Cranky: Some would say that the rapid growth of JetBlue is what caused you problems there. Is that an issue here? Or do you not think that was issue there?
David Neeleman, CEO Azul Airlines: I’m not gonna tell you it wasn’t an issue. JetBlue was kind of built for lower fuel costs than what we had. So it took an adjustment period. That was part of it, certainly infrastructure. I was more focused with growing the business from a marketing perspective and I think our operation didn’t keep up maybe as well as it should have.

I had a COO [current President and CEO Dave Barger] that was in charge of that. I think the Valentine’s Day storm showed a weakness in operational recovery areas so that’s an issue. I looked at that experience in Brazil and we have a great team of people down there. We built all of our systems in the beginning, where JetBlue should have been. There was some people who were supposed to be focusing on that, obviously they weren’t. So I’m not leaving anything to chance.

Cranky: It seems, the article I was reading, it seems that there’s still sort of an almost bitterness about what happened there. Maybe it’s just a dissatisfaction. Does it still bother you? Obviously, Azul means blue. Is this still something that bugs you?
David: Yeah, it bugs me. You had a board that was rash and hasty and made a decision that didn’t need to be made at the time. The crewmembers didn’t really deserve that kind of treatment either. They had a certain vision for the company, an expectation. All of a sudden overnight that was changed. Things are different at JetBlue today. They’re not the same as they were.

Maybe some areas they needed a change, but you know, the camaraderie we had, a lot of things we did in the customer service area, I just don’t think it’s the same company and there are a lot of people lamenting that. Every time I fly, people say such things. “Wish you were back.” I wish they would say, “We’re doing great, it’s awesome. Thanks for starting it.” I would much rather have that.

I built JetBlue for one reason. I didn’t need the money. I wanted it to be a great place to work, a great place for people to fly differently than the other guys. Same thing at Azul. It’s your legacy, you know. And you want to make sure. I still think JetBlue is better than anyone else but it’s not the same. When you get bigger, it’s hard to keep it the same. But Southwest Airlines has been around for 40 years and they’ve been able to maintain a lot of happy people working there.

Cranky: You’re still a fairly large shareholder. As a shareholder, what would you want to see JetBlue do differently?
David: I would like to see it focus on customer service. I tell people that at Azul. I only have two goals for the company. I want this to be the best place you ever worked and I want every customer to say, “wow, that was a great flight.” If you can do those two things, you’re gonna grow and be successful. That’s really it. It’s just a focus. I’ve been on some delayed flights on JetBlue lately and didn’t hear anything about the customer bill of rights. In those days, we did things that were special.

JetBlue still wins the JD Power award every year but if you look at the scores, it’s all the TVs and more legroom. If you look at the customer contact scores, Southwest wins all those awards, those categories. And they never did. I think you can make a difference in a commodity business.

Cranky: Back to Azul for a second then I’ll let you go. Can we expect to see Azul outside the Brazilian borders?
David: The market size just isn’t that big. Don’t know if you saw the news on TAM and LAN, still trying to figure out what the heck that is, but the cross border stuff in South American countries is just a tiny fraction. Maybe it’s just a play for TAM to get some management over there, but the market’s just not that big and the market in Brazil is huge. So we’re going to focus on Brazil. Never say never, but we’ve got plenty to do.

Cranky: Not likely to see any widebodies coming in, right?
David: No, not now. We’re small guys now. We like smaller – much bigger opportunity there.

Cranky: I appreciate it. Good luck continuing to grow Azul. Maybe one of these days I’ll be down there and take it for a ride.
David: That’d be great, we’d love to have you.

Cranky: I’m curious about the fleet choice. You started with the Embraers. I assume it was a conscious decision to go with a smaller gauge than you started with at JetBlue?
David Neeleman, CEO Azul Airlines: Yeah, we have our competitors down there, Gol and TAM. Between the two of them they have over 200, which doesn’t seem like a lot, but they have a lot of narrowbodies. Gol flies mainly 737s, mostly 800s with 185 seats in them. TAM has Airbus 319s, 320s, and 321s, so that kind of market was being served in a lot of big markets. And we couldn’t get in to the big, the filet mignon, they call it, Conghonas in São Paulo, so we thought well, what’s the best strategy? It was to go between cities with no nonstop service.

Of the 22 markets we fly, in 16 we’re the only nonstop. And the others, with one exception, we’re the market leader. The interesting thing about the Embraer 195 is that our trip cost is about 35 to 40% less than those guys are. So that means you can actually be making 15% to 20% on a market and they could be losing 20%. We have higher RASM [measure of unit revenue] than they do. Even though our average fares are less. For example, we had in May an average fare that was 30 Reais [about US$17] less than they had, but our RASM was 20% higher because we had an 85% load factor and they had a 58% load factor.

Cranky: Was part of the decision with the Embraers also a political aspect? Choosing a Brazilian-made plane?
David: That was just the frosting on the cake. We would never have done it just for political reasons, but having that advantage, we’ve certainly made the most out of it. Now with the ATRs come along. . . .

Cranky: Yeah, I was going to ask about that.
David: There are a lot of cities that just don’t have service, period. So we’re going into a bunch of cities in interior São Paulo that either have 1 or 2 flights a day or none. We give them good service, we’re kind of doing to ourselves what we did to the other guys. Because the ATR has about a 40% lower trip cost and about the same seat cost, which is astounding. The reason for that is that turboprops burn a lot less fuel and the cost of fuel in Brazil is about $1 more than in the US.

Cranky: With the ATRs, I looked at that and said, ok, you’re clearly not going to look at Embraer. You could have gone to an Embraer 170 if you were just concerned about the seats, but from a cost perspective that’s not a cheap plane.
David: Yeah, people like jets but jets just burn a lot more gas. An Embraer 145 with 50 passengers burns twice as much gasoline as a 70 seat ATR.

Cranky: Yeah, that’s why nobody wants the 50 seaters anymore.
David: Yeah

Cranky: I’m assuming you also looked at the Q400 so what was it about the ATR?
David: It was a couple things. The Q400 offers two advantages – it’s faster, flies about 50 knots faster [Cranky note: ATR says the ATR 72-600 max cruise speed is 276 kts while the Q400 is 360 kts] and it carries 6 more seats at the same seat pitch. The first hour doesn’t really save you that much with the speed. Most of our flights are 1 hour or 1.5 hours so it was not a big deal to us.

And the Q400 weighs 10,000 lbs more than the ATR [Cranky note: Operating empty weight for the ATR 72-600 is 28,682 lbs and for the Q400 HGW is 37,888 lbs] and burns about 30% more fuel. We didn’t need the speed, we didn’t need the seats, so why would we spend 30% on gas? For us, it was really a no-brainer to go with the ATR.

Cranky: With the ATR, are you treating it as the same type of experience onboard or is more of a traditional express type of service?
David: Well, it’s a very short flight. The average stage length is under an hour. I’m not going to put LiveTV on those planes. We’ll have that by the end of the year on the Embraer 195s. There’s 2/2 seating, leather seats, good seat pitch. Comfort issues will be the same as what we have on our 195 fleet. We just won’t have in-seat TV sets.

Cranky: Back to the Embraers. I know there were teething probelms with JetBlue in terms of dispatch reliability. Have those been worked out?
David: Every single plane has kind of a break-in period. We’re finding that the dispatch reliability on the 195, and that’s our bread and butter, every plane has its little idiosyncrasies, but we’re really happy. We’re flying them 14 hours a day and our dispatch reliability is over 99%, so we hardly ever canceled a flight due to maintenance.

Cranky: 14 hours a day?
David: Yeah, 13 or 14 depending upon the month.

Cranky: Wow. So you’re continuing this rapid growth path here, right?
David: Yeah, I mean whenever you have an opportunity and a market, to make sure you get established and have economies of scale. . . . There’s a wide open market in Brazil and we’re taking advantage of it.

And that’s it for part two. As I mentioned, come back tomorrow when we talk about what David thinks is wrong with JetBlue and what the airline needs to do to fix it.

Everything you’ve heard about David is true. He never stops working. In fact, our first call was supposed to be on Friday before his daughter’s wedding. Something else came up and we tried to connect on the Sunday after. Ultimately, he called me after walking off a redeye in New York on Monday morning. He thinks nothing of commuting down to Brazil. He is always thinking about a million things a minute. It’s impressive and, yes, tiring.

We had a wide-ranging discussion on everything from fleet decisions in Brazil to his departure from JetBlue. He’s still not happy about that and has a list of things that he thinks JetBlue needs to do. David doesn’t hold any punches, and that’s refreshing. But you’ll have to wait for part three for the JetBlue discussion. Today, we start with talk about Brazil’s fabled air traffic control system and the rapid growth and opportunity in the country. Tomorrow in part two, we’ll look at Azul’s fleet decisions.

Cranky: With Azul, you’re sort of following a similar path of rapid growth, low cost carrier [like JetBlue] – kind of filling a niche that hasn’t been filled before. I was reading an article recently saying some of the lessons you’ve learned. Every time you start with a new airline, you change things around a little bit. I’m curious with Azul, what are the things you’re doing differently, above and beyond what you’ve done in the past?
David Neeleman, CEO Azul Airlines: It’s much different in Brazil than in the US in a lot of ways. If you were to go down and fly Azul, you would not think there was any difference [compared to JetBlue]. But behind the scenes, there’s a lot of market stimulation, and a lot of different things that we do because the market is 1/3 the size of what it needs to be. When we started flying it was about 50 million; then it was 56. I think this year will be 65 but the number should be closer to 150 million.

Cranky: There’s clearly a lot of opportunity, but one of the issues in the past has been Brazil’s disorganized air trafic control system. Is that something that’s improving or are you just able to work with it the way it is?
David: It’s certainly improving. We’re used to seeing things move a lot quicker in the United States. Here it’s a learning process. They’ll get there. They’ve had, you know, the Gol crash . . . traumautized the country. But they’re very careful and they’re very proud of what they do have. We’ll work with it.

We’re not just concerned about the in-the-air stuff as we are the infrastructure on the ground. There’s plenty of infrastructure today in most cities, but as the market starts to grow, there’s going to need to be a lot of new construction of terminals, new tarmacs, parking, to handle the growth.

Cranky: Is the airport funding system similar to the US where they build and then the airlines end up paying or is government-funded with no reimbursement?
David: It’s an enplanement fee rate – they charge the equivalent of about $10 to $12 per domestic passenger depending on the airport. That goes to Infraero, and Infraero is the agency that governs most all the airports, so for one thing you have one group that does it all which is good. If you have a problem, you go to one source with local management. But they don’t have a lot of experience with temporary terminals and temporary facilities. . . .

We haven’t really had to do that before, because flying in Brazil was mainly for the elite, for the A and the B class. There’s A, B, C, D, and E in Brazil. And now that the C class is growing – there’s a hundred million people in the C class – and C class people are starting to get credit cards, half of them have credit cards. So we’re seeing a lot of new travel and a lot of people are traveling who have never traveled before. It’s easy to see it when you have flights between cities that have never had nonstop service before. Travel has been expensive and inconvenient.

Cranky: So the Azul target is the C class?
David: No, no. Our target is the A, B . . . [and more]. When I got down there, I was giving a speech, and one of the other airline guys came up to me and goes “look dude, you don’t really know what you’re talking about. We’re seeing more people travel but the people who always travel are just traveling more. We’re not seeing new travelers.”

But that’s what we’re seeing. We’re seeing both. We have one market, Viracopos to Salvador, which is kind of like São Paulo to Ft Lauderdale kind of thing. That used to have about 34 people a day. Today there’s over 500 a day. So, we’re seeing that growth in a lot of markets that just didn’t have air service before. It’s great to see.

Next up, we’ll dig in to Azul’s fleet choices and then we’ll touch on David bitterness with JetBlue.

LAN-TAM Merger: U.S. Carriers Sweat The Fate of Alliance Partners – BNET Headwinds
LAN and TAM are merging, and everyone wants to know which alliance the combination will choose. Could it be both?

how to keep your flight attendant from jumping off the plane – Antibride
Admittedly a fluffy story, but it’s a light-hearted look at how to treat a flight attendant onboard (with some serious points).

JetBlue’s All-You-Can-Jet Turns Back to Twitter to Fill Seats – BNET Headwinds
It’s baaaackk. JetBlue’s All You Can Jet has returned and the airline is relying on Twitter to get the word out.

Flight Attendant Demands May Block Southwest’s Push Toward Bigger Planes – BNET Headwinds
I thought Southwest’s announcement about getting a larger plane was odd, but I then I started looking at the labor angle.

How to Fix LAX By Bringing Alliance Partners Together< - BNET Headwinds
I admit it’s a reach, but LAX won’t be able to spend much money and this could be a big improvement for the customer.

Why Delta Airlines Decided to Invade Iceland – BNET Headwinds
Delta’s going to Iceland, just like everyone else. But I don’t think it’s a bad move.

Stressed JetBlue attendant not flying solo – Crain’s New York Business
Crain’s asked me about the now famous JetBlue flight attendant who popped a slide and walked away.

JetBlue’s Stress Test: A Peek at the Secret Fantasy of Every Flight Attendant – BNET Headwinds
I honestly didn’t want to write about this, but the story blew up so fast, that I had to jump in.

Pilot Outsourcing a Tough Challenge for United-Continental Merger – BNET Headwinds
Pilot scope clauses are going to be front and center in the United/Continental merger. Did the SkyWest acquisition of ExpressJet have something to do with that?

JetBlue Plays It Smart (and Serious) After Steven Slater Incident – BNET Headwinds
It’s been an interesting week for JetBlue, and now the airline is talking directly to its employees about the Steven Slater incident. It’s an excellent letter.

Cranky: It’s funny you talked about the beverage service. There was a lot of discussion on the blog about the express beverage service.

Dave Clark, Director of Route Planning: I forwarded your comments to our Director of Product Development [Rachel McCarthy].

Cranky: There were a lot of comments about it. For me, it was a minor thing, but I thought that was an interesting one, because people started getting passionate about it. I was just curious if that’s something that might be revisited.

Dave Clark: Rachel and I discussed this. Is it too limited? I mean, some people on the comment board said “Southwest does a full service from Oakland to Reno, 38 minutes block time. Why does JetBlue have an express service?” Rachel and her team were really enthusiastic to get that input. I think it’s something they’re going to be looking at in more detail. I think they’re worried about consistency where we’re not halfway through the cabin and then because of turbulence, the back half of the cabin gets nothing. One of the concerns is that everyone gets something. The comments, especially in your article, now they’re going to look at it. It created a good debate in our offices.

Cranky: I realize it’s not what’s keeping you up every night Dave, but still, it’s interesting.

Dave: Well, the aspect of exceeding expectations is so important, my heritage at New York Air with 146 seats on an MD80 flying from LaGuardia to Boston and DCA with a full service. So it’s not that it can’t be done, it’s can you be consistent? And what the people really want, because people are brining more and more onboard the airplane whether it’s inflight entertainment or food and beverage. But I do think that if someone’s flying from JFK to Syracuse or San Juan to Santo Domingo or Burbank to Las Vegas, the opportunity to say “hey, I’d just like to have a Presidente beer,” I’d like to be able to satisfy that.

Cranky: You talked about IFE there, wireless is something you’re happy to be a follower right now and coming out with something good and exciting soon?

Dave: We want to have a wireless application soon. By design, we were a follower. When you look at today’s offering, for the most part ground-based and the pricing is really something that’s being powered by the supplier and the branding as well. That’s something we do a little bit differently. So I think it’s been prudent for us to first of all validate, which we did through BetaBlue, the ability to use a ground-based network, because it also told us what we couldn’t do. Think about the Caribbean.

I think the ability to be a follower and to partner with some new partners in what their capabilities could be which obviously would be satellite-based, is pretty exciting. And at the same time, if we find that we have to go a traditional path for a couple years until technology is further enhanced, we’ll do that to. I think people think of JetBlue as a leader in inflight entertainment, Brett, which gives us pause too. We have 140 choices today with the TVs, with the premium entertainment, with satellite radio. We’ve had a little bit of a people understanding, but clearly people are looking for wifi especialy on the long haul. Satisfied to be a follower right now because we’d like to leapfrog what’s out there today.

Cranky: It does help when you have LiveTV already on the plane. I’m curious about LiveTV. When I flew down from Sacramento a couple weeks ago, the plane was dark, TVs weren’t working. The captain made it sound like, I don’t know if it’s an increasingly common occurrence or if it’s something that he’s just seen a lot. Have there been reliability issues? Is that something you’re focused on?

Dave: Very much so [as a focus]. Statistically, the system is very reliable. We track a metric called dark aircraft, a metric called number of seats inop by aircraft. We track even the channels if we’re having challenges with individual channels as well. The beauty of the system is that it downloads everything into our LiveTV group so we can track the wellness of the fleet. That being said, a year ago last summer, we were absolutely not pleased with what we were seeing, but we’ve seen huge improvements in the last year. It’s interesting too. What was it? I think a lot of it has to do with new equipment we were putting into the aircraft. I don’t think we’d see JD Power 6 years in a row if we had consistent problems because it’s such a hallmark of the JetBlue brand. We’re really pleased with what we’re seeing today.

Cranky: Sorry I’m kind of digging into the weeds on some of these things, but sometimes I think it’s fun to dig in to get that high level perspective on these things. . . . I think we’re out of time. I could do this all day, of course, but you have other things to do.

Dave: I appreciate the time to talk. As I shared in Phoenix, to come out here to Long Beach and see mounds of dirt and the construction . . . I’m really excited. The airport and the economic impact, and how we can continue to invest, whether it’s commuter slots or whatever it might be, doing it respectfully. Maybe Dave [Clark] can give you some more on that. So are we gonna go to Guadalajara? It’s on tape, come on.

Brett: Guadalajara?!

Dave Clark: There’s an open authority at LAX right now.

Brett: Are you looking at that?

Dave Clark: We’re looking at continuing to accelerate our growth to Latin America, including Mexico, so part of it is knowing where we can fly. It leads to the question of an FIS [customs/immigration facility] in Long Beach. We could fly to Cabo whereas at LAX we can’t.

Brett: Very interesting. Thanks guys.

Cranky: The open architecture – a lot of people seem to think that you’ll just go naturally into oneworld at some point. Is the open architecture something that prevents you from going into an alliance? Or is it just “we’ll think about it when the opportunity comes up”?

Dave: I think a good way to look at it is as the largest airline at Kennedy, largest domestic airline in New York, largest airline in Boston, locations like that. You look at Kennedy as, depending on the time of year, close to 90 airlines operating in and out. Open architecture, whether it’s oneworld, Star, Skyteam, or unaligned, that’s good for JetBlue. Because it’s the power of our network. It’s the affirmation of the brand. It’s the investment we’ve made whether it’s on the ground or in technology. I think we’ll start to understand more about traffic patterns as the result of each partnership, which gives you more data, more pixels to say, what makes sense? To declare a path into an alliance is limiting as well. I think we’re so different because the geography and power of JFK, and we’re in a really nice position to be in.

Cranky: I take that to mean that if American came knocking, saying they’d like to sponsor you into oneworld, similar to what BA has done with Air Berlin in Europe, it’s something you would consider but you don’t have enough data yet knowing how all the flows work to make a decision on something like that?

Dave: I think it’s early. But we have historically been an organization that’s always open to taking a meeting because you want to explore what makes sense, whether it’s oneworld or somebody else. Because it’s the best way to optimize our relationships and our revenues, so we’ll see what plays out. Again, it’s so early. With Sabre, that conversion was January 29, so we’re still in effect still putting in place pieces of Sabre to optimize our abilities electronically, so the next couple of years . . . the traffic patterns and behaviors are important. There’s nothing better than looking at data as a result of these partnerships to help with these decisions.

Cranky: On the American partnership, I think a lot of people were taken by surprise by it. Looking a little further, it seems to make sense. Is that something you guys had focused on or did American reach out to you? As you said, you’re open to taking a meeting.

Dave: Sure, American reached out to us but I look at it, I love the word contrarian. First of all, we’re contrarian because we’re into our second decade. If you look at the airline industry since deregulation, the number of airlines that have flown into their 2nd decade is pretty rare . . . . We’re running the company based on financial metrics, return on invested capital, cash flow. That is different. Product. We’re looking at the JD Power award six years in a row, best in class, highest score. That’s contrarian. Not overbooking, contrarian. Even more legroom, contrarian. Culture, direct relationship with our staff in a heavily organied industry, contrarian.

So you look at American and JetBlue in the interline relationship, the partnership, the slot swap, the frequent flier, why not? Because in the traditional models, I still believe that fundamentally the industry is broken. So you’ve got to do things differently. What got us here in the first 10 years won’t get us there in the next 10 years, so I’m really delighted. I’m excited about what the American partnership could mean for us. They have a very significant presence in New York. So the ability to offer our customers in 18 of our markets, Buenos Aires, Tokyo, London on an itineray and vice versa, it’s pretty significant.

Cranky: And DCA [Washington National]

Dave: That’s right. And access to DCA in exchange for slots that I imagine American can better utilize than we can. And don’t forget the additional flight into White Plains. That’s contrarian, it’s such an important word in this business.

Cranky: Ok, you want to talk contrarian, so I have to bring this up. Snack boxes.

Dave: I was just gonna say, it had to be snack boxes.

Cranky: I’ve been a vocal critic of it. You know, I came over and did the taste test. Some tasted good, but it’s nothing special. It’s similar to stuff youll find somewhere else. So it’s just kind of boring, I guess, and not what I expect form JetBlue. I expect a better experieince and the snack box doesn’t really fit into that. I’m kind of curious where you see that going. Is this something that’s, as I’ve heard others say, it’s a step?

Dave: I look at it as additive. By comparison, other airlines that are selling their snack boxes, that’s basically what the product is. . . . For us, beverage service is what it’s been for 10 years. The ability to participate in the full selection of beverages. You see that at other airlines, but I don’t think you see access to make yourself at home in the galley. I look at the unlimited snack basket. Whether it’s the traditional blue chips or other snacks. The product already is solid, so when you start to look at over 3 hours and 45 minutes enroute, especially on the transcons, I look at this as additive. Again, it’s directional.

There are some pretty interesting names to partner with to create that next iteration of the snack box. I would like people to think, Brett, your readers to think, that JetBlue is kind of a cool airline. Somebody is going to come up with that next generation, you start to talk about cobranding opportunities, that’s just cool. I think XM radio was thought of that way as well as DirecTV. We’ve been selectively a follower when it comes to the wifi brigade as opposed to really what’s happening and we’re working hard on that iteration as well. Look at the snack boxes as additive. Look at it as directional.

Cranky: Alright. We’re here in Long Beach, anything you want to say?

JetBlue CEO Dave Barger: Go Angels! How’s that? No, I think it’s really exciting to be at the airport and see construction taking place. I think to see the investment with the parking structure taking place in earnest . . . looks like we’ll be in the ground with the terminal redevelopment by the end of the year, probably two years with the phasing with that design . . . it’s exciting. Where we’re at today, we’re finally seeing the investment, plus the tarmac investment that’s been taking place, it’s exhilarating. We’ve needed it and now we can see the finish line.

Cranky: Yeah, I’m curious to see – you’re already using all your slots, when you have more terminal space are there going to be any thoughts about trying to get the Embraers in the commuter slots?

Dave: Specific to the commuter slots, we think that would add increased utility . . . looking at how best to optimize limited resources at an airport like Long Beach. What it means to the community, what it means to the vibrancy of the city and the surrounding airport. We respect the statute, the historical meaning of it . . . but the fact is that airplanes are totally different in terms of technology than when the statute was put into place. I think what’s most important is that the investment is taking place. It’s great to see concrete being poured at Long Beach.

Cranky: One thing about Southern California, we’ve heard a lot from you on the East Coast lately. Boston is growing, [Washington National (DCA)] is starting up. It’s been pretty quiet out here. Are there any plans in the future to have a west coast focus at all?

Dave: Actually, I believe there’s been pretty significant investment and focus that’s taken place in the last year. Let’s look at the video tape. Now we’re in LAX – we opened it with four flights and now we’re at six. Burbank is at four, Long Beach is at 30, so we have 40 today. A year ago we weren’t in LAX, so there’s been pretty significant investment. . . . Fact is we have 5 focus cities of which LA, the Basin, is one of those including Lauderdale, Orlando, New York, as well as Boston. Transcons appear to be doing quite well. The shorter haul flying out of Long Beach appears to be doing well. Is that the economy? Is that the competitive landscape? Is it oil? Is it the discretionary dollar? I think it’s all of the above, so we’re excited about what’s happening in the Basin.

Cranky: It’s good growth at LAX for sure, but I think from a Southern California perspective you haven’t added any new destinations FROM Southern California. Maybe frequency increases. So I think that’s more what I was talking about – increase in breadth as opposed to depth.

Dave: I think that increase in breadth includes adding frequency in a market. We’re at 30 in Long Beach, a historic high. And everything we’re doing here is 150 seats. So it’s a better use of a precious resource than a 50 seat jet. Multiple frequencies into Seattle, into Portland, into Oakland, into San Francisco, over to Las Vegas, plus the transcons, plus Austin, and Chicago. While opening more cities is something we’d like to do, we’re focused on just making the pattern of service relevant to the business traveler as well as the discretionary traveler. So I think it’s another way to look at what we’ve been doing. Our network is quite a bit different than what it looked like just a couple years ago.

Cranky: Absolutely. The long hauls have been trimmed down in favor of the short hauls in Long Beach, and then a lot of those have gone over to LAX.
Dave: Interesting because another opportunity would be a change in the commuter slots. I mean, if you only have 30 today, but you want a pattern of service that will appeal to the business traveler to Portland. . . . It’s still a finite number, so something has to give in there somewhere, and that’s why some frequencies have been relocated out of Long Beach. We respect the statute but I don’t think that drives best utility for the community.

Cranky: I’ll go back to LAX for a second. One thing LAX has that Long Beach doesn’t is international feed. You guys have been focused on the alliances, but they’ve all been East Coast so far. Can we look forward to seeing some of those opportunities where you might be feeding Asian carriers in LA?

Dave: I think it would be exciting. I mean, as I look at our second decade or part of our second decade, this open architecture, the opportunity to partner with really anybody. The Sabre investment has really allowed us to enable the relationship with El Al most recently, American, South African. Of course, we’ve been in place with Lufthansa but now to optimize it, Aer Lingus, Cape Air. I think it’s safe to say you’ll see more and more announcement regarding partnerships, and potentailly that could certainly be off the West Coast. A place like LAX or SFO, by definition that’s where it would have to take place.

Stay tuned for Part 2 and 3 later this week (unless something hugely awesome happens that postpones the rest of this).

JetBlue and American: Why Frequent-Flier Sharing Makes Sense – BNET
JetBlue and American have gotten one step closer to each other by starting frequent flier earning on select flights.

Delta Earnings: Outlook Weak Despite Strong Industry Premium Traffic Trends – BNET
Lots of conflicting information out this week. Huge profits but weaker outlook = confusion.

LA World Airports Smartly Reconsiders Regionalization Strategy – BNET
Interesting words from the LA airport folks – they’re thinking twice about the regionalization strategy now that traffic is so far down at LAX itself. Good.

Continental and Wired: How Not to Do a Promotional Partnership – BNET
Continental has teamed up with Wired to do a pretty awful job of promotion.

What the heck does this have to do with Smurfs? Well, in the airline pricing world, you rarely say the name of a city. Instead, you just sound out the airport code. Even though there’s no “r” in SMF (the airport code for Sacramento), it somehow became known as Smurf.

I had the option of flying out of LAX to Reno and then driving an hour or flying from Long Beach to Sacramento on JetBlue and driving two hours. Needless to say, I chose Sacramento and the tickets were $179.40 roundtrip.

As usual, I left for the airport an hour before the flight and I was sitting around in the boarding lounge (read: double wide trailer) within 20 minutes. For midday flights when the lines are shorter, I may just start leaving home later.

When we started boarding, the friendly gate agent was very careful to tell people where to go, especially since it was a long walk to the plane. He said something like “when you get out there, stay within the metal fences and you’ll get to the plane. It’s the only one out there and it’s called Blue Skies Ahead.” I started smirking, thinking about people wandering aimlessly looking for planes, getting lost, left to die. It’ll be nice when the ramp work is done here.

The flight was completely uneventful and enjoyable. I do have only a couple minor nits that JetBlue might want to think about.

I get that LiveTV is free, and I have no trouble with JetBlue putting ads up to make revenue off the product, but I hate the timing. They let you watch TV on the ground without any issues, but then when you take off, they run ads for a couple minutes. I was in the middle of watching the Daily Show at the time, and I missed the end because of the JetBlue ads.

The other issue is with this “express” service. Once again it was water, Coke, Diet Coke, or Sprite along with Doritos, Munchie Mix, and Animal Crackers. That was it. Since JetBlue has been promoting its new blueberry juice option, I thought I’d give it a try. Not on this flight. Same for my beloved ginger ale. And not even blue chips?

I asked the flight attendant what the cutoff was for a normal service. She said it was an hour, and then looked a bit sheepish after realizing the captain had just told us our flight would be an hour and two minutes. She then said, “Well, it’s really by route. We just don’t have enough time to do a full service on a full flight.”

That excuse was pretty lame since this flight wasn’t nearly full, and the flight attendants had plenty of time to sit in the back of the plane and chat. I know the flight attendants don’t decide if they run a full service or not, so something tells me management might want to look at this policy again.

Other than those minor annoyances, the flight was great. We landed a couple minutes early in the retro Sacramento Terminal B. I was on my way to meet my brother and friends to head up to Lake Tahoe.

It was a fantastic weekend, and after the nine of us caught 27 salmon in the lake, we had a great feast. Tired and a little hungover, we headed back down the mountain. As you would expect, there was traffic on a Sunday afternoon, but we arrived at Sacramento Airport as planned at 430p. I dumped them off for their flight and then I went to return the car before mine.

The shuttle dropped me off again at Terminal B, which lies in the shadows of the massive new Sacramento terminal project. That’ll have to be the subject of another post. For now, I was stuck in a time warp. (Check out the restroom sign.) I sailed through security and popped on to free wifi to do some work before it was time to board.

Although the plane came in on time from Long Beach, it was slow to deplane and we found ourselves pushing up against the departure time. Finally, we started boarding and it started with a bit of bad news.

I saw that we were on N504JB, the second airplane JetBlue took on back in 2000. It looked good for its age, but the insides weren’t keeping up today. They announced that LiveTV wasn’t working. Boo . . . ish. I love LiveTV, but I get a $15 credit (as does everyone else on the flight) since it didn’t work. I’ll take it.

The boarding process was nothing short of awesome. A woman whom I believed to be the station manager started walking the line, making sure everyone had their boarding passes out and even tore off pieces to make sure it would be easy for the gate agent to rip. We boarded very quickly and pushed almost right on time. Great work.

Once onboard, I found a packed flight, and of course, I was the one sitting next to the guy who just had to be farting his way through. On top of that, he was talkative. Without LiveTV to hide behind, I was in trouble.

Fortunately, he did let up as we made a mad dash toward the runway. We launched into the warm evening and headed out toward the Sierras. It was a beautiful ride down as we butted up against the foothills the whole way. We had another express beverage service and I did some work.

We descended in over a smoggy LA. I had a great view of the beach on my left and enjoyed watching airplanes come out of LAX, climbing high as we dropped down.

We came through the thin marine layer before landing in a nice and cool Long Beach.