to Tortola connecting in San Juan and actually pass his bags [through] to Cape Air. So there are those opportunities. We’re happy to have connections from San Juan to other islands that we can’t service with our larger planes.
American has been expanding out of Miami, and adding new destinations like Martinique and Guadeloupe, where Seaborne is also expanding. Are those destinations that are on your radar?
We spend a lot of time running the numbers and the data. We have a team whose entire job is to look at a market and see how many passengers they have now, and if we added service, how much it would stimulate, and how much we could bring to the table. So we looked at every destination — if there’s a limitation on demand and there’s not enough to support more aircraft, or sometimes it’s an issue of disuse — certain airports we cannot land on just because of runway lights or other situations. For others, you’ve got runways in place, but they need to expand their hotel infrastructure to support it. So others might just not have quite the demand yet, so we’re just watching it. So we’re constantly looking at all the islands to find when we can fly there.
Could JetBlue ever expand into a regional carrier, with intra-Caribbean travel?
I think that the region, from our perspective, is constantly evolving and shifting. I think that there have been a number of different carriers and strategies for the different islands. At a lot of the conferences we attend, they come to us and say, “hey, how can JetBlue really be the Caribbean’s airline and connect all the islands?” It’s a very different proposition, and no one has ben able to do it perfectly in the past. It’s a unique region. There are customers that fly between all the islands, but in order to really fly between all the islands, you need a variety of different aircraft types and options. You need planes that take 10 people or 200 people. That is going to be developing all the time. Airlines come and serve parts of it. We found an opportunity with San Juan. You’ve got Cape Air, Seaborne. But it’s something that’s evolving in terms of who the players are, what aircraft can do effectively and from an operational standpoint in serving the customer.
What would you say is the biggest challenge you face in entering new Caribbean markets?
Taxes are a very serious issue. Quite often the price of a ticket is less than the tax on the flight to the island, even though it’s a one-hour flight. So some of the tax issues weigh greatly on customers that otherwise might go. A lot of destinations, when economies are not strong, they look to tax the aircraft, because we come anyway, for extra revenue. But there’s a limitation as to what the customer is going to pay. Some will go to a different island. The traveler can get more for the money going somewhere else.