The aviation industry has been in decline for many decades. This has resulted in labour disputes, a lack of customer satisfaction and a loss of orders for many airlines. A new concept of the low budget airline has started to revitalise the industry and provide a new model of low cost, high quality air travel. This paper examines the fortunes of one such airline ‘JetBlue Airways’. The paper provides an analysis of the Aviation Industry History, a critical appraisal of Jet Blue Airlines and a conclusion that considers the future of budget airlines and low cost air travel.
The aviation industry has been in decline for decades, this has resulted in labour disputes, a lack of customer satisfaction and a general decline in consumer bookings. In recent years we have seen the introduction of budget or low cost airlines in Europe i.e. Easy Jet and Ryan Air. The concept has equally been introduced in North America and this paper examines the fortunes of one such Company – JetBlue Airways.
In the United Kingdom the Civil Aviation Authority (CAA) stated that the emergence of low cost airlines has not impacted traffic growth. Equally there has not been an increase in air travel that was expected from offering this service. In the UK it has been estimated that 50% of all travellers go on short-haul routes and they now opt to use budget airlines “Dr Harry Bush, group director of economic regulation at the CAA, said: “No-frills airlines have enormously increased the range of fare, route, destination and departure choices available to the travelling public. However, they do not appear to have significantly altered overall traffic growth” (Starmer-Smith, 2006)
A number of the low cost airlines have been dubbed as “no frills airline” for the very reason that the services are stripped down to the bare minimum to save costs. Hence no food available, limited drinks that you have to purchase, no in-flight entertainment etc. This often is no problem in short-haul flying but you may not wish to consider this option for a long haul flight. Although airlines like Air Transat fly from Canada to Europe. JetBlue Airlines however offer a slightly better deal “On the other hand, a few LCCs offer you a rather posher experience than you’d get, at least in coach, on most traditional “legacy airlines”—think of the wide leather seats, ample legroom, and individual seatback screens featuring DirectTV aboard a JetBlue plane.” (nofrillsair.com, 2007).
2009 was viewed as the defining year for the development of the low cost air carrier. The table illustrated below illustrates the 2009 revenues appropriate to the list of the main low cost airlines. Of the 27 carriers listed the industry generated in excess of $1 billion of profits. Despite the economic down turn in the USA the low cost carriers have proved to be fairly resilient and look like weathering the economic storm. It has not been without its casualties though with the loss of airlines like Zoom, Oasis and ATA. “I think it’s got every reason to consider itself a mature sector,” says Conor McCarthy, managing director of Plane Consult” (Dunn, 2010).
Another big issue with budget or low cost airlines is just exactly where are they pruning costs. You would hate to think that they are cutting back on qualified engineering support staff or not providing adequate maintenance of the aircraft or indeed anything that presumably might put passenger safety at risk. There was a crash of a budget airline in Thailand in 2007 and this raised questions over the qualifications of pilots in South East Asia. People may want inexpensive and low cost travel but they will think carefully about the passenger safety record. Russia went through a bad spell of Aircraft accidents that were related to poor maintenance and a lack of investment in passenger safety.
A number of the quality name airlines have also tried to move into this space. One of the recent entrants being that of the UK operator Virgin. They established as base out of San Francisco in order to offer a number of short haul shuttle routes across the USA including that of Los Angeles, San Diego and Washington DC. They dovetailed these into hub airports that fed their transatlantic carrier services. Virgin has established a reputation for quality, reliability and good service in the air transportation industry.