JetBlue zeroes in on profitability

NEW YORK — Onetime Mormon missionary David Neeleman had hoped to spend 2006 spreading the gospel of JetBlue, especially in America's heartland, where his airline's popular brand of high-style, low-cost, low-fare service remains largely unknown.

But for Neeleman, a Utah native who is the founder and CEO of the United States' fastest-growing airline, the focus has changed. For the first time since its wildly successful initial public offering in 2002, JetBlue lost money during a quarter.

It was a surprisingly large, $42 million loss in the October-December period, the result of high fuel prices, low fares and a slow upward creep in the operating costs of the 6-year-old carrier. The fourth-quarter loss pushed the discounter $20.3 million into the red for all of 2005. The company expects to lose more money in 2006.

What may have been met with a shrug at most other U.S. airlines, where losses have become the norm, has been a wake-up call at JetBlue headquarters. Instead of personally spreading the good news about JetBlue, Neeleman's top priority now is getting an additional $5 or $10 per trip out of the average JetBlue customer's pocket — the difference, he says, between profit and loss for the airline.

If Neeleman and the industry veterans who helped him create JetBlue's early success can't get the airline back in the black by 2007, plans for the airline's aggressive growth may have to be scaled back, and JetBlue could become just another struggling airline.

In an interview, Neeleman said, for now, he'll be "just focusing on revenue."

"I'd love to go talk to the Harvard Club. I love doing charity work," he says. "But the biggest responsibility I have . . . is making sure that we can get an extra $5 or $10 a ticket."

Exactly how Neeleman and his airline bump up the revenue sufficiently to regain a profit remains unclear. JetBlue has to do it in the face of fierce price competition. And it has to do it at no cost to its image as a unique airline that provides a great travel experience to an almost fanatical base of customers who view low fares as part of the deal.

But Neeleman insists it can be done by selling fewer seats at the deepest discount price and by a smart growth plan that puts the right-size aircraft on the right new route.

Neeleman says JetBlue will stay on track to add eight to 10 cities to its network this year, mostly in the nation's heartland. He also remains committed to the carrier's plan to grow aggressively — 25 percent to 30 percent a year through the rest of this decade.