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Fuel costs prompt JetBlue to lower its sights
Saturday, March 08, 2008

High fuel prices are forcing at least one low-cost carrier to scale back expansion plans, including the potential for more service at Pittsburgh International Airport.

Noreen Courtney-Wilds, director of sales for JetBlue Airways, said yesterday during a Pittsburgh Airport Area Chamber of Commerce breakfast that the airline has been re-evaluating its growth plans in light of high fuel costs.

As a result, "I don't know that you'll see a lot more growth" in new nonstop service or more frequency in existing service from Pittsburgh International by her airline, she said.

JetBlue currently has three daily nonstop flights to New York and two to Boston from Pittsburgh. The airline cut the New York service from four flights a day to three in November because of rising oil prices, she said.

Ms. Courtney-Wilds said the carrier had been planning to grow 10 to 12 percent overall but has since scaled that back to 6 to 8 percent as fuel costs have increased.

She said the only way to address the issue is to reduce capacity.

"You can't just keep raising fares to cover costs because the demand drops," she said.

JetBlue started service in Pittsburgh in June 2006 with high hopes of penetrating the lucrative New York and Boston markets.

In the carrier's first year, the average fare to the two markets dropped from $205 to $89 and the number of people flying to the two cities from Pittsburgh almost doubled, Ms. Courtney-Wilds said.

While she said the airline is happy with the way it has been able to stimulate the market, it is looking to do better in attracting customers, particularly business travelers.

She acknowledged that part of the problem in securing more business travel is the lack of frequency. She also said JetBlue is still "ramping up" in Pittsburgh, a process that can take as long as three years.

During her presentation yesterday, Ms. Courtney-Wilds asked business people in attendance to make suggestions for ways JetBlue can better accommodate their needs.

Michael Langley, chief executive officer of the Allegheny Conference on Community Development, and Bradley D. Penrod, executive director of the Allegheny County Airport Authority, also urged the crowd to support low-cost carriers such as JetBlue and AirTran, which also made a presentation, or risk losing the service.

"We must support these carriers, all these carriers," Mr. Langley said. "If we lose a low-cost carrier, the routes we lose will go right back up in price."

AirTran Airways was the first low-cost carrier in Pittsburgh eight years ago. After a rough start, its local operations have stabilized with nonstop service to its Atlanta hub, Orlando, Tampa, Fort Myers, and Fort Lauderdale.

"We're very pleased with our Pittsburgh service. We know where you want to fly," said Tad Hutcheson, AirTran vice president of marketing and sales.

Because of low nonfuel related costs, AirTran should be "well-positioned" to weather the current spike in oil prices, he said, adding "We believe there are significant growth opportunities, even for Pittsburgh."

At the same time, Mr. Langley remains hopeful that the airport and the conference will be able to entice a carrier to offer nonstop service to Europe. Local officials have been in ongoing discussions with Northwest Airlines and KLM Royal Dutch Airlines about the potential for such service.

"We are still in serious consideration," he said. He expects some announcement on expansion plans by the airlines later this year.

Mr. Langley does not expect merger talks between Northwest and Delta Air Lines to affect those plans.

Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
First published on March 8, 2008 at 12:00 am
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