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October 23, 2007

JetBlue Leaves Columbus and Nashville

Filed under: Airlines — Rick Seaney @ 2:25 pm

It’s been a big news week for JetBlue. The airline saw a profit in the third quarter, experiencing a top-line increase of 22%; they performed better than most analysts predicted; their capacity growth outlook is up to 11% - 13%; and they pulled out of Columbus and Nashville…

OK, so the last bit of news doesn’t seem to fit with the rest. JetBlue is making money and expanding, so why would they cut out of two markets that they have only provided service to for a year? As reported by Conde Nast Portfolio, Chief Executive Dave Barger released a statement regarding the decision:

“We are taking the difficult but necessary step to discontinue operations in these two markets…After more than 12 months of service and a detailed review of traffic and revenue trends in these two cities, we have decided to redeploy our assets.”

Rival low-cost carrier Skybus is headquartered in Columbus and has been effective in laying its claim to the market, so it doesn’t surprise me that JetBlue would move on. Also, while I see how it is a “difficult step” for JetBlue to discontinue service, if the carrier used a small fleet of small aircraft it could remove itself from both Columbus and Nashville with relative ease.

When an airline pulls out of a market, we usually jump to the conclusion that it is a sign of struggle and a harbinger of things to come. But in this case, it’s important to keep in mind that JetBlue is seeing both growth and profit, and this move could simply be a way to ensure that growth and profits continue.

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