Oct. 6--Lower airfares to Florida are likely to woo an additional million passengers a year to Newark Liberty International Airport within two years, thanks to JetBlue, the airport's top administrator said Wednesday.
"That is based on an assumption that other carriers will compete and lower their fares," said Anthony Coscia, chairman of the Port Authority of New York and New Jersey.
Jet Blue on Wednesday began service from Newark to Florida. Continental, which dominates the nonstop-to-Florida market at Newark, has already lowered its Florida fares to match those offered by the fast-growing, low-cost carrier based in Forest Hills, N.Y.
"Our analysis is that within the first year we will see an additional 250,000 passengers," said Coscia.
That number is expected to increase to 1 million over the following 12 months, or by the fall of 2007, he said. Not all will be JetBlue customers. Airlines that match fares will see traffic increase, too.
The impact of the introduction of serious low-cost competition is well documented. At Philadelphia International, for instance, the Department of Transportation found that almost immediately after low-cost carrier Southwest Airlines launched service last year to six cities, fares fell 27 percent on average and traffic rose more than 15 percent.
Fares have come down at Newark, thanks to low-fare competition in some markets from ATA and America West, and other discount carriers at the airports across the Hudson River. But without strong competition to South Florida, one of the most popular destinations for New Jersey vacationers, Newark averaged more than 20 percent higher fares than the average for all three New York metro-area airports, according to data provided by Back Aviation Solutions.
JetBlue, with a low-cost, low-fare business model similar to Southwest's, now flies out of all three major New York metro-area airports. It made its first two flights from Newark on Wednesday to Fort Lauderdale and Orlando. Later this month daily flights to West Palm Beach, Tampa and Fort Myers are scheduled to begin from Newark. In November the upstart carrier, which made its debut in 2000 at JFK, will add daily flights from Newark to San Juan, Puerto Rico.
Port Authority officials expect the new passengers that will be drawn to Newark by lower fares to Florida and Puerto Rico will include travelers who in the past might have opted to drive to other airports for bargain fares, and those who might have opted not to fly at all.
The Port Authority is planning hundreds of millions of dollars in renovations at Terminals A and B in the coming years to meet anticipated increased demand, attributed in part to the increased availability of low fares.
In an interview last week, JetBlue CEO David Neeleman downplayed his expansion plans at Newark, where his company has leased two gates in Terminal A and has an option on rights to a third.
He said that gate space is hard to come by, and his management team is "well aware that Newark is Continental's airport."
He said the airline may consider offering flights to the West Coast from Newark during the summer when Florida travel slows, but so far there are no plans for West Coast routes from Newark.
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