The aviation industry can be the most unforgiving at times. Wafer thin margins on a capital-intensive industry, external factors always snapping away, fickle consumer demand and powerful competition makes for a tough environment that only a select few can withstand. Clever marketing, network coverage, strategic partnerships, brand loyalty and great products are all created to give airlines a competitive edge. While some achieve success, others get caught in “no man’s land”, struggling to break out of what appears to be a circle of ever-increasing issues. It feels like JetBlue may be in just that position.

An Innovative Start-Up

JetBlue launched in February 2000 as a fresh, exciting low-cost airline offering service levels that competed with the major US legacy airlines. They quickly earned a reputation for great service and being different in a tired market. Admired by many, the airline grew rapidly (as the chart below shows) offering 44.5 million seats in the peak years of 2019 and 2023 before capacity cuts in recent years have eased capacity back to just over 40 million seats in 2025.

JetBlue has always been a market ‘challenger’, offering value adds and pioneering in-flight services, all while being perceived as a value-for-money carrier. And, unlike other low-cost airlines, JetBlue evolved into a more hybrid model over time. Key developments in this evolution included:

• Introduction of Mint – a business class product
• Securing codeshares and full interline partnerships
• Launch of ’JetBlue True Blue’ frequent traveller programme
• Implementation of a co-branded credit card programme

Each of these additions gradually pulled the airline further away from its roots, adding costs and complexity to the business.

Reflective of the direction of travel for JetBlue is a financial performance that continues to worry analysts, with the 2024 results showing significant deterioration compared to the previous year. And with concerns already expressed by the CEO regarding 2025’s results, while other airlines are making money, JetBlue can’t quite make it happen.

A Network of Intense Competition  

The US domestic market is one of the fiercest, making survival particularly challenging. Both network breadth and market size can be crucial, although operating a large network of routes with low average frequency can lead to too much fragmentation; it really is a fine balancing act. The network maps below show how much capacity JetBlue has placed in each state this year.

For JetBlue, some 60% of its capacity is allocated to New York and Florida, with the airline operating a network heavily skewed towards the East Coast. The significant reliance on these two states makes for a challenging market, as all major legacy and low-cost carriers are competing for every passenger in these key markets.

The second capacity map shows that other very large markets such as California and Texas are now relatively small parts of the JetBlue network with 5% of JetBlue’s capacity allocated to California and Texas - a virtually unserved state with less than 200,000 seats allocated for 2025. In 2017, JetBlue operated some five million seats from California, equating to nearly 12% of the airline’s capacity with 23 routes dropped in the last two years, including Las Vegas – Long Beach and Long Beach – Oakland. JetBlue made significant capacity cutbacks from the California market citing the unprofitable network, however consolidation back to the East Coast has yet to secure a return on performance in the domestic market to date.

Part of the change in domestic structure from JetBlue was to support expansion into international markets, with 21% of capacity in 2025 allocated to such routes compared to 14% in 2017. Services from the East Coast to the Caribbean are important contributors to the network, but services to markets such as London, Paris, Amsterdam and Vancouver are probably still marginal on a year-round basis given the degree of competition. Taking the London Heathrow – New York market as an example, JetBlue will have a 4% share of all capacity making it the smallest operator in the market where they compete against all three airline alliances and their respective joint venture operations; making such a position profitable is tough.

A Mixed Operating Fleet Isn’t a Low-Cost Norm

One of the first ingredients to a successful low-cost airline is a common operating fleet; the simplicity of the fleet equates to the lowest possible operating costs. JetBlue’s mixed fleet network began in 2005 when the first of their Embraers arrived and today some 24 of those are reported as inactive with the airline. Today, the airline operates a three-fleet programme consisting of approx. 220 A320s, 45 A220s and 12 ERJ170s. While perhaps “right sizing” capacity to market size adds a level of complexity to the operation, forcing the carrier to carry more cost than is perhaps ideal for the way the market is heading.

The combination of all these factors strategically places JetBlue in probably a unique position in the US market, and in a softening market that position may not be the most desirable from which to rebuild profitability.

Avoid The “Hybrid” Space at All Costs

For JetBlue each of those individual product elements may not seem significant, but roll them all up into one and the airline has entered the mid-market world between the low-cost and legacy carriers; a space that is both difficult to defend from the LCC competition and difficult to compete with the full-service carriers. Once popular, the term hybrid is increasingly code for not being sure what we are or what we do. JetBlue is at risk, or indeed may have already fallen into what feels like the black hole of a mid-market position where they are neither a legacy carrier with its attendant strengths or a low-cost carrier with an obsession on costs.

Falling into such a space is not new in the airline industry and many others have been there and continue to operate, while others have sadly failed or been acquired by larger operators able to drag them out of that position through radical reorganisation. Unfortunately for JetBlue, many of those that continue to operate in this space are state-owned entities regularly supported by additional funding from their governments, whereas JetBlue is, of course, driven by creating shareholder value with additional funding harder to secure.

Where Next for JetBlue?

No one likes to see an airline struggling, especially when it has built such a strong brand with a lot of consumer loyalty. Equally, there are few industries as tough as the aviation sector and while new strategic partnerships may provide some hope, the reality is that a radical re-position and move in one direction or other is probably what’s required for the airline to work its way through the current challenges. And even then, aligning that repositioning to a rapidly changing domestic market will need to carry the support of those loyal JetBlue passengers who have used the airline for years.

I for one hope JetBlue make it; they’ve always been on-time and offered great service and value when I’ve used them, and hopefully that will be the case in the coming years in whatever shape or form they operate.