Falls Church engineering consultant Mike Rivers has 300,000 frequent-flier points on United Airlines. But instead of trading in some of those points for a free flight on United when he flies to Los Angeles, he saves his miles for international travel and pays $300 to $500 for a ticket on JetBlue Airways, even though he must fly into Long Beach Airport and rent a car to drive about an hour into the city.
The two-year-old, low-cost airline started flying to Fort Lauderdale, Fla., out of Dulles International Airport last November and added Oakland and Long Beach this May. JetBlue competes head-to-head with United, Dulles's largest carrier, on those flights. And it appears JetBlue is winning.
Between April and June, JetBlue flew 27,878 passengers between Dulles and Oakland, while United flew 21,404, according to figures provided by the Bureau of Transportation Statistics. Both airlines offer two flights a day to Oakland. Both have assigned seating and fly Airbus jets.
JetBlue has gained the advantage even though United has first-class seating options (JetBlue is all coach) and offers its passengers the ability to earn frequent-flier miles for trips to Europe, Latin America or Asia. A month before the airline launched its California service out of Dulles, JetBlue executives mailed letters to the business travel managers and chief financial officers of the top 100 Washington area companies. Included in those letters was one free round-trip ticket. The objective was to get the companies to consider making JetBlue one of their preferred carriers.
Travelers rave about two of JetBlue's main attributes: fares and television. Its ticket prices are often about 70 percent lower than those of rivals. For example, a walk-up coach fare on United between Dulles and Oakland yesterday ranged from $516 to $2,600, depending on availability and restrictions. But the same type of fare with the same restrictions on JetBlue ranged from $516 to $600.
And JetBlue offers 24 channels of free, live TV programming through DirecTV at each seat, allowing passengers to watch their favorite programs on such channels as ESPN, CNBC, NBC, Nickelodeon and the Cartoon Network. "I like the TV. It really makes the flight go by, and it allows me to catch up on the news while I'm traveling," said John F. Estafanous, president of Estco Medical in Bethesda.
JetBlue does not require a Saturday-night stay for travelers to get its lowest fares, and it recently gained another advantage when the major carriers began charging people $100 if they missed their flights or wanted to make changes to their itinerary. JetBlue charges $25. "For somebody whose plans may change, you have that advantage with JetBlue," said frequent flier Rivers.
This week the airline was named best domestic airline by the readers of Conde Nast Traveler, eclipsing Midwest Express, which had held the title since 1995.
United executives say the airline's travelers still prefer its first-class seating options and its frequent-flier program. "The position that we have taken is that for those people who are price-sensitive, we do offer some fares that are comparable to JetBlue. But for those that are looking for a full-service airline, JetBlue ain't going to give them that," said Joe Hopkins, a United spokesman.
Now that United has secured about $2 billion in wage cuts from its pilots and has deferred about $500 million in aircraft lease payments, it could reduce its costs and become more competitive with JetBlue, Hopkins said.
"The world is changing. Once we bring our operating costs down we'll be able to narrow the gap that currently exists," he said.
Millions of travelers who earn frequent-flier miles by making long-distance calls with MCI could soon be forced to find another long-distance carrier if they want to continue earning those mileage points.
American Airlines, the world's largest airline, said Monday that it is ending its three-year relationship with MCI. In a filing with a bankruptcy court last week, US Airways said it wanted to terminate its agreement with MCI after five years. In August, Delta announced it was switching to AT&T from MCI.
And now United, the nation's second-largest carrier, has ended its five-year relationship with MCI, said Claire Hassett, an MCI spokeswoman. A United spokeswoman declined to comment.
WorldCom and its MCI subsidiary filed for Chapter 11 bankruptcy protection in July. US Airways, which also filed for bankruptcy protection in August, said MCI has not paid the $1.6 million it owes the airline. Long-distance carriers have to purchase the miles from the airlines.
Hassett said MCI is no longer working with American, United and Delta because the reward programs are "no longer economically beneficial to us to continue."
American is replacing MCI with AT&T. Current MCI customers will continue to earn five bonus miles on American for every $1 spent through April 30, but American is not accepting any new members into its MCI American program. Delta customers have until March 1 to earn miles with MCI.