It's well known that high oil prices have not been kind to the airline industry. Given the airlines' cutthroat environment, it would appear that companies such as Southwest
This week, the low-cost carrier announced that it was basing the price of one-way tickets between New York and Houston -- the oil capital of the U.S. -- on the cost of a barrel of oil. It has dubbed the promotion "Blue Barrel Fares," and it's already increasing passenger counts on the company's new New York-to-Houston route.
According to reports, JetBlue also intends to make the "Blue Barrel" flights to Houston available from Boston, Pittsburgh, and Washington, D.C., as well as a number of other smaller East Coast cities.
With oil prices hovering around $71 a barrel, the business will lose about $45 per person per flight, but I think the ploy will pay dividends in the future. The company remains engaged in a fierce battle with both low-cost airlines and the legacy carriers, and once new customers experience JetBlue's "upscale discount" service -- complete with leather seats, DirecTV
I remember this past month, when temperatures reached 100 degrees in my hometown of Minneapolis and the neighbor kids were offering lemonade for $0.25 a cup. I was most grateful for the chance to get some relief from the heat, but because I knew that they weren't making much money (well, they probably were . but their parents weren't) and was so impressed with their service, I vowed to patronize their stand in the future, even if temperatures cooled and the price increased.
I suspect many JetBlue customers traveling to Houston and other destinations will feel much the same way -- they will be grateful for the temporary relief from the higher airline prices this summer, and impressed with JetBlue's service.
Carried away by JetBlue Foolishness? Check out these articles:
More from The Motley Fool
JetBlue Delays Decision on the Future of Its Embraer E190 Fleet
For the past year, JetBlue Airways has been studying the possibility of replacing its Embraer E190 jets on an accelerated timeline. However, it has now indefinitely postponed making a final decision.
2 More Airlines Just Raised Their Revenue Guidance
American Airlines and JetBlue Airways just offered more evidence that the revenue environment has improved dramatically for airlines over the past few months.
Here's My Top Stock to Buy for 2018
This Fool's top stock pick for 2018 is well positioned to deliver double-digit EPS growth for years to come, but it trades for just 12 times earnings.