Another Gamble for JetBlue

Experts say the long-term outlook for the onetime industry darling is unclear.

Two Models

Aviation consultant Scott Hamilton, who publishes an online industry newsletter, says JetBlue had to go into smaller cities, and chose one of two options -- the AirTran model with two sizes of airplanes or the Southwest approach, featuring a single airplane type.

The latter option does have a drawback, Hamilton says, in that it requires Southwest to sometimes operate its jets with lower-than-optimal load factors.

"What do you do in markets where the equipment is too big?" he asks. "Accept lower load factors and less frequency, or go to a smaller airplane type and complicate training, provisioning, spare parts and all the rest of it? JetBlue concluded that one size does not fit all. It will take a couple of years before we know if they made the right decision."

Aviation consultant Robert Mann says the E190 is more fuel efficient and more comfortable than any predecessor regional jet, and opens many new markets. "You go lower in the pyramid and there are vastly more markets to be served," Mann says. "In that sense, it is an opportunity, and an opportunity off the beaten track of the other low-cost carriers, who generally fly larger equipment."

The downside for JetBlue, Mann says, are high upfront costs for tasks such as training staff, from pilots to station agents, opening new stations and hiring new agents, providing spare aircraft, even at first, when only a few routes are operating, and spending time on route planning.

"Unfortunately, at JetBlue, the introduction was botched," Mann says. But he says he's generally optimistic about the carrier's future because of its strong position in the New York market and its potential in Boston and West Coast markets.

"I don't think they've done anything yet that is equivalent to shooting themselves in the head," he says. "So far, they have only shot themselves in the foot, and those things heal."