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Fuel price a challenge for low-cost JetBlue

Published: 
Thursday, February 27, 2014
Jeffrey Goodell

Competition has heated up in the Caribbean airline industry by New York-based airline JetBlue landing in Port-of-Spain. Jeffrey Goodell, JetBlue’s vice-president of government affairs, said despite the challenge of high fuel prices facing airlines globally, the airline is well poised for growth. He said the airline’s growth strategy is based on profitability on a route by route basis. In other words, if a route is unprofitable, it’s likely to be dropped.

 

 

“For the industy as a whole, fuel is always a challenge. Fuel is our biggest cost and so we are always trying to manage it,” he said. Goodell spoke to reporters at a news conference after the inaugural flight from JFK airport in New York to Piarco on Monday, which was held at the VIP lounge, Piarco. He said T&T is a possibility to gain access to the Latin America market.

 

“It’s a critical piece of the puzzle for us. Our southernmost destination is Lima. We have a significant presence in many Caribbean locations, but I do think that geographically Port-of-Spain is in the right place for us where we go from here. I think we will see, but we welcome the opportunity to explore.”

 

Defining what he meant by Port-of-Spain being the “right place” for JetBlue, Goodell said: “I think the geography works. I think the success in the Latin American/Caribbean region - 30 per cent of our flying is now in this region - which is remarkable if you consider that our first flight was 14 years ago last week and it was from JFK to Ft Lauderdale.” And as Barbados and Bahamas continue to cope with declining economies, Goodell said that does not pose a challenge to the airline. 

 

 

“We continue to see great success, even in those markets.” Goodell said JetBlue planned to target the domestic as well as the diaspora customers. “We grow slowly to make sure it is sustainable. We are not an airline that go into destinations with a plan of ever leaving. We look to the community and T&T as well as the diaspora community in New York to help ensure that is true,” Goodell said.

 

With only one flight completed, the airline has embarked on a corporate social responsibility project. According to Goodell, the project involves handing out books to needy children. The first school targeted is the Success RC Primary School, Laventille.

 

 

Airports Authority of T&T
Jason Julien, chairman of Airports Authority of T&T (AATT), said the authority welcomed JetBlue to T&T since it represented an increase of visitors to T&T’s shores. “We can take more capapcity in terms of flights and schedules. It’s a co-ordinated effort.” Julien said JetBlue “has won the award for number one carrier for the last nine years in a row and it is one of the airlines which received the award for number one low cost airline.”

 

He also said it is a true testament of what T&T could offer and more so, what Piarco can offer in context of the calibre of airline.

 

 

Caribbean Airlines Ltd (CAL)
Clint Williams, CAL’s corporate communications manager, said CAL has been competing with JetBlue in Jamaica, so it’s not new for the airline to compete with JetBlue in the T&T market. “They are not unknown to us. To a lot of people in T&T, it’s the first time they are meeting them, but we know them.” Williams said. He said unless there is competition in a market, no one knows the complexities involved. He said CAL knows its market and enjoys  market leadership here.

 

Williams said CAL’s customer base is loyal to the brand and usually books, thereby capitalising on cheaper fares. He said within the last year, flights were added to CAL’s schedule and the airline is reaping the benefits. “We know our value package is an overall better value and that’s what we intend to stay with. They have timed it (entry into the T&T market) looking for when there is a market rush for anyone who waited a little too late and didn’t get their booking.”

 

Regarding demand during the Carnival season, Williams said: “Our Caribbean people start booking people when they see the costumes. Nobody takes a chance having a costume and, as they say, if you don’t have a ticket, you don’t have a chance. Our people book early. A lot of the early fares go quite quickly. People who book last minute, many of them will upgrade to business class.”

 

Williams said the earlier bookings come in allow the airline to plan and include more flights. Commenting on CAL’s finances, Williams said: “As you know the airline industry - it’s difficult when you talk about profits. What we are doing is that we are trying to maximise our revenue and we are under very strict cost-cutting management. What we have done is address any areas of waste or inefficiency. Instead of some airlines looking to give you a cheap price, so they cut out the meals, they cut out everything.”

 

Asked about brand loyalty now that JetBlue is in the market, Williams said brand loyalty has to be earned.

 

 

Tourism Minister Chandresh Sharma
Sharma attended the news conference at Piarco following the inaugural flight. “T&T remains the most attractive country in this part of the world and it has money to pay for its flights. What has to happen for this Carnival, we have visitors from 167 countries and every single hotel room has been sold out. It means we are becoming more and more attractive,” Sharma said. Sharma said T&T received 434,000 visitors in 2012.