JetBlue to Face Tight Competition by Southwest in Long Beach
Major player of domestic airline in USA, Southwest Airlines announced plans to start flying to Airport Long Beach, in southern California. This will give it a presence in the five commercial airports in the Los Angeles area. It also means that Southwest challenge the dominance of long duration of JetBlue Airways in the Long Beach Airport.
On the basis of a noise ordinance 1995, commercial airlines are limited to 41 daily departures to the airport in Long Beach, excluding small commuter aircraft. In 2001, JetBlue saw an opportunity to make Long Beach a mini-hub, as most of these slots were not used.
As we began to expand in Long Beach, JetBlue artfully made with the 27 remaining slots of commercial airlines. Had to return briefly some of those slots, but since JetBlue has amassed 32 of the 41 slots available for large reactors. The remaining slots are distributed among several other airlines.
However, last year, officials announced that the Long Beach airport slots add nine commercial airlines, as the change in the industry again, the quietest aircraft meant that the airport was not using all their "noise budget . " This was the first time in more than a decade that a large block of such slots became available - creating an opportunity for Southwest.
Given the strategy of Southwest region covering short-haul flights, which is not so surprising that it sees an opportunity in the Long Beach Airport. Southwest applies to all nine slots, but only receive four, based on the preliminary allocation slot.
That obviously limits what you can do in Long Beach. Based on patterns Southwest services at other airports in the region, the most likely options are flights to the Bay Area or Las Vegas. No matter what Southwest, the result is likely JetBlue competition in one or more of its routes from Long Beach. JetBlue currently flies three times a day from Long Beach to San Francisco, Oakland and Las Vegas.
Luckily for JetBlue, these routes represent a very small proportion of their income. On the other hand, Long Beach has been the weakest market for some time JetBlue and new competition probably worse. The real threat is that Southwest will look to continue growing in Long Beach. That will be difficult because of the limitations of slot, but Southwest might try to grab all the slots that other airlines are willing to sell or trade, while the city could eventually be forced to raise caps flying again as jets become quieter. Southwest is unlikely to bother entering the market unless they plan to go beyond four daily flights.
Southwest's decision to start flying from Long Beach Airport therefore represents a major challenge for JetBlue could become a real threat over time. This could force JetBlue to make some tough decisions about how you want to compete in the metropolitan area of Los Angeles and Long Beach Airport in particular.
