June 11, 2007

One-On-One With David Neeleman: JetBlue Eyes Refundable Fares, Codeshares

JetBlue Airways chairman David Neeleman, in his first public appearance since the airline's board shifted CEO responsibilities to president Dave Barger, delivered the keynote address at Corporate Travel World on May 22. He discussed his new responsibilities at JetBlue, the carrier's appetite for more corporate business, new international airline partnership opportunities and his initiatives in Washington, including a coal-to-fuel bill. Neeleman spoke with BTN senior editor Jay Boehmer following his address.

BTN: You told the audience that JetBlue is nearing refundable fares. How far away are you?

David Neeleman: There's really just some technology we're working through. If it gives us more business and if there are policies against it and we can get more for the fare, then why not? Sometimes people fit things into square little boxes, and if we can help them do that, we'll do it.

BTN: You said it's a little more flexible than other airlines.

Neeleman: We were already more flexible in our nonrefundable fares than the other guys, because you can switch names. But this is really the next step, the next generation.

BTN: Is there any rollout date?

Neeleman: We're going to be testing it very soon, in the next week or two. It's really just a technology issue we're working through. We should have had it out before.

BTN: It sounded like you're eyeing new partnerships with international carriers.

Neeleman: We have the largest airline at Kennedy International Airport, and with Open Skies there are a lot of opportunities. Things will change, so we want to be there to connect people to Kennedy better than anybody else does. If any E.C. carrier can fly to anywhere in the United States to anywhere in the country, I would assume that business is going to be coming into New York. We have the network to get in there.

BTN: Does that mean a more formal alliance, like of Oneworld, SkyTeam or Star Alliance?

Neeleman: I don't know about the alliances. We're more interested in what can be done on an individual airline basis. What we found from these airlines is that if their alliance partners can't provide them the service, they're free to go cut a deal with anybody to get the feed they need. Just because they're part of an alliance doesn't mean that they won't be able to cut a deal with us.

BTN: When your duties shifted to chairman, some speculated it could be to find a merger partner, perhaps Delta or Frontier. Are we just hearing the rumor mill turning?

Neeleman: Yeah. I guess you are. There's certainly nothing to announce.

BTN: What's your take on Southwest signing a deal with Galileo?

Neeleman: It was silly for them not to be in it. It used to be, years ago, that GDS booking fees were ridiculously high, and every time anyone canceled or booked, fees just kept on piling up and piling up. Now, the new model is if someone books through the GDS, we'll pay them and if they don't book that way, we won't. If you can bring fresh revenue for us and that outweighs the new booking fee we're paying, it makes all the sense in the world. I would guess that Southwest will figure that out pretty quickly. Not only will they be in Galileo, but they'll probably go to all of them and change their participation in Sabre as well. Given our experience, I can't imagine them doing anything differently than that. We looked at the customers who were booking and it was new business, by and large. They were higher average fares and they were coming on the days of the weeks when we had seats: Tuesdays and Wednesdays. Travel buyers are so fixated on that single channel, because of the reporting, that they can't see beyond it.

Read the rest of this article's at: BTN Online

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