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Jet Blue Offers Budget Travel
30 months ago, David Nelleman had a very detailed business plan, 130 million dollars and a fair amount of experience starting up low-cost airlines. Today, he’s got a 1.9 million dollar publicly-traded company that’s shaking up the airline industry and breathing a bit of fresh air into airline travel.
I sat down with him recently at New York’s JFK Airport, and began by asking him what he was trying to accomplish, with his young upstart Jet Blue.
What we are trying to do with Jet Blue is what we call, you know, the old adage is if you build a better mouse trap, people will be packed at your door, and what we try to do is to create the best coach products in the industry. It creates word of mouth, creates people wow it’s amazing, I’m gonna, you know, tell everybody about this.
From passengers to aviation insiders, to Wall Street analysts, Jet Blue Is the buzz of the airline industry, offering budget travel with a twist. The security of brand-new planes, the comfort of leather seats, the entertainment of free satellite televisions at each seat, all for a discounted price, as much as 65% lower than the competition.
CEO David Neeleman insists his cheap but sheik airline has just found smarter ways to please passengers and cut costs. Those seats, leather is easier to clean, and lasts twice as long as fabric. Those planes, they are not just new, but all one model Airbus A-320s which means lower training and maintenance costs. And the live digital TV, well, Neeleman says it’s worth the cost, Passengers love it.
Jet Blue only took to the skies in February of 2000, but it has already outperformed its rivals, turning a profit of nearly 40 million dollars in 2001.
So how in your second year of operation, and in one of the toughest years the airline industry has ever seen, will you able to achieve profitability?
Number one, I think we put together a great business plan and we really did create a better mouse trap in that we created this better product with the lowest cost in the industry and going lower. Because we get better economies, as we get bigger. Our revenues are up, our costs are down. We made money. But we not only made money, we made money in every single quarter of last year, and we made it without the help of government aid. We did get the government aids money that they distributed, but if you X that, we still made a profit last year.
Neeleman’s carefully crafted business model, is at the heart ot Jet Blue success. One key element is his choice of airports. With the exception of its home base, New Yor’s JFK, Neeleman avoids the big congested hubs. Jet Blue is coming and going at Long Beach airport, 22 miles outside Lo Angeles too. Looking for a West Coast base, Jet Blue secured 27 of the airports unused flight slot, and planned to fill them by the summer of 2003. But now this sleepy little airport has become a hotspot in the latest airline industry showdown. Other airlines protested Jet Blue’s control of empty slots. Certainly eager to add slots and flights of their own. American and Alaskan Airlines ultimately won rights to seven of Jet Blue’s slots on a temporary basis. Jet Blue accelerated its plan, adding 17 flights by this fall. As airline industry competition heats up, this may be a sign of more big battles at little airports to come.
In yet another sign that Jet Blue has hit the big time, it just announced the creation of its own frequent flyer program, called True Blue. IN a typical Jet Blue fashion, it’s just a bit different from the miles awarded at the big airlines, Jet Blue passengers receive points, and until the end of the year, double points for booking on their website. A hundred points earns a free roundtrip flight anywhere Jet Blue flies, the airline says that the True Blue is just its way of saying thanks.
尼尔曼精心打造的商业模式是Jet Blue取得成功的核心。一个关键要素是他对飞机场的选择。除了在纽约JFK机场的总部基地，尼尔曼避免拥挤的大型机场，寻求一个西海岸基地。Jet Blue在离洛杉矶22英里的长滩飞机场起降。Jet Blue订下了这个机场27个空闲时间段，计划在2003年夏天前都派上用场。但是目前这个沉睡的小机场成为航空界一决雌雄的抢手货。其他航空公司反对Jet Blue控制空余的飞行时间段，突然急切地想增加自己的时间段和航班。美洲航空公司和阿拉斯加航空公司最终只是暂时性地获得了Jet Blue的7个时间段。Jet Blue公司加速了计划，今年秋季之前将增加17条航线。航空业竞争打得火热，这也许预示着小飞机场上将有一场大战。
另一个标志着Jet Blue成功的信号是它最近宣布创立其特有的长期旅客项目，称作“True Blue”。与大航空公司按照旅客飞行公里数奖励客户略有不同的是，Jet Blue的乘客可获得点数。今年年底前，如果在网上订票，还可获得双倍点数。攒够100点就可以获得一张Jet Blue任何一条航线的重返机票。Jet Blue认为他们这个长期旅客项目是酬谢顾客的一种方式。