Even though JetBlue Airways did not win the bidding for Alaska Airlines, the New York-based carrier is committing to growing on the West Coast, executives said this week.
"We did consider acquiring Virgin America as a way to more quickly build a larger West Coast presence," JetBlue CEO Robin Hayes said on the carrier's first quarter earnings call, according to a SeekingAlpha.com transcript. "However, as we explored this possibility, the price reached a level where it became clear our strategic plan for organic growth offered a better path to value creation. Growing our West Coast presence has been and remains part of our long-term growth plan.
But where will this West Coast growth occur?
The obvious answer is Long Beach, California, near Los Angeles, where JetBlue operates a focus city. But there are at least three problems. First, because of a local noise ordinance, the airport is capacity controlled. JetBlue can grow a little there - it recently won more slots - but not much. Second, Long Beach does not have a U.S. Customs facility, and though JetBlue is optimistic the airport eventually get one, it may take time. Third, Long Beach, while a strong market, is not Los Angeles. Deep-pocketed travelers - the ones on expense accounts airlines like to carry - prefer LAX.
Los Angeles and San Francisco seem like better bets. But there's a problem. Neither airport has much gate space.
"We have a challenge in the West Coast with facilities," said Marty St. George, JetBlue's executive vice president for commercial and planning. "It's certainly one of the things we find attractive about Virgin America. We've been working with the airport authorities in both airports trying to get additional gate access, and we're still optimistic that we will get there at some point."
The good news, St. George said, JetBlue has a reasonably large presence in Southern California because of Long Beach. But Northern California has been more challenging.
"With respect to Northern California, we're somewhat constrained now," St. George said. "We actually don't have our own gates in San Francisco today, and we're always looking for opportunities to grow more."
At both airports, JetBlue executives said, the airline will be lobbying local officials to give it more gate space.
"We do believe that there needs to be access for airlines like JetBlue to come in and offer more choice and lower fares," Hayes said.
How do you think JetBlue will expand in the West? And beyond Los Angeles and San Francisco, what other markets do you think would work well for JetBlue?