JetBlue and Virgin America create interesting dynamics for the hybrid business model in the US

Although JetBlue and Virgin America both recorded slides in their passenger unit revenue during 3Q2015, the trend of each airline outperforming their US peers continued. They remain shielded from major factors driving down the performance of American, Delta and United - foreign exchange pressure and higher exposure to weaker global economies.

Virgin America, which has been affected by the pricing pressure in Dallas and competitive challenges in the New York transcontinental market, believes that pricing could start to firm up in those markets in 2016 as higher industry capacity growth in those regions begins to moderate. JetBlue holds a similarly positive outlook, highlighting a rebound in demand after experiencing some softness in Sep-2015.

Both airlines are forecasting higher capacity growth in 2016 than the large global US network airlines even as some yield softness has crept into more domestic markets. For now JetBlue and Virgin America remain comfortable with their growth forecasts, and believe they can maintain their advantage in unit revenue performance.