Logan Airport Flights and Airlines Discussion

[BosDevelop]

There's no such thing as a slam dunk in the airline business these days and if there was, it's not going to be a route like Worcester to Orlando.

I may be wrong but I don't see a problem with getting 175-200 people a day to fly from Worcester to Orlando if the fares are reasonable. We are not talking large aircraft here. 100 passenger capacity I believe.

 

[datadyne007]

I may be wrong but I don't see a problem with getting 175-200 people a day to fly from Worcester to Orlando if the fares are reasonable. We are not talking large aircraft here. 100 passenger capacity I believe.

jetBlue uses the E-190 (in addition to the A320), which seats 100 in jetBlue's configuration.

 

[kmp1284]

I may be wrong but I don't see a problem with getting 175-200 people a day to fly from Worcester to Orlando if the fares are reasonable. We are not talking large aircraft here. 100 passenger capacity I believe.

First off, not to state the obvious but if it was destined to be a slam dunk, Massport wouldn't have had to twist Jetblue's arm and kick in about $400,000 in freebies to get them to start service. That said, there's more to running a profitable airline than simply full planes with 'reasonable' fares. Typically that's a good recipe to losing money in the airline business. I would estimate a first year average load factor of 55%, maybe approaching 65% in the second year, after which service will probably cease. I'm sure there will be plenty of days where load factors are up around 100% but there's also going to be the weekdays in January and November when these flights are running at 30%, or less. Also, the demographic on nearly any Florida route, except Miami is straight leisure - budget conscious travelers who book flights many months in advance on ass cheap fares - the $79 each way type deals. Airlines don't make money on that, often times they don't break even. By Jetblue's own admission, they are not profitable in Boston. Why on earth would they be profitable in Worcester?

 

[Ron Newman]

If JetBlue is not profitable in Boston, why have they expanded so much at Logan, to the point of taking over an entire terminal?

 

[kmp1284]

If JetBlue is not profitable in Boston, why have they expanded so much at Logan, to the point of taking over an entire terminal?

I don't know but frankly, I think one day the JetBlue bubble is going to burst. There's only so long you can rope the kettles along on leather seats, blue chips and TV.

 

[Equilibria]

I don't know but frankly, I think one day the JetBlue bubble is going to burst. There's only so long you can rope the kettles along on leather seats, blue chips and TV.

Why's that? The airline is profitable overall. If they ultimately run into trouble, it will be because a sales model based on sales and discount pricing isn't sustainable, but what JetBlue and Southwest before it have figured out is that low fares and low cost operations don't have to be tied to a "cheap" customer experience. Southwest has traded for a long time on simply having friendly staff, and JetBlue is making money on their LiveTV by owning the company and providing the service to other airlines, earning revenue and improving their economies of scale. The "Low Cost" part of "Low Cost Carrier" is really about business efficiency measures like having customer service staff work from home, operating new, homogeneous fleets, and using non-union labor.

I really think most people care about comfort and atmosphere when flying, and they don't cost as much as you'd think. Next to fuel, maintenance, debt service on the fleet, landing fees, etc. the $30 hundred-pack of chips from Costco isn't a big expense...

JetBlue will someday need a Midwest hub to keep growing (Austin would be a good choice), and I think they'll end up buying Virgin America at some point to increase their West Coast presence. They won't go out of business by being nicer to people than their competition.

 

[mass88]

According to JetBlue, they plan for 2013 to be a profitable year for Boston and beyond.

From what I have heard, the Boston operation has been a solid one and not one where they're bleeding money.

But as mentioned, you can have oversold planes every day, if the yields are not good enough, the flights are going to lose money. There are only a few reasons why airlines fly routes that lose money. An airline is trying to force out a new competitor so they throw extra frequencies and cut fares. Or an airline will fly a route where the revenue from the passengers would mean the flight is at a loss, but they more than make up for it with the cargo carried.

 

[Arlington]

I don't know but frankly, I think one day the JetBlue bubble is going to burst. There's only so long you can rope the kettles along on leather seats, blue chips and TV.

I find the interesting thing to be this line about being at 100 flights/day today, but planning to grow to 150 (from the press release). This was an intention they first announced in 2011.

Serving the most destinations in the history of Boston's Logan, JetBlue offers more than 100 daily flights to 49 nonstop destinations throughout the U.S., Caribbean and Latin America, and plans to increase service to 150 flights over the next two years.

 

[palindrome]

To be honest, I don't relatively care about the price. I book jetblue because i love everything they offer. It is at the point where I don't bother shopping around for the best prices. I go to jetblue.com and book.

 

[Ron Newman]

JetBlue will someday need a Midwest hub to keep growing (Austin would be a good choice)

huh?

 

[BosDevelop]

First off, not to state the obvious but if it was destined to be a slam dunk, Massport wouldn't have had to twist Jetblue's arm and kick in about $400,000 in freebies to get them to start service. That said, there's more to running a profitable airline than simply full planes with 'reasonable' fares. Typically that's a good recipe to losing money in the airline business. I would estimate a first year average load factor of 55%, maybe approaching 65% in the second year, after which service will probably cease. I'm sure there will be plenty of days where load factors are up around 100% but there's also going to be the weekdays in January and November when these flights are running at 30%, or less. Also, the demographic on nearly any Florida route, except Miami is straight leisure - budget conscious travelers who book flights many months in advance on ass cheap fares - the $79 each way type deals. Airlines don't make money on that, often times they don't break even. By Jetblue's own admission, they are not profitable in Boston. Why on earth would they be profitable in Worcester?

I strongly disagree that Worcester-->Orlando will see 30% or less load factor. I think you are vastly underestimating New Englanders take their kids to the Orlando theme parks all year round including the months you cited, November and January and definitely during the week. I have been down there during these times and the number of folks from New England is astounding. People do not hesitate to take their kids out of school for a few days for a Disney trip.

 

[Arlington]

I strongly disagree that Worcester-->Orlando will see 30% or less load factor. I think you are vastly underestimating New Englanders take their kids to the Orlando theme parks all year round including the months you cited, November and January and definitely during the week. I have been down there during these times and the number of folks from New England is astounding. People do not hesitate to take their kids out of school for a few days for a Disney trip.

I'm mostly with kmp1284 on this one. Yes, New Englanders go to Disney, but how many will also go via a limited schedule in Worcester? Allegiant and DirectAir have both tried to tap similar demand and retreated.

BOS-MCO/TPA in the dead months at least have just a hint of business/convention/company meeting that's helped by BOS's business heft, frequent fliers burning off miles, and rich city folks doing the two-home thing.

OTOH, it is a continuing frustration for anyone on Worcester County when PVD-MCO works all year, and PVD and BDL is a similarly-sized market to ORH, and yet somehow it is always ORH that get written off and the other two get service.

 

[kmp1284]

A lot of people in the more affluent eastern suburbs of Worcester, at least those with convenient access to the Pike, will continue to utilize Logan on account of the frequency and diversity of options and the idea that for many of them their lives are more Boston-centric than they are Worcester-centric.

 

[Equilibria]

huh?

In aviation conversations, "Midwest" is usually taken to mean anything between the East and West coasts. Houston is a "Midwest" hub for United as much as Chicago is. I realize that no one living in Austin would ever consider themselves a "midwesterner."

LOTS OF EDITS TO FOLLOW:

The real problem here: Worcester just isn't that far from Logan. With the TWT open, you can probably (though I've never tried) do the trip in 45 minutes to an hour. Think about driving times to JFK from Long Island, or SFO from, well, anywhere if the traffic is bad. Heck, I lived 10 miles from O'Hare in Chicago and it still took me 40 minutes or so to get there in good traffic.

Worcester is basically an outer suburb of Boston at this point, and the travel time to the airport is one demonstration of that. Even if Massport and MassDOT invested in a functional access road between the Airport and the Turnpike, that still probably wouldn't be enough to offset lower fares and greater flexibility at Logan.

or at least Airline Market Midwest = Eastern Time Zone + Central Time Zone

Are SLC, Denver and Phoenix considered West Coast?

Actually, yes. Less so PHX, but think about it. Delta has no other West Coast hub than SLC at this point (they sort of had one at SEA once, I think), and US Airways has no hub in Pacific Time either. Denver is typically more "Midwest," but that's because United is so big in California.

 

[kmp1284]

OTOH, it is a continuing frustration for anyone on Worcester County when PVD-MCO works all year, and PVD and BDL is a similarly-sized market to ORH, and yet somehow it is always ORH that get written off and the other two get service.

Hartford and Providence still have a few things going for them that attract visitors to the two cities while also having the economies to produce a large enough population with the means to travel with any regularity.

 

[Ron Newman]

In aviation conversations, "Midwest" is usually taken to mean anything between the East and West coasts. Houston is a "Midwest" hub for United as much as Chicago is. I realize that no one living in Austin would ever consider themselves a "midwesterner."

And nobody in the real Midwest (such as me, from Ohio) would ever consider Texas to be part of our region. I had never heard this strange usage of the word before.

 

[Hutchison]

I do the drive from Boston to Worcester every day. On a good day from Worcester to Logan would be an hour, but anytime near rush hour and you're looking at 90-120 minutes.

 

[omaja]

And nobody in the real Midwest (such as me, from Ohio) would ever consider Texas to be part of our region. I had never heard this strange usage of the word before.

Never heard of this either, including within aviation. Texas is most often referred to as South or (less common) South Central.

 

[kmp1284]

A few minor news items. In response to JetBlue's announcement, Southwest will launch BOS-HOU and British Airways will keep its fourth daily flight through the winter schedule.

 

[mass88]

Looks like Boston-Houston Hobby will be hitting 2 daily come September for Southwest. Will be interesting to see the effects this has on United, who I believe are upping the Boston-Houston Bush frequencies. United is upping Boston-Houston to 6 daily flights for September, October, November and December.