JetBlue bucks industry trend, has expansion plans for Logan Airport

Airline sees opportunities in charter flight market

At a time when the airline industry is scaling back, JetBlue Airways Corp. plans to add employees and more frequent flights at Logan International Airport.

JetBlue, which is the second-largest carrier at Logan, behind American Airlines Inc., said Boston is one of the three most important cities in its growth strategy, centered around attracting more business travelers and contracts for charter flights to transport teams, companies, and other groups.

"We're looking for growth in 2009 - to add 100 or so new pilots, 100 or so flight attendants, 100 or so crew" members who handle ticket counters, gates, and luggage, said Jim Celeste, JetBlue's general manager at Logan.

Airline analysts say expanding in Boston is a savvy move for JetBlue, which offers 26 nonstop routes from Logan, the most of any carrier. The Hub is already JetBlue's second-largest city, behind New York based on the 3.73 million passengers it flew from September 2007 to August 2008.

"Their growth reflects filling in gaps in routes that other airlines have stopped serving or are no longer serving as well as they could be," said Henry H. Harteveldt, principal airline analyst for Forrester Research Inc. "It's very opportunistic and at the same time very carefully planned."

JetBlue hasn't been insulated from volatile fuel prices that are forcing other carriers to retrench at Logan and nationwide. In the past six months, JetBlue eliminated three Boston nonstop routes. But other major carriers at Logan cut more: Delta pulled out of eight routes, and American and US Airways each chopped about 10 percent of their October seat capacity.

Still, Boston has been spared from JetBlue's deeper cost-cutting. The airline industry is reducing fourth-quarter seat capacity in Boston 7.9 percent, compared to the same period last year, while JetBlue is increasing its available seats 1 percent during the same period. And last week, the carrier said it will launch Saturday service between Boston and St. Maarten in the Netherlands Antilles on Feb. 14.

"At the end of the day, Logan works well from air traffic control and it's a user-friendly airport," David Barger, JetBlue's chief executive, told the Globe recently.

As a result, JetBlue plans to continue to grow in Boston, Barger and eight senior executives told local employees this month in Boston at a "pocket session" - a nationally roving, quarterly meeting in which JetBlue employees can ask the New York-based top brass anything.

Executives said the carrier will chase lucrative business travelers by expanding in-flight wireless Internet access from one aircraft to the rest of the fleet next year, revamping the frequent-flier program in the first half of 2009, better publicizing refundable fares, one-way tickets, and extra legroom, and offering more frequent Boston flights.

"The business customers are saying, 'Give me at least three a day, or four a day, or five a day,' " Barger said. "I look at the future of Boston as one of greater frequency" of flights.

He also sees a chance for additional revenue by putting JetBlue's aircraft to use during seasonal dry spells in demand. Just as Delta carries the Red Sox, JetBlue could one day be "flying the Bruins or the Celtics" or college football teams, Barger said.

JetBlue ramped up its charter concept this year and scored about 80 charter flights this month alone, including ones carrying Republican vice presidential candidate Sarah Palin and her entourage. The carrier said its nascent charter operations have revolved around New York, but Boston would be a good place to branch out.

"Boston's been great from the standpoint of the colleges and universities. Then you start talking about the sports teams and their needs. Then the businesses," Barger said. "This is a really good landscape from the standpoint of charters."

Pursuing the charter business is a smart way for airlines to capture more revenue, say some industry analysts, especially since it can flourish even when fuel prices skyrocket.

That represents a big opportunity for JetBlue since charters only account for 0.18 percent of its total revenue, compared with 0.41 percent of Delta's and 0.57 percent of Northwest Airlines Corp.'s total revenue, according to aviation consultant SH&E Inc.

"That is a very valuable piece of business," said Terry Trippler, an airline consultant who operated two charter airlines in the 1970s. "You can write a charter contract based on fuel. If the fuel is higher, then the price will go up accordingly, so you have that protection."

Nicole C. Wong can be reached at nwong@globe.com.