The Top 5 Reasons JetBlue Wants Virgin America…

All good things and seems reasonable.

In my view it’s really all about 5. The rest could be done anytime. Jetblue has slowed aircraft orders recently and shifted mix, I’m sure they could lease planes if they want. SFO could grow organically, if they want. And they could bid more aggressively for slots if they wanted. They have come up lately at each airport.

Without 5, the rest are not great business decisions as competitive forces may make it tough, but all are doable tomorrow if JB wanted.

As for 3, Jetblue tried SFO and OAK when it was smaller and didn’t do well. Perhaps adding more customers, flights, and removing a competitor will finally make it viable. It’s expensive to buy a competitor and transition them, but maybe better than long term competition while building.

My personal view on LGB vs LAX – Jetblue is stuck with LGB. They are there with little competition, but it has shrunk significantly over the years and shifted to regional flying. Yields keep it profitable but not worth growing (unless they can get customs and e190s as commuter flights to form a viable connecting hub). I think JB wants LAX but didn’t see a viable way to compete with southwest’s frequencies and VX’s costs without being willing to sustain losses for awhile. With lower hanging fruit around, they focused elsewhere. This acquisition would allow them to shift a lot of flying with less impact.