etBlue, the discount airline known for its all-coach cabins, blue potato chips, in-flight DirecTV, and superior beef jerky, will launch its first premium-class cabins next year — a push to grab some of the high-end spenders it's been missing out on.
Of the 30 new Airbus A321s entering JetBlue's fleet this fall, 11 will be outfitted with luxury cabins containing first-class seats, four of which will be sectioned off with sliding doors. Management has been tightlipped about ticket costs, but those who splurge will get hot meals and toiletry kits, and 15-inch touch-screen TVs with over a hundred DirecTV channels. And of course, a ton of extra legroom. The planes will be used for flights between New York, Los Angeles, and San Francisco. Check out this video:
The change represents a huge shift for JetBlue. Since its launch in 2000, the airline has proudly offered low-cost, one-class seating, and has continued offering high-quality snacks and legroom to all, while competitors have crammed their coach cabins and cut amenities to control ticket costs.
But over the past decade, JetBlue has struggled to grow profits. In 2012, it made $128 million in net profits from $5 billion in revenue — not much growth from 2003, when it made $104 million off just $1 billion, says The Wall Street Journal. And its stock price has spiraled to $6.50 a share, compared to its 2002 IPO price of $45. Meanwhile, competitors have been raking in profits with first-class tickets, charging $4,000-plus for round-trip, coast-to-coast flights.
So how will competitors cope with another airline gunning for their big-spending clients? Probably the same way they have been: by creating an even bigger, better, and more comfortable first-class experience. "There's an arms race going on among carriers," Bob Lange, senior vice president, head of market and product strategy at Airbus, the European plane maker, told The New York Times.
Billions are being spent on research and development, architects, industrial designers and even yacht designers to pack seats with engineering innovations and fancy features. Just fabricating a single business-class seat can cost up to $80,000; custom-made first-class models run $250,000 to $500,000. [The New York Times]
Still, JetBlue is cautious. The new cabin "represents a pretty big change for us," JetBlue's vice president of network planning, Scott Laurence told Bloomberg Businessweek. "And one of the reasons we're not talking as much about it is we have been very deliberate, very gentle with how we're going to introduce change to our culture. Our culture is incredibly important to us, and I think as we change that we do so with a very sober mind-set."
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