AirTran May Get Lift as JetBlue Heals

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9/30/03 - Wall Street Journal: Heard on the Street: AirTran may get lift as JetBlue heals blow to its public image


Sep 30, 2003, (Wall Street Journal /FT Information via COMTEX) -- AirTran Holdings Inc and JetBlue Airways are enjoying profitable operations and significant stock gains even as the country's major airlines continue to post losses amid an industry downturn. However, AirTran may generate greater interest from investors following JetBlue's disclosure of passenger information with a Pentagon contractor. Although JetBlue has apologized for the oversight and is not expected to be affected in terms of bookings, the incident could make some investors prefer AirTran instead.

Abstracted from: The Wall St Journal (US Edition)

Copyright 2003: Financial Times Information. All rights reserved

I think they've learned their lesson on this one, although the hard way. I'm still going to give them a try or two anyway, maybe from Atlanta to Las Vegas or Los Angeles. Satellite television in every seatback is quite tempting for this father travelling with his 4-year-old

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Here's the whole scoop:

[ The Atlanta Journal-Constitution: 9/23/03 ]

JetBlue sued for disclosing passenger information

Associated Press


SALT LAKE CITY -- A group of passengers has sued JetBlue Airways Corp. for passing their personal information to a Defense Department contractor.

The suit follows JetBlue's acknowledgment last week that it had given information from about 5 million passenger records to Torch Concepts of Huntsville, Ala.

Torch produced a study, "Homeland Security: Airline Passenger Risk Assessment," that was purported to help the government improve military base security.

The class-action lawsuit alleges fraudulent misrepresentation, breach of contract and invasion of privacy.

JetBlue chief executive David Neeleman said Monday that the information contained "name, address and phone number, along with flight information, but absolutely no payment or credit card information."

Utah attorney James W. McConkie filed the lawsuit Monday in 3rd District Court on behalf of five named plaintiffs and a representative class, seeking compensatory -- but not punitive -- damages.

"We got the sense that Mr. Neeleman wanted to make this right, so we commented in our lawsuit that we wanted to pursue the matter, but not in a way that would damage the financial viability of the company. It's a good company," McConkie said.

JetBlue spokesman Gareth Edmondson-Jones said Monday that he had not seen the lawsuit and was unable to comment.

OUCH!

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A pretty big gaff. Fortunately, they admitted their mistake. I still like these guys (every seat is leather with satellite TV in the back of the headrests), but just a little less than I used to. Also, they don't compete very much with AirTran out of Hartsfield (or anywhere else for that matter), so I have no other reason to dislike them. For the time being, at least

[ The Atlanta Journal-Constitution: 9/19/03 ]

JetBlue gave passenger records to defense contractor

The Associated Press

NEW YORK -- Violating its own privacy policy, JetBlue Airways gave 5 million passenger itineraries to a Defense Department contractor that used the information as part of a study seeking ways to identify "high risk" airline customers.

The study, produced by Torch Concepts of Huntsville, Ala., was titled "Homeland Security: Airline Passenger Risk Assessment" and was intended to be a proof-of-concept analysis for a project on military base security.

"This was a mistake on our part," JetBlue chief executive David Neeleman said in an apologetic e-mail sent to angry customers.

Neeleman insisted the data JetBlue provided was not shared with any government agency and that Torch has since destroyed the passenger records. New York-based JetBlue said it has taken steps so the situation will not happen again.

Details of the study and JetBlue's involvement were reported online Thursday by Wired magazine, which credited privacy activist Bill Scannell for bringing attention to the issue on his Web site, Don't Spy On.Us.

The Transportation Security Administration, the federal agency in charge of airline and airport security, said Friday it was not involved in the study.

Torch contacted the TSA last summer for airline industry contacts and the agency complied with the request, but "that was the extent of our involvement," TSA spokesman Nico Melendez said.

The Torch study analyzed the records JetBlue provided in September 2002, as well as other demographic data collected about the passengers, including Social Security numbers and information about their finances and families.

The apparent goal of the study, which was presented at a technology conference in February, was to determine the usefulness of combining passengers' travel and personal information in order to create a profiling system that would make air travel more safe.

One conclusion of the study was that "data elements have been identified which best distinguish normal JetBlue passengers from past terrorists."

Neeleman's e-mail said Torch "developed this information into a presentation, without JetBlue's knowledge, for a Department of Homeland Security symposium" and that he was "deeply dismayed to learn of it."

Neeleman said JetBlue provided passengers' names, addresses and phone numbers to Torch after an "exceptional request from the Department of Defense to assist their contractor, Torch Concepts, with a project regarding military base security."

Torch referred calls to its attorney, Richard Marsden, who did not immediately return a call seeking comment.

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And this is exactly why JetBlue doesn't go head-to-head with AirTran, much like AirTran doesn't go head to head with Southwest very much. There's really room for all three, not to mention Frontier.

This is an excerpt from an AJC article covering the fare competition between AirTran, JetBlue, and Delta in the Atlanta to California segment:

The airlines' battle for the Bay Area follows heated competition this summer for another California route.

JetBlue entered the Atlanta market in the spring with three daily flights to the Los Angeles suburb of Long Beach, and AirTran followed with new service to Los Angeles. Delta matched their fares, added flights and offered bonus frequent-flier miles.

JetBlue now has cut back to one Long Beach flight, conceding that the cutback was partly because of competition.

JetBlue decided to enter the Bay Area in part because many of its customers from Atlanta to Los Angeles were continuing on to the area, said spokeswoman Fiona Morrisson.

Although JetBlue's well-known amenities include leather seats and in-flight TV, those 6 a.m. departures and red-eye returns "make for groggy business travelers," says Atlanta business travel consultant Chris McGinnis

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While I'm not necessarily against the big boys, per se, I'm more concerned that the discounters stay healthy (and safe!) to keep airfares reasonable in ALL markets. I fly Delta to wherever AirTran doesn't fly, and I'll continue to do so because I don't suspect AirTran will ever fly a 777 non-stop to Tokyo. So I don't actually want them to go out of business, I just want them to have to stay on their toes. Here's another excerpt from that same AJC article where the writer expresses those very same concerns:

Although JetBlue's well-known amenities include leather seats and in-flight TV, those 6 a.m. departures and red-eye returns "make for groggy business travelers," says Atlanta business travel consultant Chris McGinnis.

Delta offers many more flight choices, he notes. But he cautions readers of his travel newsletter, The Ticket, that "if you only fly Delta and competitors bow out, those $2,000 round trips won't be far behind."

And we can never accept that sort of limitation again

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Here's a recent article discussing that very topic:

[ The Atlanta Journal-Constitution: 10/5/03 ]

Analyst: Low-cost carriers a growing threat to big airlines

Staff report

The challenge posed to Delta and other big airlines by low-cost discounters is accelerating, an analyst says.

Low-cost carriers will have at least 1,030 aircraft by 2006, up from 776 today, JP Morgan airline analyst Jamie Baker said in a report Friday. He predicts discounters such as AirTran, Southwest, Frontier and JetBlue will account for 40 percent of domestic operations.

"These are alarming statistics for (hub-and-spoke carriers') shareholders, in our view," he wrote.

Baker said big airlines cannot take too much comfort from experience. While big carriers fended off some upstart discounters and rebounded smartly from a slump in the early '90s, today's low-cost rivals are bigger and stronger, he noted.

"Remember Markair and Kiwi? These weren't exactly the JetBlues of their time," he wrote. The rise of Internet booking and corporate travel cutbacks have aided discounters' recent growth, making them "many consumers' first choice when it comes to air travel." He said this has "decimated" the pricing power of big airlines, which must match lower fares on more and more routes.

Baker initiated coverage of three discounters' stocks, including AirTran. He predicts an intensifying dogfight between Delta and AirTran as the latter adds new longer-range planes, although he notes that AirTran is branching out from its Atlanta hub and now derives less than half its revenue from Atlanta nonstops.