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JetBlue's Move to Orlando May Be Gambit

JetBlue Airways CEO Dave Barger announced that his company is debating leaving its Queens, N.Y. headquarters and jetting off to Orlando, Fla. It's plausible enough, the airline does have flight-training centers and holds employee orientations there. However, the announcement caused a huge buzz in New York, probably bigger than the one created in Orlando.

"I've spoken with JetBlue and expressed that the state and city's offer is very strong," Senator Charles Schumer, D-NY told Bloomberg News in an e-mail. "JetBlue is New York's hometown airline and this is one time we don't want them to take off."

About 800 jobs are at stake, along with a major carrier, and both states want the airline, something not lost on JetBlue's Barger. The New York lease is up in 2012 and its financial center lease in Darien, Conn. ends next year. (Connecticut has a lot of incentives, so I'm less sure that anything will be moved from there.)

Barger met with Florida Gov. Charlie Crist Tuesday night and stayed for an impromptu press conference outside the Governor's Mansion. Barger stated he's looking at Orlando, "arguably one of the greatest airports in the world." He also said that cost would be the deciding factor, that JetBlue is awesome, etc.

But the most interesting part of his short speech was something that didn't seem aimed at the Florida media -- how JetBlue is the largest domestic carrier at John F. Kennedy International Airport and its "history" there (think tear falling down cheek) is also important.

It was an obvious nudge to New York to hurry and make some concessions and create incentives to keep JetBlue's business. In all fairness, JetBlue has said its New York headquarters has been problematic. It's central to its quarterly report risk factors:


We are highly dependent on the New York metropolitan market where we maintain a large presence with approximately two-thirds of our daily flights having JFK, LaGuardia, Newark, Westchester County Airport or Newburgh's Stewart International Airport as either their origin or destination. We have experienced an increase in flight delays and cancellations at JFK due to airport congestion, which has adversely affected our operating performance and results of operations. Our business could be further harmed by an increase in the amount of direct competition we face in the New York metropolitan market or by continued or increased congestion, delays or cancellations. Our business would also be harmed by any circumstances causing a reduction in demand for air transportation in the New York metropolitan area, such as adverse changes in local economic conditions, negative public perception of New York City, terrorist attacks or significant price increases linked to increases in airport access costs and fees imposed on passengers.

While I'm not in favor of states warring with each other to make sure corporations never pay their fair share of taxes or fees, it I were a CEO I'd be playing both sides just like Barger. At the end of it all, he gets to bring the two best offers to the board and his work is done.

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