Alaska Air and JetBlue: US value airlines reposition

Premium Analysis

The roll-out of basic economy fare options by the US major global network carriers and the effects of those new pricing structures on ULCCs has been a dominant theme in the country's aviation business during the past couple of years.

One question arising from the debut of the major airlines' basic economy fares is where the new pricing structures leave value airlines such as Alaska Air Group and JetBlue Airways on the competitive spectrum. Those airlines do not have the network breadth of the majors, nor the cost structures of ULCCs.

But both Alaska and JetBlue have moved to carve out their place in the US market during recent years: Alaska through its merger with Virgin America, and JetBlue with its focus city strategy and the introduction of its successful premium product Mint.

For Alaska, it will take some time for the Virgin America acquisition to bear fruit. JetBlue, meanwhile, is still evaluating a major move into the long haul, low cost trans-Atlantic market. But a pertinent question for those value airlines is their appropriate size in the US market as ultra discounters continue growing their share.

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