A Warm Welcome:
Robin Hayes, CEO of JetBlue, was welcomed at the Wings Club Foundation Luncheon to deliver a speech. JetBlue is a significant airline, carrying over 40 million customers annually and operating 1,000 daily flights. Hayes has an extensive background in the aviation industry, including serving as executive vice president at British Airways.

JetBlue’s Introduction:
Hayes introduced key JetBlue leaders: Joanna Geraghty (President and Chief Operating Officer), Steve Priest (Chief Financial Officer), Rob Land (head of government affairs), Doug McGraw (head of corporate communications), and Mike Elliott (chief people officer).

Gratitude and Apologies:
Hayes expressed gratitude to attendees for braving the weather to attend the luncheon. He apologized for having to leave early to catch a flight to Boston for another event.

Boeing and Airbus:
Hayes humorously mentioned Boeing airplanes being present among Airbus airplanes at the event, despite JetBlue’s preference for Airbus.

Appreciation for New York City:
As New York’s only hometown airline, JetBlue loves having visitors and appreciates the city’s support.

Introduction of Rob Land:
Hayes highlighted Rob Land, JetBlue’s longest-serving crew member, who completed 20 years of service.

JetBlue’s History and Vision:
Hayes described JetBlue’s founding by David Newman and other entrepreneurs, who aimed to create a customer-focused, low-cost airline in a challenging market. The founders brought a breath of fresh air into the industry after the challenges faced by carriers in the 1980s and 1990s.

JetBlue University:
Hayes mentioned JetBlue University in Orlando, where new crew members meet with leaders and play a game called “Mergers, Bankruptcies, or Both.” This game highlights the tough history of the US airline industry and the challenges JetBlue faced during its formation.

Challenges Faced by JetBlue:
Hayes acknowledged the challenges JetBlue encountered after its launch, including 9-11, fuel spikes, and the economic downturn. Despite these challenges, JetBlue survived and is approaching 20 years of operation.

Expansion Plans:
Hayes emphasized JetBlue’s commitment to expanding on its founders’ vision of making air travel better and more accessible.

Early Days and Airport Partnerships:
In the early days, many airports were reluctant to accommodate JetBlue due to pressure from larger airlines. However, JetBlue has since established great partnerships and relationships with many airports.

Smaller, Low-fare Airlines’ Impact on Competition:
Smaller airlines can significantly influence competition in terms of pricing and service.

David Neelman’s Prediction in 2000:
David Neelman predicted that industry consolidation could lead to three or four major carriers controlling 85% of domestic traffic (compared to 55% at the time).

Impact of JetBlue at Kennedy Airport:
JetBlue transformed Kennedy Airport from an underutilized international hub to a thriving domestic airport, increasing passenger traffic from 30 million to 60 million annually.

Benefits of Low-fare Airlines and New Airline Models:
Low-fare airlines and innovative models stimulate demand, benefit customers, and uplift communities.

Airline Deregulation:
Airline deregulation led to the success of low-fare airlines and consumer-friendly models, fulfilling predictions made by economists and consumer advocates in the 1970s.

Legacy Airline Market Control:
The U.S. airline market is dominated by four major airlines, which control approximately 80% of the market. This concentration of power has led to limited access to key airport infrastructure for smaller airlines like JetBlue.

Atlanta Airport:
One airline in Atlanta controls over 75% of the airport’s gates, making it difficult for other airlines to operate flights there. Despite having 10 daily flights, JetBlue is forced to use multiple gates spread across distant concourses due to the lack of available gates.

Newark Airport:
Newark Airport is dominated by one carrier, resulting in limited gate space and growth opportunities for airlines like JetBlue.

LaGuardia Airport:
LaGuardia Airport is restricted by slot regulations, and available slots are often acquired by larger airlines. The perimeter rule at LaGuardia Airport adds complexity to the competitive landscape, potentially favoring established legacy airlines.

JetBlue’s Commitment to Competition:
JetBlue remains committed to fighting for open skies and competition in the airline industry. The benefits of competition include lower fares, increased traffic, and consumer choice.

Impact of Low-Cost Carrier Exits:
When low-cost carriers exit a market, legacy carriers often raise fares and traffic decreases. JetBlue has experienced this firsthand, with fares increasing by 65% and 75% in two markets where they exited.

Advocacy in Washington:
Robin Hayes emphasizes the importance of advocating for competition and open skies in Washington to ensure that the benefits of competition are understood.

Impact of Consolidation on Consumers:
Consolidation and mergers in the airline industry have led to healthier brands, but it has also resulted in higher fares and reduced incentives for innovation and service.

JetBlue’s Impact on Fares:
JetBlue’s entry into the Boston-LaGuardia market resulted in a significant decrease in fares, demonstrating the positive impact of low-fare competition.

Big Airlines’ Treatment of New Competition:
Mega airlines often engage in aggressive lobbying and pressure tactics to prevent new entrants from gaining a foothold in the market.

Subsidies and Protectionism:
Big airlines have been inconsistent in their stance on subsidies, opposing them in some cases and supporting them in others, primarily to protect their market share.

JetBlue’s View on Regulators:
JetBlue believes regulators should encourage new players and models to compete on a level playing field.

Air Italy and Norwegian Airlines:
JetBlue questions the big three airlines’ lobbying against Air Italy and Norwegian Airlines, considering them compliant with EU-US agreements.

US-EU Open Skies Agreement:
The US has faced criticism for stalling and failing to uphold its treaty obligations under the Open Skies Agreement, leading to concerns about potential retaliation from the EU.

JetBlue’s Expansion Plans:
JetBlue is considering expanding its operations to Europe, but is wary of potential retaliation from Brussels due to the EU’s stance on the Open Skies Agreement.

Joint Ventures and Antitrust Immunity:
Joint ventures (JVs) between airlines have been granted antitrust immunity, allowing them to coordinate price and schedules, which can reduce competition and lead to higher fares. The three global alliances control close to 80% of the transatlantic market, and their JVs now have a grip on nearly 70% of the market between the US and Europe.

Challenges for New Entrants:
New entrants into constrained airports like Heathrow face significant barriers to entry and growth due to the consolidation of power by legacy carriers. Immunized JVs have enormous advantages in distribution, point-of-sale strength, and other competitive challenges that can be difficult for new entrants to overcome.

Concerns about Joint Ventures:
The power and profitability of JVs have grown significantly since their creation, raising concerns about their impact on competition and innovation. JVs can stifle competition by reducing the number of independent competitors in the market, making it easier for the larger carriers to maintain high fares.

Calls for Regulatory Scrutiny:
Robin Hayes calls for periodic regulatory reviews of JVs to ensure that the consumer benefits touted when applying for immunity are actually being delivered. He emphasizes the need for divestitures and other measures to promote competition and ensure that new entrants can have viable schedules.

Recent Developments and Hope for Change:
The U.S. DOT’s decision in the Delta-Aeromexico JV application included a review after five years, a bar on exclusivity, and a slot divestiture, which Hayes sees as a positive template. Hayes expresses confidence that regulators will address the challenges raised and ensure that smaller players and new entrants have a chance to compete.

JetBlue’s Technology Ventures:
JetBlue has created JetBlue Technology Ventures, which has invested in over 20 companies focused on disrupting the commercial aviation industry and improving the travel experience. These investments include companies working on AI and machine learning for revenue management, micro weather forecasts for better operational decisions, and improving customer interactions.

Concerns about EU Retaliation:
Hayes emphasizes that JetBlue is keen to avoid being targeted by the EU for retaliation if they decide to start flights to Europe. He highlights the importance of ensuring competitive schedules at the airports people want to fly to as part of the decision-making process.

Excitement about New Neighbors in Long Island City:
Hayes expresses excitement about Amazon and Google’s expansion in Long Island City, seeing it as a positive development for the area.

Hayes’ Thoughts on the Influx of Companies Like Amazon:
Hayes believes that the influx of companies like Amazon will make a positive difference in the area, citing the desire of JetBlue employees for more stores and the upcoming opening of a pharmacy.

Transportation and Infrastructure Concerns:
Hayes acknowledges that there are various issues to consider, including access to housing, schools, and transportation.

Hayes’ Optimism for New York and JetBlue:
Hayes expresses excitement about the potential benefits of Amazon’s presence for New York and JetBlue, emphasizing the airline’s status as New York’s hometown airline and its anticipation of transporting Amazon executives.

Appreciation Plaque Presentation:
The Wings Club Foundation presents Hayes with a plaque in recognition of his presentation at the Aviation Leader Series in New York.