Domestic Discounter JetBlue to JFK Rescue

by Dalia Fahmy

September 28, 2003 -- After two years of dwindling international traffic and several more of a soiled reputation, John F. Kennedy International Airport has struck gold in its own backyard. Thanks to discount airline JetBlue, New York's largest airport has seen its passenger traffic soar even as other airports struggle to keep customers.

For the first time in almost two decades, Kennedy has seen more national than international passengers, with travelers flocking to JetBlue's low fares, leather seats and DirecTV.

"It's certainly fueling a bit of a renaissance," said Kevin Neels, aviation analyst at Charles River Associates.

"JetBlue has done something which people didn't think could be done," he said, namely to convince travelers to go the extra eight miles past La Guardia airport to JFK to catch a domestic flight.

Marty Pichinson, a frequent business traveler and technology consultant at Sherwood Partners, said he flies JetBlue as often as he can to save money.

"I used to go to Newark, but now I go to JFK," he noted. "I'd rather buy a new suit or a fountain pen than give an airline money for horrible food."

Pichinson is one of 2 million JetBlue customers who flew through Kennedy Airport in the past year, making up the bulk of the 3 million new passengers who helped lift traffic at the airport by 10 percent to 30.7 million.

More strikingly, the number of domestic travelers jumped 17 percent in the past year to 15.6 million, while international traffic rose just 3 percent to 15 million, a clear indication of the impact JetBlue has made.

When the upstart picked Kennedy as its home base in February 2000, the airport's main problem was wild swings in traffic caused by its reliance on international business.

"Because it had a tremendous amount of international flights, the departures and arrivals clumped around a particular period of time, usually around the late afternoon or early evening," explained Kevin Carney, U.S. airports analyst at Moody's.

As a result, the airport operated below capacity for large chunks of the day, not making as much money as it could.

By shifting the traffic domestically, JetBlue snapped up the extra daytime capacity, and now helps JFK maintain a steadier flow of income.

Kennedy's success story contrasts starkly with other airports in the region.

Air traffic in the northeastern U.S. fell about 10 percent from its 2001 peak, depressed by the lingering effects of 9/11, the war in Iraq, fears of airborne virus SARS and a weak economy.

Still, the Port Authority of New York and New Jersey, which operates Kennedy Airport, continues to invest about $300 million annually in renovations.

By 2006, it expects to complete a new terminal to accommodate JetBlue's growing needs, which will be attached to the landmark TWA terminal designed by Eero Saarinen in the 1950s and which currently stands empty. Frequent travelers have long complained about the lack of comfort or diversions there, repeatedly earning Kennedy a spot among the worst ranked airports in the world by magazines such as Business Traveler.

"We're human beings. We like visual and mental stimulation, and lots of it," Pichinson said, complaining about shopping and dining choices at Kennedy Airport. "Sure, it's cleaning up, but it's still a dreary place."