JetBlue to Syracuse: Use it or lose it

CNY Business Journal (1996+), Apr 20, 2001 by Dickinson, Casey J

SYRACUSE - JetBlue CEO David Neelman is giving Syracuse one year to prove the community can convert its desire for low fares into profitability for the carrier. Neelman met with local business and community leaders on April 11, while in town to speak at Syracuse University. In May, the low-fare airline is scheduled to begin three daily flights from Syracuse to New York's JFK.

Coinciding with JetBlue's entry into the Syracuse market, other airlines have lowered their fares to match the carrier's $109 round-trip fares to New York. Neelman calls the drop the "JetBlue effect' 'and says he hopes travelers remember what company made the low fares possible by choosing his airline over those of his price-matching competitors.

"It's a two-way street," he says. "It has to translate into business."

The airline will evaluate its Syracuse flights next year and decide whether or not the numbers justify staying in the market. If the numbers don't justify the company's expenses, Neelman says, JetBlue will join the list of former low-cost carriers driven from the market.

"We're not going to lose money forever," Neelman promised.

The airline turned a profit six months after starting operations in February 2000 and has been profitable every month since November, according to Neelman. He expects the trend to continue through May as the company adds Syracuse service.

The arrival of JetBlue and the coinciding drop in other carriers' fares to New York also has some Syracuse-area business leaders worried that travelers will take rivals' matching fares rather than thanking JetBlue with their business.

"This is our one shot," says David Cordeau, president of the Greater Syracuse

Chamber of Commerce.

Cordeau says he hopes the Chamber's membership will recall other carriers' previous airfares when making their postMay 7 travel arrangements.

On April 30, one week prior; to JetBlue's first Syracuse flights, flying American Airlines to New York and back costs $461.50, according to Travelocity.com. After JetBlue's entry, American's lowest round-trip fare to New York drops to $109.50, matching JetBlue.

"An embarrassingly high, rip-off fare," jokes Neelman when describing JetBlue's top charge of just over $100.

The expanded Carousel Center could benefit from lowered airfares between Syracuse and New York, says Mike Lorenz of the Pyramid Companies. He met with Neelman to discuss JetBlue's impact on Pyramid's plans to make Carousel Center one of the nation's largest shopping centers.

The nation's largest shopping center, Minneapolis' Mall of America, regularly teams with Northwest Airlines to bring shoppers in from across the country. Though he won't predict any such arrangement to bring shoppers to Syracuse, Lorenz envisions the new Carousel Center as a regional catalyst for attracting more Downstate visitors. Tourists, he suggests, could skip long road trips by flying to Syracuse and boarding tour buses at the airport. That is, of course, only if Syracuse's airfares remain affordable for leisure travelers, he cautions.

The Carousel Center is already the area's largest tourist attraction, bringing in 10 million visitors each year, according to a study commissioned by the Metropolitan Development Association.

Neelman isn't worried that JetBlue will have to leave town next year. The company's new aircraft, leather seats, live satellite television, and friendly employees will help keep the airline in the black, he says.

"We're going to do fine in this market," he predicts.