JetBlue's Craziest Idea Yet

The blogosphere is all a-twitter over a pair of too-good-to-be-true sales announcements this morning. First up, Best Buy's (NYSE: BBY  ) amazing offer to sell you a 52-inch Samsung plasma for $9.99. Sadly, that one's a goof. Best Buy posted the wrong price on its website, and refuses to honor it. But the other deal is for real. JetBlue (Nasdaq: JBLU  ) really will let you fly anywhere in the U.S., as often as you like, for $599 flat.

Dubbed the "All-You-Can-Jet Pass," this deal only runs through August 21 -- so you'll have to act fast. Here's what you get for your $599:

  • The right to fly anywhere (that jetBlue goes) in the U.S., as often as you like, between September 8 and October 8, 2009.
  • The price includes taxes and fees (save for international flights and Puerto Rico.)
  • You must reserve your flights at least three days ahead of time.
  • And if you've already bought a ticket within this timeframe -- no sweat. Pay the difference between your ticket and the $599, and you can upgrade to the Pass.

Now, I'm sure some call this is dumb move. All it takes is one smart cookie taking a pair of roundrip flights between JFK and San Diego for JetBlue to begin losing money on this deal. But there are several reasons I like it.

This deal has much in common with similar "all-you-can-eat" offers from salesforce.com (NYSE: CRM  ) , AOL, and Netflix (Nasdaq: NFLX  ) -- for on-demand software, dial-up Internet access, and DVD rentals respectively. If the concept didn't "work," it wouldn't be so popular.

Also, JetBlue has wiggle room here. No fair hogging reservations -- if you book a flight but don't show up, you pay a $100 no-show fee. (Fare's fair.) You must plan ahead for reservations (something we Americans aren't always so good at.) And there's a limited supply of Passes available -- so JetBlue can cut its losses short if necessary.

Foolish takeaway
On the plus side, consider that a customer "locked in" to the Pass now is a customer motivated to not to patronize JetBlue's rivals. You don't order the salad bar at Pizza Hut, then dodge next door to McDonald's for a burger. And you don't shell out $600 to jetBlue for unlimited travel to then patronize American (NYSE: AMR  ) , United (Nasdaq: UAUA  ) , or Southwest (NYSE: LUV  ) during that time period. And in the meantime, jetBlue gets use of your money and some extra publicity.

Also, the Pass goes active during a slow time for air travel. Vacations are over. No major holidays on the calendar. Kids back in school. If ever there's a time to get creative with stoking demand, this is it.

Like I said, there are many reasons to like the All-You-Can-Jet Pass -- yet I have room for only a few up above. Now it's your turn to fill in the blanks. Why do you like JetBlue's offer? Where do you see strings attached? Were we too hasty in "selling" JetBlue from the Motley Fool Stock Advisor portfolio? (Read why we did so here.) Post your comments down below.

Salesforce.com is a Motley Fool Rule Breakers recommendation. Best Buy and Netflix are Motley Fool Stock Advisor picks. Best Buy is a Motley Fool Inside Value pick. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Smith does not own shares of any company named above.You can read The Motley Fool's disclosure policy as many times as you like, and it won't cost you a cent.


Read/Post Comments (7) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 13, 2009, at 6:48 PM, waveonshore wrote:

    I love JetBlue's Idea... it is innovative and not unlike the Eurorail Pass used by Europeans. I wish the other airlines were as creative (where are you Continental.. I'm a fan).

  • Report this Comment On August 13, 2009, at 9:42 PM, kamuirei wrote:

    Jet Blue is still in business?

  • Report this Comment On August 13, 2009, at 9:50 PM, kamuirei wrote:

    Earnings per Share (07/23/2009) $-0.09

  • Report this Comment On August 14, 2009, at 5:21 PM, jdyahoo wrote:

    I always thought something like this would be a good idea for gas stations. You purchase a $200 or $300 gas card at Shell or Exxon for a discounted price per gallon.

    Then you use up the "gallons" (not the dollars) on that card. This will always direct you to the same brand of gas station.

    However, I'm not sure how well it would work, since most gas stations are franchised.

  • Report this Comment On August 15, 2009, at 1:11 AM, TMFDitty wrote:

    Interesting thought, jdyahoo.

    And personally, I'd jump at the chance to buy a few hundred thousand cubic feet of natural gas at today's prices. The local gas utility doesn't seem too keen on the idea, however.

    --TMFDitty

  • Report this Comment On August 16, 2009, at 3:08 AM, memoandstitch wrote:

    There is already a website that lets you buy oil futures in the form of gift cards. TMFDitty, I don't know how much a few hundred thousand cubic feet of natgas is but you might want to trade natural gas futures.

    Back to JetBlue, I think it will suffer from adverse selection. Either the promo doesn't sell many passes or they lose money on a lot of passes. It is still an inexpensive way to create buzz though.

  • Report this Comment On August 17, 2009, at 7:20 PM, 777737GSI wrote:

    Jet Blue: Inovative Creative, Stupid. A company with a cash flow problem will grasp at ways to get cash but the company only lasts as long as the cash comes in. When the cash is no longer coming in, the rush is over, the euphoria unsupported, comes the crash and the company will be in a cash flow problem all over again, only worse. People are not loyal, they seek the lowest price and want a Grayhound bus. This loonie program is probably the brain child of some Ivy Leage MBA Graduate with no worldly experience other than listening to some worthless professor expounding on how to be an idiot. Today thinking only, I'll grab what I can today, screw tomorrow as I'ill be working for someone else anyway.

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