British Airways CEO Alex Cruz Is Preparing to Potentially Feel JetBlue's 'Mint Effect'
The entrance of JetBlue into the transatlantic market is on the mind of a number of major airlines, including British Airways' CEO Alex Cruz.
While JetBlue isn't expected to enter the London market until 2021, and the airport to which it'll fly has still yet to be disclosed, the looming introduction of a JetBlue route — and the 'Mint Effect' — seems to have the attention of Cruz.
"Airline pricing at the end is based on supply and demand," Cruz told Skift's Brian Sumers at the Skift Forum Europe on Tuesday. Cruz mentioned that if someone needs to fly from London to New York in three hours, they're likely not looking at the cost of the ticket.
"If you repeatedly create a sensation or feeling of ripping people off, the moment that customers have an option to travel in a similar experience, they'll leave," Cruz said. "So you need to make sure that the overall proposition of what you have to offer — not just the ticket price, but everything that comes with it — it has to be correct otherwise you will lose customers."
When JetBlue launched its business-class Mint product in 2014 on popular routes between New York and California, it transformed the transcontinental premium cabin market. Fares that once reached several thousands of dollars for a round-trip ticket decreased exponentially in order to match the introduction of JetBlue Mint's sub-$1,200 round-trip fares. Not only were the prices much lower than those offered by legacy carriers, but the Mint product is widely considered to be the best flying on transcon routes — with lie-flat seats, tasty food options and friendly crew.
JetBlue CEO Robin Hayes announced the airline's intention to launch flights from the East Coast of the US to London last month, alluding to the fact that the carrier intends to come in with the Mint Effect. "It’s the largest market that we don’t serve, out of both New York and Boston. It’s also a market that suffers very, very high fares, particularly in premium, so it is ripe for the JetBlue treatment of coming in and offering a much lower fare and a much better product and service to go with it."
Of course, JetBlue is coming into a market dominated by Cruz's British Airways and its Oneworld partner American Airlines. In fact, AA and BA operate 48% of the roughly 60,000 weekly seats between New York and London.
A quick scan of round-trip business-class flights between New York and London with British Airways hovers around the £2,000 mark (~$2,600). While we don't yet know exact prices of what JetBlue plans to charge for Mint seats on the transatlantic routes, they'll likely be much lower than the current offering from BA.
What does this mean for passengers? Likely, making business-class travel on the New York to London and Boston to London routes much more affordable.
