JetBlue, one of the Caribbean’s longest-serving and largest-capacity airlines, posted bullish third quarter results last month despite challenging headwinds from the Latin American and Caribbean region, and said it is looking to grow its Caribbean presence heading into 2020.
Long-term growth
JetBlue expects capacity to increase between 4.5 per cent and 6.5 per cent in the last quarter of the year and, for 2019 as a whole, is looking at increased capacity between 6 and 7 per cent. Although its recent results this year showed the short-term impact of Hurricane Dorian, this was offset somewhat by a steady domestic market in the US.
“Our Latin and Caribbean franchise was impacted by unique events in a number of markets,” said Joanna Geraghty, JetBlue President and Chief Operating Officer. “We saw demand and competitive capacity challenges begin earlier this year but ramped significantly through the summer. We continue to be bullish on the region long-term.
“Customers will continue to travel to the Caribbean region for vacations. The leisure Caribbean markets continue to perform well for us. We’ve had a long history [of] operating in this region, and it’s a region where there are normal puts and takes. This year we’ve obviously seen a bit more pressure but, based on our experience, this is temporary in nature and it will move.”
Given its experience and history in the region, JetBlue remains sanguine about its challenges and believes that any negative impact from disruptors such as hurricanes can be absorbed by the stability of the market long-term.
The region remains an important part of the company’s plans and forecasts going forward, according to Geraghty: “The Caribbean is a great fit for our model. We are very committed to the region. It’s an area that produces outstanding margins and the returns that we see there more than offset the volatility.”
Branching out
JetBlue services destinations across the US, Latin America and the Caribbean, averaging more than 1,000 daily flights. The airline has doubled its seat capacity to the Caribbean in the last decade and the region now accounts for a third of its route network.
With 19 Caribbean destinations in its network, including Saint Lucia which is serviced by routes from New York and Boston, the airline is heavily invested in the region and set to increase that investment through its travel booking arm, JetBlue Travel Products, which helps guests book transportation, accommodation, tours and attractions in their destination. The travel products subsidiary is headquartered in Fort Lauderdale and includes the JetBlue Vacations brand and associated services such as travel insurance, cruises and car rentals.
Speaking at a recent Caribbean Tourism Organisation forum in Antigua, Head of Commercial for JetBlue Travel Products Mike Pezzicola said: “One thing we see is that as folks are planning to travel, when they book their travel vacation with us, and we help them plan it, their stay is longer and they are more likely to return, if not to the destination, then to another destination in the tropics.”
To assist the company in building out its travel products, JetBlue will strengthen its marketing collaborations with the region’s tourism stakeholders including government tourism boards and major private sector players.
JetBlue Executive Vice President & Chief Financial Officer Stephen J. Priest: “JetBlue Travel Products is a plan that we are preparing to optimize next year. The team has also identified some other travel-related products that will be rolling out into the 2020 period as well. So [we are] very excited.”
