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January 16, 2012

JetBlue CEO Says American Bankruptcy is Evolutionary, Travelers Need Education On Costs

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In an interview broadcast on Bloomberg Television on Monday, JetBlue Airways CEO David Barger said the bankruptcy of AMR and potential consolidation of American Airlines into another carrier was an “evolution” that is “good for our industry.”

Barger also said that consolidation brought about by a merger with Delta or US Airways would likely lead to a decrease in capacity and an increase in fares which would be good for the industry as a whole. He suggested that passengers need to be educated on the actual costs involved in a trip — in which 30% to 40% goes toward fuel — and how airlines need to be able to cover those costs through ticket prices.

“I think fares going higher, consumers sharing in the cost of energy, that’s not a bad thing,” Barger said. “They’re seeing it at the pumps, why not with the aviation tickets?”

Asked about JetBlue’s growth strategy, Barger said it would continue to be organic (i.e. they’re not interested in buying American or anyone else) and that the airline’s main focus is to continue expanding in Latin America, as well as in Boston.

He also talked up the advantages of the new satellite-based broadband WiFi product coming to JetBlue beginning in the fourth quarter of this year. “People love live,” Barger said. “And here’s the difference, because it’s ground-based. It’s really not for the most part satellite based. And so it’s slower. It grinds. And if you want to download something, you know, a large volume type of a product, you can’t do it on the airplane. So we’re really excited.”

Barger also noted optimism about the resurgence of the US economy.



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