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JetBlue Consider's Deferring Deliveries  
User currently offlinePanAm_DC10 From Australia, joined Aug 2000, 4211 posts, RR: 89
Posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 6009 times:
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NEW YORK, March 8 (Reuters) - JetBlue Airways Corp. would consider deferring deliveries of some aircraft or issuing new equity as it seeks to keep its debt under control, its chief executive said on Wednesday.

"We're going to look at (slowing deliveries) very seriously as we look at our routes and where the capability is and where the substantial profitability (is)," David Neeleman, the airline's founder, said at an investor conference. He said the airline, which is forecasting a full-year loss, would also consider selling new shares as it seeks to keep its debt at no more than 75 percent of its total capital.

If the New York-based airline did delay deliveries of aircraft it has on order from Airbus or Embraer , it would be a significant retreat from the aggressive growth strategy the airline has pursued so far.

Neeleman said that given strong demand from airlines elsewhere for both of JetBlue's mainstay planes, the Airbus A320 and the smaller Embraer E-190, it would be easy to defer the planned deliveries. "One of the advantages we have is that we have airplanes that are very desirable on the world market," he said.

The airline is slated to take delivery of 17 A320s this year and 17 next, and 18 E-190s in each of 2006 and 2007, boosting its fleet to 162 planes from 92 at the end of 2005.


[ END - http://www.reuters.com Fair use excerpt ]

Has anyone heard any more on this and is it likely to impact on the Jungle Jets more so than the A320s. Any further info would be appreciated

Regards, PanAm_DC10


Ask the impossible to achieve the best possible
28 replies: All unread, showing first 25:
 
User currently offlineAirTran737 From United States of America, joined Apr 2004, 3705 posts, RR: 12
Reply 1, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5987 times:
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Wow. At least they're being pro-active and trying to get this under control before it's too late.


Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 2, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5987 times:
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Quoting PanAm_DC10 (Thread starter):
Has anyone heard any more on this and is it likely to impact on the Jungle Jets more so than the A320s

Care to explain as they have no jungle jets?



You can cut the irony with a knife
User currently offlineTinPusher007 From United States of America, joined Feb 2005, 982 posts, RR: 1
Reply 3, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5968 times:

Quoting Luv2fly (Reply 2):
Care to explain as they have no jungle jets?

The E-190's. Embraer jets have come to be affectionately known as jungle jets as they are manufactured in Brazil. It doesn't just apply to the 134/145's



"Flying isn't inherently dangerous...but very unforgiving of carelessness, incapacity or neglect."
User currently offlineAirzim From Zimbabwe, joined Jun 2001, 1226 posts, RR: 1
Reply 4, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5932 times:

Boy I can't wait to see how the smurfs spin this!

User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 3012 posts, RR: 14
Reply 5, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5932 times:

I listened to the press conference in which this was brought up by Neeleman. This was not what was said.

Neeleman said that JetBlue has the option of deferring deliveries. However, what JetBlue is "seriously considering" is selling some of its planes as they become older. He pointed out that the E190 and A320 lines are maxxed out for the several next years, and therefore those aircraft are of high value. He cited growth of the airline industry in China and India, but no specifics.

Overall, I wouldn't take this to mean much at all. JetBlue is simply looking at all of its possibilities. I seriously do not see any slowing of growth.

Neeleman also pointed out that new E190 routes will be announced very soon. The E190s will be flying shorter routes as of now because it is more efficient on such routes, according to Neeleman.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineMd95 From Italy, joined Apr 2005, 104 posts, RR: 0
Reply 6, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5882 times:

Quoting JetBluefan1 (Reply 5):
However, what JetBlue is "seriously considering" is selling some of its planes as they become older.

And what do you call an action like this? I call it "fleet reduction" with the same effect of delaying delivery from AIB. I didn't know that Jet Blue was is the aircraft business



dario
User currently offlineANstar From United Kingdom, joined Nov 2003, 5304 posts, RR: 7
Reply 7, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5871 times:

Quoting JetBluefan1 (Reply 5):
Neeleman said that JetBlue has the option of deferring deliveries. However, what JetBlue is "seriously considering" is selling some of its planes as they become older. He pointed out that the E190 and A320 lines are maxxed out for the several next years, and therefore those aircraft are of high value. He cited growth of the airline industry in China and India, but no specifics.

Perhaps they may have a similar strategy as Ryanair.

Get new planes at a great price, build up the hours and sell them on after 5 years or so. That way they can keep MX costs down and depending on the initial discount with purchasing large numbers, probably wopuldn;t be to much out of pocket!


User currently offlineLuv2fly From United States of America, joined May 2003, 12148 posts, RR: 49
Reply 8, posted (8 years 8 months 3 weeks 5 days 17 hours ago) and read 5836 times:
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Quoting TinPusher007 (Reply 3):
The E-190's. Embraer jets have come to be affectionately known as jungle jets as they are manufactured in Brazil. It doesn't just apply to the 134/145's

Not totally true, the E135's and E145's are known as jungle jets the rest of the planes made by Embraer are actually considered mainline jets as that is what they are.



You can cut the irony with a knife
User currently offlineTimboflier215 From United Kingdom, joined May 2005, 1342 posts, RR: 1
Reply 9, posted (8 years 8 months 3 weeks 5 days 16 hours ago) and read 5836 times:

Quoting Md95 (Reply 6):
I call it "fleet reduction"

not if they are gettin new aircraft at a faster rate than they are selling old ones. its a different way of slowing growth without actually deferring deliveries.


User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 10, posted (8 years 8 months 3 weeks 5 days 16 hours ago) and read 5701 times:
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Yeah they'd still be growing, though at a slower rate than originally planned. It's damage control-- the industry is tough and jetBlue has no choice but the rethink the strategy.

Sounds smart to me..

JBLU


User currently offlineScottB From United States of America, joined Jul 2000, 6808 posts, RR: 32
Reply 11, posted (8 years 8 months 3 weeks 5 days 15 hours ago) and read 5585 times:

Quoting JetBluefan1 (Reply 5):
However, what JetBlue is "seriously considering" is selling some of its planes as they become older.

There is a bit of a risk (or a potential upside) in selling older A320's, though. The price JetBlue may be able to fetch for its older A320's may be lower or higher than the depreciated value currently on the books. If it's lower, they'd have to take one-time charges to account for the loss on the sale; conversely, if they fetch a higher price, they can record a one-time gain.

In any case, I suspect they'd prefer to do another equity offering at this point to help keep debt under control. They started out with a bunch of capital in part because they didn't want to have a huge debt load like most airline start-ups.


User currently offlineLightsaber From United States of America, joined Jan 2005, 13457 posts, RR: 100
Reply 12, posted (8 years 8 months 3 weeks 5 days 15 hours ago) and read 5488 times:
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Quoting JetBluefan1 (Reply 5):
I listened to the press conference in which this was brought up by Neeleman. This was not what was said.

As soon as I get home, I'll download it.

Quoting JetBluefan1 (Reply 5):
However, what JetBlue is "seriously considering" is selling some of its planes as they become older.

This makes sense to me. The original A320's supposidly weren't on financing (lease) terms as good as later purchases. So if letting them exit the fleet just before they're due for heavy MX makes sense. Do so!

And it keeps down the MX costs.  Wink

Quoting JetBluefan1 (Reply 5):
I seriously do not see any slowing of growth.

Maybe a little. Personally, I don't consider this a bad thing.

Quoting JetBluefan1 (Reply 5):
The E190s will be flying shorter routes as of now because it is more efficient on such routes, according to Neeleman.

 checkmark  Makes sense. Neeleman has been been dropping these hints for a long time.

Personally, B6 getting rid of a few older A320's doesn't phase me. I would like to see B6 grow faster, but if the business case suggests its better to circle the wagons and only grow by say 30 airframes a year... ok. Right now B6's credit rating needs to go up just one fraction of a notch to seriously lower their borrowing costs. If slowing growth in 2006, 2007, and maybe 2008 allows for B6 to raise their credit rating, that will add more money to the books than a few dozen aircraft.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineChrisNH From United States of America, joined Jun 1999, 4149 posts, RR: 2
Reply 13, posted (8 years 8 months 3 weeks 5 days 12 hours ago) and read 5249 times:

Aside from how 'desireable' A320s and 190s are, how likely is it that JetBlue's planes will be snatched up on the open market? Configured as they are with special features that other carriers may not want or care about, those planes probably have as much chance of going to the desert as they do to another carrier.

Chris in NH


User currently offlineTinPusher007 From United States of America, joined Feb 2005, 982 posts, RR: 1
Reply 14, posted (8 years 8 months 3 weeks 5 days 12 hours ago) and read 5149 times:

Quoting Luv2fly (Reply 8):
Not totally true, the E135's and E145's are known as jungle jets the rest of the planes made by Embraer are actually considered mainline jets as that is what they are.

I never considered jungle jets to mean regional jets, but I guess maybe you are correct as the E170-E190 are simply called Ejets...semantics if you ask me. The point is if someone says jungle jets to me, I know they are referring to Embraer jets and I would have thought Luv2fly knew that too without splitting hairs...such is A.net.



"Flying isn't inherently dangerous...but very unforgiving of carelessness, incapacity or neglect."
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17787 posts, RR: 46
Reply 15, posted (8 years 8 months 3 weeks 5 days 11 hours ago) and read 5028 times:

Quoting JetBluefan1 (Reply 5):
Overall, I wouldn't take this to mean much at all. JetBlue is simply looking at all of its possibilities. I seriously do not see any slowing of growth.

They still have a plane arriving every couple weeks, and fewer and fewer places to put them. AirTran, I'm talking to you too.

Quoting Luv2fly (Reply 8):
Not totally true, the E135's and E145's are known as jungle jets the rest of the planes made by Embraer are actually considered mainline jets as that is what they are.

Says who?



E pur si muove -Galileo
User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 16, posted (8 years 8 months 3 weeks 5 days 10 hours ago) and read 4932 times:
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Quoting ChrisNH (Reply 13):
Aside from how 'desireable' A320s and 190s are, how likely is it that JetBlue's planes will be snatched up on the open market? Configured as they are with special features that other carriers may not want or care about, those planes probably have as much chance of going to the desert as they do to another carrier.

I think the extra weight would be minimal, and if it is a problem, then the airlines can remove the equipment at little cost to them probably. As far as configuration, the airlines are bound to put their own interior in the planes anyway. All in all, the expense is probably far less than ordering a new plane, even if they need to make modificaitons.

JBLU


User currently onlineEA CO AS From United States of America, joined Nov 2001, 13705 posts, RR: 61
Reply 17, posted (8 years 8 months 3 weeks 5 days 8 hours ago) and read 4796 times:
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Quoting Luv2fly (Reply 8):
Quoting TinPusher007 (Reply 3):
The E-190's. Embraer jets have come to be affectionately known as jungle jets as they are manufactured in Brazil. It doesn't just apply to the 134/145's

Not totally true, the E135's and E145's are known as jungle jets the rest of the planes made by Embraer are actually considered mainline jets as that is what they are.

Pilots I know at carriers flying the E-190 actually DO refer to them as "Jungle Jets." As was mentioned, Embraer being a Brazilian manufacturer earned that moniker for the ERJs, but it now applies to their entire product line. The "E-Jets" moniker is what their marketing department is pushing, but the Jungle Jet name has stuck to their new products as well.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 18, posted (8 years 8 months 3 weeks 5 days 8 hours ago) and read 4781 times:

Quoting ChrisNH (Reply 13):
Aside from how 'desireable' A320s and 190s are, how likely is it that JetBlue's planes will be snatched up on the open market? Configured as they are with special features that other carriers may not want or care about, those planes probably have as much chance of going to the desert as they do to another carrier.

Chris in NH



Quoting JBLUA320 (Reply 16):
I think the extra weight would be minimal, and if it is a problem, then the airlines can remove the equipment at little cost to them probably. As far as configuration, the airlines are bound to put their own interior in the planes anyway. All in all, the expense is probably far less than ordering a new plane, even if they need to make modificaitons.

JBLU

Both of you are missing the big picture here on the IFE anyway. Remember that B6 owns LiveTV, so techincally they could offer a relatively good TV MX package as part of a sale of the A/C. It's the initial installation costing roughly $1M US an airframe that keeps alot of airlines away from installing the service. Since the satelittes are already attached to the airframe the only thing that would be needed would be the new seats.


User currently offlineLTU932 From Germany, joined Jan 2006, 13864 posts, RR: 50
Reply 19, posted (8 years 8 months 3 weeks 5 days 7 hours ago) and read 4619 times:

Quoting ANstar (Reply 7):
Perhaps they may have a similar strategy as Ryanair.

Get new planes at a great price, build up the hours and sell them on after 5 years or so.

That's not exclusively a practice done by FR. SQ does something similar as well.  Wink

Personally, it's great to see B6 take action before it's too late. Whatever they eventually come up, I'm confident it will keep them afloat for the longterm.


User currently offlineWillyj From United States of America, joined Oct 2005, 468 posts, RR: 0
Reply 20, posted (8 years 8 months 3 weeks 5 days 6 hours ago) and read 4471 times:

Quoting ChrisNH (Reply 13):
Aside from how 'desireable' A320s and 190s are, how likely is it that JetBlue's planes will be snatched up on the open market? Configured as they are with special features that other carriers may not want or care about, those planes probably have as much chance of going to the desert as they do to another carrier.


So scrapping the planes would bring in more money than selling them because they offer too many amenities? Doesn't make much sense to me. These aren't old planes, and whoever might potentially purchase them would have little trouble discarding the unwanted amenities.


User currently offlineEDDM From Germany, joined Feb 2005, 222 posts, RR: 0
Reply 21, posted (8 years 8 months 3 weeks 5 days 4 hours ago) and read 4210 times:

I met a guy at the airport (MUC) yesterday who was going to TLS to pick up an A320 for B6. So they're not deferring that one.  Smile

He said he'd go to MCO via YYR. Way cool.


User currently offlineChrisNH From United States of America, joined Jun 1999, 4149 posts, RR: 2
Reply 22, posted (8 years 8 months 3 weeks 5 days 2 hours ago) and read 3941 times:

Quoting Willyj (Reply 20):
So scrapping the planes would bring in more money than selling them because they offer too many amenities? Doesn't make much sense to me. These aren't old planes, and whoever might potentially purchase them would have little trouble discarding the unwanted amenities.

I guess my point is this: People ofteen have an inflated sense of what their home is worth. They put it on the market and realize--whoops!--people aren't willing to pay the asking price. Happens all the time, and at a time when the market is awash with available planes--in other words, a buyers' market--why wouldn't the same logic apply? All I'm saying is that it might be a bit optimistic to think that some other carrier is going to swoop in on a white horse and take all the planes that JetBlue may make available. That's why I said that there's as good a chance that they'd be heading to the desert as to some other airline.

Chris in NH


User currently offlinePanAm_DC10 From Australia, joined Aug 2000, 4211 posts, RR: 89
Reply 23, posted (8 years 8 months 3 weeks 5 days 2 hours ago) and read 3849 times:
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COMMUNITY MANAGER

Quoting Lightsaber (Reply 12):
Personally, B6 getting rid of a few older A320's doesn't phase me. I would like to see B6 grow faster, but if the business case suggests its better to circle the wagons and only grow by say 30 airframes a year... ok. Right now B6's credit rating needs to go up just one fraction of a notch to seriously lower their borrowing costs. If slowing growth in 2006, 2007, and maybe 2008 allows for B6 to raise their credit rating, that will add more money to the books than a few dozen aircraft

Well put Lightsaber the moreso given Mr Neeleman specifically mentioned that he was acting to protect their Credit Rating.

Regards, PanAm_DC10



Ask the impossible to achieve the best possible
User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 24, posted (8 years 8 months 3 weeks 5 days 1 hour ago) and read 3731 times:
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Quoting Flyibaby (Reply 18):

Both of you are missing the big picture here on the IFE anyway. Remember that B6 owns LiveTV, so techincally they could offer a relatively good TV MX package as part of a sale of the A/C. It's the initial installation costing roughly $1M US an airframe that keeps alot of airlines away from installing the service. Since the satelittes are already attached to the airframe the only thing that would be needed would be the new seats.

I think unless the airline already had PTVs across the rest of its fleet or was planning on getting them, they'd keep the configs consistent between planes because only a select few would have jetBlue's PTV accessability. Despite the price, I think the airline would put a consistent product first... It's not like jetBlue would be selling the entire fleet, just a few planes every now and then... Just my $0.02

JBLU


25 Post contains images Lightsaber : While true and I don't understand why more airlines aren't adopting it, the systems weight also has scared away a few airlines. How significant that
26 Post contains images PanAm_DC10 : It's late here sir, how about, all the more instead I believe that if IIRC B6 stated when they started operations that they would roll the fleet for
27 BigOrange : The only thing I've ever heard E-170's called is Wombles.
28 767-332ER : I actually am glad to hear this as it is proving that the industry (at least here in the U.S.) cannot sustain its current fare rates. When you have B6
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