Over its 15-year existence, JetBlue Airways (NASDAQ:JBLU) has thrived by challenging the legacy carriers with lower ticket prices and better service. This approach has served it well, as seen most recently in the strong customer reception to its "Mint" premium service from New York to Los Angeles and San Francisco.
However, JetBlue is now taking on an even more formidable rival: Southwest Airlines (NYSE:LUV). Like JetBlue, Southwest is known for having good customer service and relatively low fares. But since Southwest now carries more domestic passengers than any other U.S. airline, it is a natural target for other growth-oriented airlines like JetBlue.
Encroaching on Southwest's turf
On Tuesday, JetBlue made its second new route announcement of the week, advertising the launch of new nonstop flights from Philadelphia to Fort Lauderdale, and from Baltimore-Washington International Airport (BWI) to Orlando. Both routes will start in November -- as will a third, previously announced route from BWI to Fort Lauderdale.
All three routes are served by Southwest Airlines (though Southwest only flies nonstop between Philadelphia and Fort Lauderdale seasonally). The routes to Orlando and Fort Lauderdale are two of the five busiest airline routes from BWI -- and JetBlue already serves Boston, another one of the top five.
Furthermore, Southwest had 71% market share at BWI in 2014. It currently flies 9-10 daily nonstops each to Orlando and Fort Lauderdale. It has no nonstop competition to Orlando, and the only other airline flying nonstop to Fort Lauderdale today is barebones discounter Spirit Airlines, with two daily flights.
JetBlue is starting small, with two daily flights from BWI to Fort Lauderdale and one from BWI to Orlando -- plus two daily flights from Philadelphia to Fort Lauderdale, where American Airlines is the biggest rival. However, if it attracts a loyal following, JetBlue could add more flights over time.
Highlighting JetBlue's unique features
When promoting new routes, JetBlue routinely describes various amenities it offers, such as free live TV and satellite radio, generous leg room, and free Wi-Fi.
Still, it was notable that JetBlue took some direct shots at Southwest Airlines in its recent new route announcement. JetBlue SVP Scott Laurence stated, "No more cattle car boarding. Customers will love stepping on our flights knowing they have an assigned seat with the most legroom in coach..."
This "cattle car boarding" isn't an issue with any of the legacy carriers that have been JetBlue's main rivals to date. Instead, open seating is a unique feature of Southwest Airlines. While some Southwest fans really like the open seating policy, many people prefer to pick a seat when they book the flight.
Leg room is another way JetBlue differentiates itself from Southwest -- as well as every other airline in the U.S. Thus, it's not surprising that JetBlue also advertised its superior leg room in its announcement.
Giving travelers more options
Up until now, JetBlue and Southwest have been the only two airlines offering free checked bags for every passenger. But in the very near future, JetBlue plans to start charging extra for checked luggage for customers buying the cheapest tickets. That will leave Southwest Airlines as the only airline where "bags fly free."
Despite this upcoming change, JetBlue's recent new route announcement shows it still wants to be seen as a "customer-friendly" airline, even when compared to Southwest.
Southwest may be unique in not charging bag fees or change fees, but JetBlue will emphasize its own unique aspects, like extra leg room and free high-speed Wi-Fi. In other words, travelers have more choices -- and that's a good thing.