JetBlue may buy shuttle routes
NEW YORK (Bloomberg) — JetBlue Airways Corp. may be interested in buying East Coast routes shed by Delta Air Lines Inc. and US Airways Group Inc. in a possible merger, chief executive officer David Neeleman said.JetBlue primarily would want to buy flight slots at Ronald Reagan Washington National Airport and New York’s LaGuardia Airport, Neeleman said yesterday during an analyst and investor conference at his New York headquarters.
“Those are things we would jump on,” Neeleman said. “Anything is of interest in this neck of the woods,” he said, referring to the northeast US.
JetBlue joins low-cost rivals Southwest Airlines Co. and AirTran Holdings Inc. in showing interest in assets that may be cast off by Delta and US Airways should they combine.
Delta has rejected US Airways’ hostile $8.57 billion bid, saying it’s committed to remaining independent.
Neeleman said it was “inconceivable” that US Airways would sell LaGuardia assets to Southwest, the largest low-fare carrier, because such a move would reduce ticket prices at the competitive airport.
JetBlue is the largest provider of domestic flights at New York’s John F. Kennedy International Airport. It flies from LaGuardia to three Florida cities, and also operates from Washington Dulles International Airport.
US Airways chief executive officer Doug Parker has said he would sell one of the shuttles operated by Delta or US Airways in New York, Boston and Washington if the merger goes through. The sale would be designed to head off antitrust concerns.
“We wouldn’t do anything stupid, but certainly we’d look at every opportunity that happened to be available.”
The combined carrier also would trim capacity ten percent to reduce duplication and help produce $1.65 billion in anticipated cost reductions, US Airways has said.
“What happens in either scenario, I think it’s positive for us,” Neeleman said.
A combined carrier would trim flights in JetBlue’s markets, while a stand-alone Delta would focus on boosting profits, possibly by raising fares.
An increase in ticket prices also would help JetBlue.
Neeleman declined to forecast a possible outcome.
The company said on Monday it had delayed delivery of 32 Embraer 190 jets to slow growth and help restore profit.
Capacity will grow 14 percent to 17 percent next year, about half the airline’s recent rate. Capacity will increase 12 percent to 13 percent in 2008 and in 2009, Neeleman said today.
JetBlue is continuing talks with “multiple” international carriers on possible marketing agreements under which JetBlue would use its US network to fly passengers arriving at Kennedy from other countries, Neeleman said.
