While JetBlue Airways (NASDAQ:JBLU) doesn't operate as many flights in Fort Lauderdale as it does in its top two focus cities of New York and Boston, it has been rapidly growing its presence in South Florida.
This week, JetBlue added three more destinations to its Fort Lauderdale route network. These new routes will help JetBlue solidify its leading position at the airport prior to an expected growth push by its larger rival, Southwest Airlines (NYSE:LUV).
JetBlue starts some new routes
On Thursday, JetBlue started new flights from Fort Lauderdale to Charleston, South Carolina; Philadelphia, Pennsylvania; and Providenciales, Turks and Caicos Islands. The Philadelphia flights will operate twice daily, while the other two routes will be served once daily.
These new routes -- plus a new daily flight to Albany, New York, that starts next month -- will bring JetBlue up to 95 peak-day departures from Fort Lauderdale to more than 40 destinations. This is part of a multiyear effort to roughly double its presence in Fort Lauderdale from 50 to 100 daily flights by 2017.
JetBlue is on pace to hit that milestone a year early. The airline has already announced that it will resume seasonal flights from Syracuse, New York, to Fort Lauderdale in January. It will also start new routes to Quito, Ecuador; Bridgetown, Barbados; and Nashville, Tennessee, in the first half of 2016.
Indeed, based on the success of JetBlue's growth in Fort Lauderdale so far, the market's ultimate potential could be at least 125 daily departures, according to Dave Clark, JetBlue's vice president of network planning.
Southwest Airlines is coming
JetBlue's biggest competition in Fort Lauderdale is Southwest Airlines. Currently, Southwest operates up to 78 daily departures to 28 cities from Fort Lauderdale. Thus, while JetBlue has opened up a market share lead, Southwest is well within striking distance.
The main thing holding Southwest back is the lack of international customs facilities in its Fort Lauderdale terminal. That's going to change in a couple of years, though. Southwest is currently overseeing the construction of a terminal expansion that will add five international gates.
As soon as the new gates and customs facilities are ready, Southwest Airlines plans to begin its international growth in Fort Lauderdale. Ultimately, it could operate at least 25 daily international departures to Latin America and the Caribbean at the airport. There's a good chance that this would also lead to additional domestic flights to generate connecting traffic.
Grabbing the first-mover advantage
With its new route to Providenciales, JetBlue now serves 15 international destinations from Fort Lauderdale. Two of the routes scheduled to start in early 2016 are international as well. At the moment, JetBlue is protected from competition from Southwest Airlines on these routes due to the latter's lack of access to international gates.
As long as the market can support its growth, it is wise for JetBlue to build up a big position in Fort Lauderdale as fast as possible. That will raise brand awareness in the region. If customers try JetBlue and come to value its amenities like extra legroom and TVs at every seat, this also might encourage them to be loyal to the brand (as long as its fares remain competitive). Finally, a larger footprint will allow JetBlue to capture more connecting traffic.
Southwest is a formidable competitor and there's no way to stop it from expanding in Fort Lauderdale if it is determined to do so. All that JetBlue can do is try to establish itself as the airline of choice in Fort Lauderdale before Southwest can begin its assault.
Adam Levine-Weinberg is long January 2017 $17 calls on JetBlue Airways. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.