How the JetBlue Shuttle to Boston is Like Dell’s Move Into Servers

Joel Spolsky:

JetBlue launching a shuttle between New York and Boston is a brilliant move, for subtle reasons. It’s not really that they need a share of the NY-Boston market, although that would be nice. It’s not that they want to strengthen their JFK hub by feeding in passengers from Boston, although that would be nice, too.

Here’s my theory. They’re launching this because Delta and USAir consistently make huge profits from the Boston shuttle … profits which subsidize their other loss-making routes. By forcing down prices in the shuttle market, eliminating those excess profits for their competitors, they’re going to make it harder for those airlines to accept losses on other routes elsewhere which compete with JetBlue.