COVID-19 caused air travel demand to shrivel up in 2020, forcing airlines to take a hatchet to their flight schedules. Despite these weak market conditions -- TSA checkpoint screenings have consistently been down more than 60% year over year, even during the peak summer season -- airlines haven't given up on new routes. In fact, some carriers seem to view the pandemic as an opportunity to experiment. JetBlue Airways (JBLU 11.76%) and United Airlines (UAL 4.16%) are both heading down this road, if recent new-route announcements are any indication.
JetBlue continues its opportunistic growth
Back in June, JetBlue announced 30 new routes designed to take advantage of short-term supply demand mismatches and generate cash in the second half of 2020. Leisure routes to Florida and the Caribbean made up the bulk of the new flights. JetBlue also committed to a significant expansion of its route network at Newark International Airport, challenging market leader United Airlines head-on.
Some of these new route introductions have sparked competitive responses. Others haven't even begun yet. That makes it hard to evaluate the success of this growth initiative. Nevertheless, JetBlue is doubling down on its strategy of opportunistic growth, announcing a batch of 24 new routes on Thursday.
The latest round of expansion includes further growth in Newark, with seven new international leisure routes launching in November. Two of those (to Aruba and Sint Maarten) will feature JetBlue's highly acclaimed Mint premium service on certain flights.
JetBlue also plans a big expansion in Los Angeles, where it is set to shift its focus city operation next month from Long Beach to LAX: the region's main airport. Between mid-November and mid-December, the airline will launch seven new routes at LAX. Four are transcontinental routes in underserved markets, while the other three mark JetBlue's first international flights from the LA region. Leisure routes -- mainly to Florida, Cancun, and the Caribbean -- accounted for the rest of JetBlue's recent growth announcement.
JetBlue said that it carefully picked its new routes based on where it expects increases in leisure travel demand. The new flying will help it boost aircraft utilization and keep its pilots busy. (JetBlue is one of the few airlines set to avoid pilot furloughs this fall.) Still, the airline isn't promising to keep these routes operating permanently: It will be nimble and reallocate capacity based on individual route performance.
United Airlines will try new routes, too
For the most part, United Airlines has been on the defensive in 2020. More than any other U.S. carrier, business travel and long-haul international flying are the cornerstones of United's business. Furthermore, United executives recognized the seriousness of the COVID-19 pandemic sooner than other airline management teams and aggressively cut capacity in response.
Nevertheless, United Airlines is planning to go on the offensive over the next year. Surprisingly, it is plotting growth in long-haul markets: exactly where demand has been weakest this year. On Wednesday, the full-service airline announced seven new long-haul routes that will take flight by next summer.
United's expansion will begin in December with new daily service from Chicago to New Delhi. This will complement its existing flights to New Delhi from Newark and San Francisco. The airline will add another destination in India in the spring of 2021, launching daily flights to Bangalore from San Francisco. United's global growth next spring will also include three new routes to Africa: daily flights between Newark and Johannesburg and service three times a week from Washington, D.C. to Accra, Ghana and Lagos, Nigeria. Finally, United Airlines plans to operate two new Hawaii routes four times a week next summer, connecting Newark to Maui and Chicago to Kona.
Several of United's new routes stretch the capabilities of its aircraft. That means it may not be able to carry a full load on certain flights. But in the current low-demand environment, that would be a high-class problem to face, so management doesn't seem concerned.
Expect mixed success
JetBlue and United Airlines are clearly taking a lot of risks with their new route introductions. With demand likely to remain depressed for the next two or three quarters (at least), the goal is to tap into near-term demand that other airlines may not be serving because of temporary cutbacks.
As demand rebounds over the next few years, airlines are likely to return to their usual strategy of focusing capacity on their strongest markets. Many -- and possibly most -- of the new routes announced this year won't make the cut. Still, if airlines cultivate even a handful of new markets that become highly profitable, that would be a nice long-term win in the midst of the devastating pandemic.