JetBlue Airways was a breath of fresh air when it launched two decades ago, but it may need a new niche to stay competitive. The airline finds itself in an increasingly vulnerable position in the middle of the U.S. market, wedged between the three global network carriers and the fast-growing ultra-low-cost carrier (ULCC) sector. Airlines in this middle swath of the market-notably JetBlue and Alaska Airlines-lack the scale to match the full-service airlines' networks and schedules as well as the low-cost structures needed to go head-to-head with ULCCs. Competition from ULCCs continues to intensify in the U.S., and the combination of new entrants such as Breeze Airways and Avelo Airlines-along with the growing popularity of the no-frills business model-spells risk for JetBlue in coming years. The pending combination of Frontier Airlines and Spirit Airlines makes this situation even worse by creating a mega-ULCC larger than JetBlue and with greater geographic reach.
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