Slovacek747 From , joined Dec 1969, posts, RR:
Reply 1, posted (9 years 6 months 3 weeks 6 days 13 hours ago) and read 10251 times:
It's hard to believe its already been that long since it began service... but yes like all airlines it has rising costs...I am sure they will continute to make a profit for a while longer but will eventually have to take measures to cut costs. Jetblue is a heck of an airline but it cant escape the natural business process.
Not necessarily. It's pretty simple: They can increase revenue. Though that in itself is not simple it could happen, either through adding other services and amenities and/or increasing fares.
If it should occur that one (or more) of the legacy carriers actually goes belly up, that is a good opportunity for jetBlue to raise their fares on certain routes. The same goes for other carriers as well, of course.
Even though for many people, it would be a big problem to see a legacy carrier go bankrupt, not in the least the people working there, it automatically improves the market for the remaining carriers, which will end up hiring many of the "lost" personnel, getting capacity up there to where it was with all the bankrupt carrier still operating but now at higher (and more profitable) price levels. And even though this may be "bad" for the consumer, it will be healthier for the airlines, which in the end is good for the consumer.
Wingman From Seychelles, joined May 1999, 2555 posts, RR: 5
Reply 3, posted (9 years 6 months 3 weeks 6 days 6 hours ago) and read 9436 times:
Well, I hope this is one airline that doesn't fail because they are a true pleasure to fly. Great planes, great service, and that comfortable interior with non-stop entertainment and treats. It really does put the majors to shame. They even put other LCC's to shame so I for one hope they continue to set the class standard and that others match them. I also hope someday for Jetblue International with 787's in all economy with nice wide seats, 32-33" of legroom and killer entertainment.
CactusA319 From United States of America, joined Jan 2000, 2918 posts, RR: 23
Reply 5, posted (9 years 6 months 3 weeks 6 days 5 hours ago) and read 9122 times:
This is no surprise. Anybody who follows the airline industry could see the cost increases were going to catch up with them eventually. This doesn't mean they'll go under though. They'll just have to find ways to increase revenue to cover costs, be it by fare increase, increased service in high-profit markets, or other means (read: fees).
N844AA From United States of America, joined Jul 2003, 1352 posts, RR: 1
Reply 6, posted (9 years 6 months 3 weeks 6 days 4 hours ago) and read 9050 times:
Quoting Frequentflyer (Reply 4): Totally agree with Wingman, B6 is an airline of a new flavor, and an elevated quality/price ratio, expecially is compared to AA or UA domestic.
In the context of this article, though, don't you think it's possible that an elevated quality/price ratio has been possible because of B6's relatively lower costs vis-a-vis the legacy/established carriers? With those costs now increasing -- indeed, with B6 running a loss in the most recent quarter (according to the article, anyway) -- it seems that something will eventually have to give.
Clearly B6 is a very well-run airline, and these increasing costs were undoubtedly contemplated long ago (though fuel prices may not have been -- I don't know how well hedged B6 is.) Still, as these costs continue to rise, it seems that at the very least the quality/price ratio must diminish.
New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
Lightsaber From United States of America, joined Jan 2005, 14263 posts, RR: 100
Reply 7, posted (9 years 6 months 3 weeks 6 days 2 hours ago) and read 8814 times:
Quoting CactusA319 (Reply 5): This is no surprise. Anybody who follows the airline industry could see the cost increases were going to catch up with them eventually.
??? I believe we're talking about a 0.25 CASM delta (excluding fuel). This isn't up to legacy levels by any means. B6 is flying E190's (known higher CASM, by about 1.0 cents), shorter routes (on average, this has higher CASM). Per last year's annual report, they were predicting a 0.24 cent higher CASM with MX, etc. Does anyone have a link on CASM?
Yes B6 will have a loss for quarter/year. Cest la vie.
Jumbojet From United States of America, joined Dec 2003, 1159 posts, RR: 0
Reply 9, posted (9 years 6 months 3 weeks 6 days 1 hour ago) and read 8369 times:
Quoting Wingman (Reply 3): Well, I hope this is one airline that doesn't fail because they are a true pleasure to fly. Great planes, great service, and that comfortable interior with non-stop entertainment and treats. It really does put the majors to shame.
The day will soon come when jetblue's fleet of planes will be considered old and worn out. Maybe not tomorrow, next week or next year but it is only a matter of time. It's also a matter of eventually cycling out the older planes of the legacies and when they one day take delivery of newer planes then JetBlue just might be the ones on the outside looking in.
CTHEWORLD From Mayotte, joined Dec 2004, 478 posts, RR: 2
Reply 10, posted (9 years 6 months 3 weeks 6 days ago) and read 8030 times:
Quoting Frequentflyer (Reply 4): pilots who try their best to be entertaining in their communication with pax.
Funny, I thought a pilot's job was to safely fly the plane from a-b. Also, their fleet will age, just like everyone else, their work groups will demand more money, some might even unionize. I am not saying that jetBlue is bad, they have done a great job establishing themselves and a brand, but the job of keeping their shine is going to get harder and harder, I hope they are up to it.
JetBluefan1 From United States of America, joined Dec 2003, 3103 posts, RR: 12
Reply 11, posted (9 years 6 months 3 weeks 5 days 23 hours ago) and read 7402 times:
I think the article, while making some good points, is not good at pointing out what has really been killing JetBlue (and all airlines) lately: jet fuel. If it weren't for the dramatic rise in fuel, B6 would have had profit growth on a year-over-year basis, which is a main way of determining analyst ratings, share prices, outlook (both near-term and long-term), etc.
I think that for an airline that is based out of the most competitive market in the U.S (NYC) and is growing at a time of extremely high fuel costs, B6 is doing just fine. They will be around for awhile.
Eyeonthesky17 From United States of America, joined Jun 2005, 95 posts, RR: 0
Reply 13, posted (9 years 6 months 3 weeks 5 days 22 hours ago) and read 7014 times:
Quoting Grbld (Reply 2): Even though for many people, it would be a big problem to see a legacy carrier go bankrupt, not in the least the people working there, it automatically improves the market for the remaining carriers, which will end up hiring many of the "lost" personnel, getting capacity up there to where it was with all the bankrupt carrier still operating but now at higher (and more profitable) price levels. And even though this may be "bad" for the consumer, it will be healthier for the airlines, which in the end is good for the consumer.
I couldn't agree more. While UA, DL, and NW have been offered huge protections in bankruptcy, we see a healthy airline like B6 fall on hard times due to fuel prices. It's criminal!!!!!
B6 will also have other problems as they reach maturation. While B6 costs and fares (most likely) continue to increase and become more in line with the legacy carriers, we'll see the corporate traveler move toward the old reliables. Mileage programs will always rule the day. B6 will need to reinvent their Blue Rewards program in order to successfully court and keep business travelers. These passengers should be viewed as a market of increasing importance to B6.
Last April I flew from JFK to AUA in J class on American. The family of six next to me did not pay a single penny for their tickets. The wife explained that her husband flew for business almost every 10 days, so his mileage paid for all tickets. It takes way too many trips to earn even one award ticket on B6.
Also, imo B6 will begin to run a disadvantage due to their lack of content in the GDS'. While GDS costs are definitely an issue, I think multiple distribution channels will become more and more important.
On a positive, if B6 can continue to portray themselves as the fresh and hip airline, they may be able to offset some of the upcoming hurdles. A liquidation of DL and/or NW woudln't be bad for them either.
Give it a few years and we'll be calling them a legacy carrier.
Ikramerica From United States of America, joined May 2005, 21909 posts, RR: 59
Reply 15, posted (9 years 6 months 3 weeks 5 days 22 hours ago) and read 6948 times:
Quoting Jumbojet (Reply 9): The day will soon come when jetblue's fleet of planes will be considered old and worn out. Maybe not tomorrow, next week or next year but it is only a matter of time.
I was going to mention that. It's great when an airline starts up with an all new fleet. But keeping that fleet "all new" gets harder and harder.
Worse, when you are the airline known for "innovative product" because you can introduce it from the getgo on a new fleet, all of a sudden, if you need to compete with the NEW "innovative" airline with an even better product coming online in all new planes, you all of a sudden must retrofit 100+ aircraft at great expense!
It's the same problem the legacies face by not being brand new. While B6 could just bring new jets online with PTV, a legacy would have to retrofit hundreds of planes. Now B6 will face the same challenge when the next "must have" amenity comes along.
WN avoids this by not bothering. They aren't the 'innovative' airline, just the low cost, low restriction airline with friendly staff. They avoid retrofit costs just by not bothering. The most they incurred was to put leather covers on their seats as they needed replacing. Not the same thing as putting DirecTV at every seat, or satellite radio, or power ports, or what have you.
B6's real test may come from Virgin America, should it get going as planned. That product will be even newer, likely with AVOD with movies and shows worth watching. Then we'll see what happens.
Quoting Frequentflyer (Reply 4): and pilots who try their best to be entertaining in their communication with pax.
I've always found jokey pilots or F/As to be extremely unprofessional and disconcerting. I want professionals in charge of my safety, not would be comedians. I see enough semi-talented hacks here in L.A.
Of all the things to worry about... the Wookie has no pants.
Bels13 From United States of America, joined Mar 2005, 18 posts, RR: 0
Reply 16, posted (9 years 6 months 3 weeks 5 days 21 hours ago) and read 6650 times:
First off, JetBlue from an employee stand point is not the best in the business. Actually, JetBlue is either the worst or very close to it. The reason, JetBlue wanted to cut costs on training employees so pretty much the training is a self study course and also after 5 years, you must re-interview for your job. This process has just begun. From a consumer standpoint, great, good service and other stuff, but ask yourself, if JetBlue provides good service, TV, nice seats and cheap fares, where do you think the cost cutting is? With its employees. LLC with service and great wages and work benefits and cheap fares don't mix.
Grbld From Netherlands, joined Dec 2005, 353 posts, RR: 2
Reply 19, posted (9 years 6 months 3 weeks 5 days 15 hours ago) and read 5407 times:
Quoting Bond007 (Reply 18): Isn't WN paying some of the highest salaries of any airlines ???
Absolutely. I think jetBlue is a bit on shaky ground by some of their personnel handling (like Bels13 is saying) where WN does an excellent job and has managed to keep it up for decades. Sure, you get your complaints every now and then but all in all, they still have one of the best customer service records in the world, and it's mostly because of how they handle their own personnel (which is very good).
A legacy carrier's modus operandi cannot change into a new format to challenge the low cost carriers. It requires out of the box thinking and is even harder than when starting with a whole new airline. Being a LCC doesn't depend solely on how much costs you can cut, because if you need to cut costs, you weren't doing well in the first place.
Being a LCC means that you're first of all smart with your money and resources. Which means that there are hardly any excess costs that can be cut in the future, but the necessity to cut won't be there as much either because you're running a healthier airline.
Virgin Atlantic, one of the best and luxurious airlines in the world, is a LCC. The pilots get about the same as at BA but the staff motivation is much higher and the product they offer, offers greater value for money than BA. That's what being a LCC is all about.
I don't see jetBlue's ageing fleet being a problem at all. Bringing in new jets for the foreseeable future will keep the average age down and it's relatively easy to get rid of your older planes for newer ones as well. My airline also has a very young fleet and as such is getting rid of its oldest 737NG and replacing it with a new one in the near future.
Lowecur From United States of America, joined Jan 2005, 585 posts, RR: 0
Reply 20, posted (9 years 6 months 3 weeks 5 days 13 hours ago) and read 4963 times:
GRBLD, you'd better bring yourself up to date. New pilot contract comes up in the fall. Section 6 has been put off, as SWAPA wanted the dust to settle a little on industry direction before negotiations. The airline has to make up $500M shortage from smaller fuel hedge income this year, and pilots are already grumbling about the first of two tests that reduce days off and increase productivity. It is my sense both of these tests will be voted down by SWAPA in contract negotiations, and I look for a protracted period of working without a contract as SWAPA and mgt go round n round trying to find common ground.
Adversarial relationships at SWA are not new. The FA's worked without a contract for 2 years and picketed on numerous occassions. This is not the SWAPA of 5 or 10 years ago. They have hired many disgruntled pilots from other airlines, and the last thing many of them want to hear is about is a reduction of pay or work rules.
GSPSPOT From United States of America, joined Sep 2003, 3274 posts, RR: 2
Reply 21, posted (9 years 6 months 3 weeks 5 days 12 hours ago) and read 4806 times:
If Legacies are cutting costs to emulate LCC's, then where do LCC's cut costs? Where does it end??? You can't CUT your way to success! You have to stand out with features and service customers want, and in the end, may be willing to pay a bit more for.
If you look at JetBlue's quarterly reports, you will see that their fuel neutral operating margin improved consistently. In other words, if fuel prices were the same in 2005 as in 2004, their operating margins would have been higher.
JetBluefan1 From United States of America, joined Dec 2003, 3103 posts, RR: 12
Reply 23, posted (9 years 6 months 3 weeks 5 days 11 hours ago) and read 4753 times:
Quoting Bels13 (Reply 16): From a consumer standpoint, great, good service and other stuff, but ask yourself, if JetBlue provides good service, TV, nice seats and cheap fares, where do you think the cost cutting is? With its employees.
While B6 is cutting costs for training, B6 Crew is still in good hands as they have not been asked for pay cuts. All legacies in the U.S have been cutting pay, most even multiple times. B6 has not seen a single paycut since inception. B6 and WN (and FL?) are the airlines that have realized that Crew Members are the absolute most important asset to the company and cutting paychecks isn't going to help the cause for better customer service.
I think that a change in training rules isn't much to complain about in today's industry. In fact, I definitely think it's a good idea to "reinterview" for your job. B6 management is very big on customer service and they want to make sure that those that they are signing paychecks to are doing the very best that they can. I think that's perfectly fair.
Also, keep in mind that pilots and flight attendants are both trained at the new facilities in MCO. Do they also have to reinterview too?
BTW, I know B6 offers paid training (unlike most other airlines). With the new rules, will they still be doing this?
Bond007 From United States of America, joined Mar 2005, 5630 posts, RR: 8
Reply 24, posted (9 years 6 months 3 weeks 5 days 11 hours ago) and read 4724 times:
Quoting JetBluefan1 (Reply 22): So, my point is that had fuel cost the same amount as a year before, B6 would have seen growth in margins (and profits). Fuel is obviously what's killing B6.
Flawed logic. You could say the same for ANY line of the P&L. If the operating costs were the same...if ...Landing Fees, Depreciation,A/C rent, Sales & Marketing, Maintenance, other ...you bet they all increased ... some by a bigger percentage than the fuel costs did.
I'd rather be on the ground wishing I was in the air, than in the air wishing I was on the ground!
: This is about as low as they come. There are in place already at every company employee performance evaluations. If an employee is not performing to
: I totally agree with Kellmark... What a slap in the face! Employers expect commitment from employees, but where, oh where is the commitment from emplo
: That may be, but when you start them out paying peanuts, you can't really reduce that much. I believe that DL's latest cuts to their pilots still kee
: If if if. Like I said, you are looking to find excuses. Read above. BINGO!!
: Every single US major carrier would have made profits if fuel prices had been the same as the year before. The problem was that they could not get th
: Well, that is a valid point, but there have also been airlines that start up with new aircraft and hand picking routes that go under, too. B6 has don
: So then jet blue can join the club with, lets see, EVERY OTHER AIRLINE! If it weren't for the rise in fuel costs, UA would have been hugely profitabl
: One of the very reason I will not fly WN, I would rather listen to a rhino give birth than listen to an F/A sing some song about Luv in the air over
: Where did this rumor of "B6 employees need to re-interview after 5 years" come from? I work for B6 and have never heard of this. You guys are silly if
: That's what I'd like to know too. I was simply referring to the flaws in the article. Never did I say that other airlines wouldn't have made money. H
: JetBluefan1 I understand what you are saying w/regard to jet blue, but you said: This is where I disagree. The lack of the ability to price their prod
: Tozairport, You certainly bring up an excellent point and I completely agree. So perhaps what's killing JetBlue (and all airlines) is its inability t
: All you 'proved' is that if a cost doesn't increase from year to year, and your revenue stays the same...you'll make the same profit. You can 'prove'
: Everyone is so worried about expenses. Jetblue's expenses are just fine and will be for sometime to come. The 190 is the key to future Jetblue profits
: That's wrong. Look at the reports yourself. A fuel-neutral margin simply means that if B6 was paying the same price for fuel that quarter as the same
: No, I assure you that's right ... where did you go to school? It's also a fact that on a 'maintenance-costs-neutral' basis, and a 'depreciation-neutr
: NYU...so don't try attacking my education lol In any case, if you listen to the reports themselves you will hear David Barger (or Neeleman) pointing