Magazine article Newsweek

Try Lounging in Leather: The Start-Up JetBlue's Giving the Major Carriers Stiff Competition with Classy Service and Cheap Seats

Magazine article Newsweek

Try Lounging in Leather: The Start-Up JetBlue's Giving the Major Carriers Stiff Competition with Classy Service and Cheap Seats

Article excerpt

It's the end of a busy workday, and the 4:45 p.m. flight from Rochester, N.Y., to New York City is crammed with weary business travelers. But this is no cattle car in the sky. Passengers relax in wide leather seats and channel-surf on live satellite TVs. The silver-haired flight attendant handing out bags of blue potato chips actually turns out to be the airline's CEO. "Don't look at how the market ended," he warns one businessman. "Just tune in to the 'I Love Lucy' reruns." Best of all, a round-trip ticket on this luxurious new jet cost only $98. Is this some kind of blue-sky fantasy? No. This is JetBlue, a new discount airline flying out of New York's Kennedy Airport.

JetBlue is not just any airline start-up. It is an airline upstart. In an industry where new airlines usually go out of business before their first birthday, JetBlue managed to turn a profit last summer after only six months in the air. But despite fares ranging from $49 to $249 one way, JetBlue doesn't act like a no-frills airline. In fact, it is providing much-needed competition for the major air carriers, besting them in on-time arrivals and luggage handling. Maybe that's why JetBlue, which flies to 12 cities on the East and West coasts, had the highest percentage of filled seats in the industry in February. "I've never been delayed a minute," says investment banker Neal Cohen, who flies on JetBlue's roomy Airbus A320s to upstate New York weekly.

Why is JetBlue succeeding where so many have failed? Cash. Lots of cash. Blue-chip backers like billionaire George Soros and Chase Manhattan bankrolled JetBlue last year with $130 million--the most well-financed start-up in aviation history. …

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