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JetBlue, Southwest Battle for Boston

Stocks in this article: JBLU LUV AMR DAL LCC

JetBlue, by contrast, got its start in 1999 at Kennedy Airport; it approaches big city airports with no fear. Arriving in Boston in 2004, it has added flights in every year since. New markets this year include Washington Reagan National and Sarasota, as well as Phoenix. JetBlue's share at Logan has grown steadily from 5% and seven destinations in 2004 to 19.5% in December, according to OAG. And JetBlue continues to grow.

"We plan to increase our Boston departures by approximately 30% year-over-year this summer, accounting for 4.5 points of our expected 2010 capacity growth," said CEO Dave Barger on an April earnings conference call.

JetBlue's 2010 capacity growth of 6% to 8% will likely represent the biggest expansion in the airline industry. JetBlue plans seven daily departures to National. Meanwhile, US Airways is shrinking in Boston.

Aviation experts say post-2001 downsizing by network carriers, combined with favorable airport polices, has enabled Boston Logan to change course.

" Earlier , a lot of the low-fare demand was sucked north to Manchester or south to Providence, and what was left was premium business," said Robert Mann. "Boston became a high fare town."

Then travel fell off and carriers like Delta and US Airways restructured in bankruptcy. Between 1999 and 2009, the combined Boston Logan share for Delta/Northwest slipped from 31% in 1999 to 15% in 2009, OAG said. That opened up some gates.

Additionally, the long-planned Terminal A opened in 2005. The $400 million project replaced a building once occupied by Eastern and added about a dozen gates. Subsequently, Delta moved into A, freeing space for JetBlue, and Northwest joined Delta, freeing space for Southwest. The airport also has a policy requiring intensive use of gates: "No gate hoarding allowed," said airport spokesman Matt Brelis. "We're really land-constrained on 1,700 acres. We have to maintain our resources carefully."

Boston Logan "has become an amazing market for low cost carriers," said consultant Jeffrey Breen, president of Cambridge Aviation Research in Cambridge, Ma. "Delta chose before 2001 to go into the new terminal, and I think they committed to more capacity than they ended up needing. When Delta downsized, JetBlue got a foothold."

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