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JetBlue launches premium brand called Mint

3:10 PM, Sep 30, 2013   |    comments
JetBlue's lie-flat seat. (Photo: PR NEWSWIRE)
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JetBlue, the single-class carrier whose brand was built partly on the idea that it treats all its passengers equally, will launch a new premium class next summer.

Available only on flights between New York and San Francisco and New York and Los Angeles, the new premium section, dubbed "Mint," will feature lie-flat seats, its own tapas-style menu, and customized amenity kits. The first flight with the new premium section will take off from New York's JFK to Los Angeles International Airport on June 15, 2014.

JetBlue's new premium class, to be officially unveiled today, is the latest volley in the high-stakes battle among U.S. carriers for premium fliers who pay the highest fares for a more luxurious ride or to fly at the last minute, particularly from New York to Los Angeles and New York to San Francisco.

"It's almost like a nuclear arms race on these two routes,'' says Jami Counter, senior director of SeatGuru, a website that offers information and reviews of airline seats, services and amenities. "In the last year, one carrier keeps outdoing the other carrier.''

Though JetBlue will officially announce the new premium offering's prices and perks today, it hinted of the changes to come last month, when it announced its new lie-flat seats. Travel-industry watchers say it's smart for the 14-year-old carrier to try to capture a larger share of the fliers who pay the highest fares to fly coast to coast, but some warn that offering a specialized experience to passengers in the front of the plane could undermine JetBlue's populist image.

"This is seismic because now, admittedly only on the transcontinental routes ... JetBlue is saying some passengers are going to be more important than others,'' says Henry Harteveldt, a travel analyst with Hudson Crossing. "This move is not one that comes with guaranteed success, nor is it one that comes without risk to the brand. ... There is a chance that some customers may look at this and say JetBlue is selling out.''

But JetBlue CEO Dave Barger said that the move was necessary to better compete with others in the industry, and emphasized that with coach also getting an upgrade, no passenger is being left behind.

"The reason we're doing this is our travelers were migrating over to American, over to United, over to Delta, over to Virgin America - (airlines) who had a premium cabin experience,'' Barger said. But "as we put forward a premium experience, it can't be at the expense of our current customer. ... And I think that's what's going to be really different from what we're seeing across the rest of the industry.''

JetBlue's new premium class will allow it to more aggressively pursue premium paying fliers, who on some airlines account for roughly 10% of the passengers while generating 30% of the revenue.

JetBlue says it is particularly keying in on travelers who might fly their airline from Boston to Orlando, but prefer to travel from New York to LA or San Francisco on a larger network carrier such as Delta, United or American where they can enjoy the comforts of business or first class.

"The most important customer we want are the customers who we've lost to the other airlines, who love JetBlue but they just won't fly us to these markets,'' says Martin St. George, JetBlue's senior vice president marketing and commercial strategy. "We knew this was a hole in our portfolio.''

JetBlue also sees its new premium class having particular appeal to smaller companies that may not have a global corporate deal with a big network carrier, as well as those passengers who fly often but don't rank high enough in a big airline's loyalty program to get the best perks.

"We're aiming at that first-level elite customer on American or Delta ... who never gets to upgrade,'' St. George says. "They give a lot of revenue to an airline, but they don't really get a lot of benefit for it.''

THE PREMIUM ROUTES

The routes between New York and Los Angeles and New York and San Francisco are especially lucrative, industry experts say. On those flights, unlike some other domestic markets, most of the fliers filling the premium cabins have actually paid top dollar to be there rather than grabbing those seats through loyalty program upgrades.

The competition for those passengers has gotten fierce.

American is planning to become the only U.S. airline that offers both first- and business-class cabins on transcontinental flights. The new three-cabin jets, which will feature lie-flat seats in both premium sections, will begin flying between New York's JFK and Los Angeles International on Jan. 7, and between JFK and San Francisco on March 6, 2014.

"Our New York and Los Angeles hubs are very important to American's network strategy,'' says Rob Friedman, American's vice president, marketing. "And we know many of our high-value customers are flying into and out of these important business markets on a daily basis.''

Meanwhile, United is upgrading its premium service fleet that flies between New York and Los Angeles and New York and San Francisco, outfitting the premium cabins with lie-flat seats, faster in-flight Wi-Fi, and on-demand entertainment at each seat. The updates are expected to be completed by the end of this year.

Virgin America, a smaller carrier that like JetBlue has become known for quality service at a lower price, has had a first-class cabin since it began flying in August 2007. It has VIP concierges at JFK and LAX and opened its first airport lounge at LAX last year, particularly to appeal to business travelers, says spokesman Madhu Unnikrishnan.

"They're enormously important routes on which we're able to realize significant profits," Unnikrishnan says. Additionally, the airline started flying from Newark to San Francisco and Los Angeles in April. "That has almost out of the gate become a very important route for us because it increases our presence in the extraordinarily important New York market.''

JetBlue has likely taken note of all its competitors' moves, Harteveldt says.

It has "seen Virgin America be successful on its transcontinental routes from New York to California. They have seen investment in product by other network airlines such as United, American and Delta, and Jet Blue has been left behind,'' Harteveldt says. "Now they are playing catch-up.''

Still, he thinks JetBlue can be a contender, particularly if it sticks to its model and gives a higher-end offering for a lower fare than its peers. "I wouldn't be surprised ... to see JetBlue steal market share from some of its network airline competitors,'' he says.

JetBlue says that it plans to do for premium flying what it did for a trip in coach, offering high quality for less money.

"The goal here is not to sort of extract that last dollar and gouge people,'' St. George says. "If you're thinking about (what) are we doing to stay true to JetBlue, not going in there and charging like everybody else is also an ultimate part of being true to what we stand for.''

Since it was founded in 1999, JetBlue has stood apart from many of its peers, becoming the first U.S. carrier to offer live TV and continuing to allow passengers to check their first bag for free and have unlimited snacks at a time when the airline industry is reaping billions charging for checked luggage, food and other services.

But JetBlue has also begun to offer some upgrades for a price, such as its "even more space'' seats, which give passengers extra legroom along with the ability to board early.

"We already have multiple experiences that customers can buy on JetBlue,'' St. George says. "We sort of look at the Mint cabin as another example of that ... another experience you can buy, but it's still JetBlue.''

A 'SUITE' WITH A DOOR

The new premium class will have lie-flat beds that JetBlue says are the longest and widest being flown domestically, as well as the only "suites," with a door that can be shut for privacy. There are 15-inch flatscreens, along with buttons that let flight attendants know if a passenger wants to be awakened for a meal.

And fliers can have a drink before takeoff, and a cocktail and an hors d'oeuvre once the jet is in the air.

Passengers will also be able to choose three of five tapas-style plates. And there will be amenity boxes - one selection for men, another for women - provided by Birchbox featuring not only items that can be used on board, but samples of other products such as shampoo or lotion. The kits' offerings will change regularly.

Unlike the premium cabins on many other airlines, JetBlue says that passengers won't be able to grab a perch in the Mint section through a frequent-flier upgrade. "It's a product that anyone can buy,'' St. George says.

PERKS IN COACH, TOO

But it's not just the front of the plane getting new perks. So is the traditional coach cabin.

While JetBlue's coach cabin already has more legroom than any other domestic airline's, starting next year there will be new softer, even roomier seats. Eventually every flight between New York and Los Angeles or San Francisco will have a self-service snack bar where passengers can get soft drinks and bites to eat throughout their trip.

Starting on its new Airbus A321 jets, which will feature the new premium section, there will be power outlets at every seat along with an increase from 36 to 100 channels of live TV. And JetBlue will introduce Wi-Fi, a particularly important perk for some premium travelers, with the first 30 A320 jets to get the new high-speed technology offering in-flight Wi-Fi for free.

"We wanted to make sure everyone on the airplane got an upgrade,'' St. George said. ""We wanted to make sure our core customer didn't think we were walking away from them.''

By the fourth quarter of next year, all seven daily round-trip flights between JFK and LAX will feature the new premium section along with the upgraded amenities and offerings in coach. Mint will also debut on flights between JFK and San Francisco before the end of next year, with all five daily flights featuring the service by early 2015.

WHAT WILL FLIERS THINK
Counter of SeatGuru doubts that passengers will feel put off by JetBlue's new premium perks.

"It's certainly not a revolution,'' he says. "It's only limited to these routes. ... I think they're very aware of what they stand for and are very true to their brand, so in no way does this in my mind take way from the experience in the back'' of the plane.

Barger however doesn't rule out the premium section coming on board other routes in the future.

"I think it's quite likely it could happen,'' he says, "but it's not going to happen overnight. We're focused on New York to Los Angeles, New York to San Francisco. ... We've got to deliver this and absolutely nail it coming out of the box.''

Alex Wilcox, a founder of JetBlue who is now CEO of the private jet service JetSuite, says his one-time airline should tread carefully.

"I am pleased that JetBlue is innovating,'' he says, adding that JetBlue's low-cost status has been challenged by the ultra-low-cost carrier Spirit, while Virgin is vying for the mantle of hippest airline. "The risk is the new cabin will make those in the back feel second class, which would be anathema to the JetBlue experience."

But St. George says the airline knows that being egalitarian is one of its signatures, and it's going to hold onto it.

"Even if you just buy a $99 ticket to Florida,'' St. George says, "and sit in the last row of the airplane you will have the best experience of any customer flying in economy cabin on any airline.''


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