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JetBlue At HOU: Sale Based On Oil Price  
User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2988 posts, RR: 14
Posted (8 years 1 month 2 weeks 5 days 15 hours ago) and read 4720 times:

OK...this is one of the funniest things I've seen:

http://www.primezone.com/newsroom/news.html?d=103818

Basically, JetBlue is doing a sale for its new HOU flights from Aug 15-21. The fare will depend on the price of oil. Yesterday oil closed at $73, so the fare between JFK and HOU is $73 today. So say, if for example, oil closes at $70 today, then the sale fare tomorrow will be $70.

The sale fare is also available for connecting service to BUF, ROC, SYR, PWM, BTV, RIC, PIT and IAD.

The new sale fare will be announced everyday from now until the 21st.

I just have to say that this is one of the most unique things I've seen an airline do in terms of marketing sale fares. I definitely think that this will get them some attention in the Houston area - especially since the fares are so low - not to mention that the Houston area is big on refineries.

So what are your thoughts?

JetBluefan1

Edited: A press release will most likely not be released daily. We'll see.

[Edited 2006-08-15 15:27:59]


Most people on a.net hate JetBlue. Get used to it.
22 replies: All unread, jump to last
 
User currently offlineCentPIT From United States of America, joined Dec 2005, 990 posts, RR: 3
Reply 1, posted (8 years 1 month 2 weeks 5 days 15 hours ago) and read 4709 times:

Quoting JetBluefan1 (Thread starter):
just have to say that this is one of the most unique things I've seen an airline do in terms of marketing sale fares. I definitely think that this will get them some attention in the Houston area, especially since a new press release concerning the fare will be announced for seven days in a row - not to mention that the Houston area is big on refineries.

So what are your thoughts?

I have to agree, this is pretty cool! I hope it does get them some extra attention!!!



Pittsburgh International: US Airways---160 daily departures! (52 destinations)
User currently offlineLt-AWACS From , joined Dec 1969, posts, RR:
Reply 2, posted (8 years 1 month 2 weeks 5 days 14 hours ago) and read 4604 times:

Houston is the oil and energy capital of the world, so it makes sense, and its amusing Big grin

Ciao, and Hook 'em Horns,
Capt-AWACS, Does German Customs ever smile


User currently offlineIAHFLYR From United States of America, joined Jun 2005, 4790 posts, RR: 22
Reply 3, posted (8 years 1 month 2 weeks 5 days 12 hours ago) and read 4498 times:

Most creative.....so they are competing against who, WN to ISP and beyond and or CO from IAH to EWR and beyond?


Any views shared are strictly my own and do not a represent those of any former employer.
User currently offlinePanAm330 From United States of America, joined Mar 2004, 2682 posts, RR: 9
Reply 4, posted (8 years 1 month 2 weeks 5 days 12 hours ago) and read 4498 times:

Quite a clever scheme. Bravo to their marketing department.

User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 5, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4382 times:

Quoting JetBluefan1 (Thread starter):
Yesterday oil closed at $73, so the fare between JFK and HOU is $73 today. So say, if for example, oil closes at $70 today, then the sale fare tomorrow will be $70.



Quoting JetBluefan1 (Thread starter):
So what are your thoughts?

Um, I suppose it might work as a marketing gimmick, but $73 each way to and from Houston (or $80 or $70), especially with several connecting markets being sold at the same fare, seems to me like they're a bit desperate to fill the seats. There's no way that a $73 fare comes anywhere near to what jetBlue's costs are to fly the seat. On the connecting tickets, the passengers are essentially getting the leg from JFK to Houston for under $25, with typical advance purchase fares running around $50 for JFK-BUF/BOS/ROC/BTV/etc.

I'd be willing to bet that they're having trouble taking passengers away from CO (from all three NYC-area airports to IAH) and ATA (on LGA-HOU), so they're having to deeply discount these fares.


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17550 posts, RR: 46
Reply 6, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4361 times:

Quoting ScottB (Reply 5):
I'd be willing to bet that they're having trouble taking passengers away from CO (from all three NYC-area airports to IAH) and ATA (on LGA-HOU), so they're having to deeply discount these fares.

They're definitely up against very tough competition. I think CO has been successful in making their stay in EWR unpleasant, and the WN/TZ combination at HOU is not going to help. Good luck!



E pur si muove -Galileo
User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2988 posts, RR: 14
Reply 7, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4324 times:

Quoting ScottB (Reply 5):
but $73 each way to and from Houston (or $80 or $70), especially with several connecting markets being sold at the same fare, seems to me like they're a bit desperate to fill the seats.

I agree that the fare is pretty low, but the flights don't start until Sep. 7th - so I doubt that they have a good idea of how well the route will perform just yet. I'm willing to bet that there'll be a decent amount of 2-week advance (and less) purchases. Also keep in mind that this sale fare is only good for travel through November 15th, which is typically a very slow travel period.

Quoting ScottB (Reply 5):
On the connecting tickets, the passengers are essentially getting the leg from JFK to Houston for under $25, with typical advance purchase fares running around $50 for JFK-BUF/BOS/ROC/BTV/etc.

Actually, the fares between JFK-BUF/BOS/ROC/BTV start between $50 and $69 o/w (which further proves your point). However, once again - this is the fall travel period - and these planes aren't going to be completely full everyday like they are in June/July/August. I think JetBlue would rather carry someone HOU-JFK-BOS than not carry them at all as the passenger would be filling a seat that would otherwise go out empty.

Quoting MaverickM11 (Reply 6):
I think CO has been successful in making their stay in EWR unpleasant, and the WN/TZ combination at HOU is not going to help

CO at EWR is definitely going to be a factor, but JFK and EWR are different markets for the most part. As has been discussed in other threads, TZ is a no-name in NYC compared to B6. However, I think that they definitely have the upper-hand in Houston as they have the WN alliance. Nevertheless, I think this is why JetBlue is doing this marketing campaign - to get some recognition in Houston and to make a buzz.

Though there may be some losses to incur for a couple of months due to this sale fare, I think that in the long run it will really help as it'll get some Houstonians to check out JetBlue and will create some hype. Sometimes actions are taken for long-term benefit.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineGregtx From United States of America, joined Apr 2006, 216 posts, RR: 1
Reply 8, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4324 times:

Quoting JetBluefan1 (Thread starter):
So what are your thoughts?

I booked Continental to LaGuardia for Monday morning.
Sorry.....just gotta have a full service airline for biz.


User currently offlinePanAm330 From United States of America, joined Mar 2004, 2682 posts, RR: 9
Reply 9, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4307 times:

Quoting ScottB (Reply 5):
with typical advance purchase fares running around $50 for JFK-BUF/BOS/ROC/BTV/etc.

More like $69, which means that as of today I can get JFK-HOU for only $4 more. Sure, it's great for the consumer, but it's going to be a nightmare for the airline. I suppose they could get some local Houston traffic 'hooked' on them, but this is only going to spell red ink for a while.


User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 10, posted (8 years 1 month 2 weeks 5 days 10 hours ago) and read 4281 times:

Quoting JetBluefan1 (Reply 7):
I think JetBlue would rather carry someone HOU-JFK-BOS than not carry them at all as the passenger would be filling a seat that would otherwise go out empty.

I'm not sure that's a very good strategy, to be honest. If they sell a BUF-JFK-HOU ticket for $73, they only get $4 more than they might have for a $69 BUF-JFK ticket -- and the marginal cost of carrying one passenger from JFK to HOU is clearly over $4.

You can chalk it up to promotional loss leader fares, but aside from the normally-busy Thanksgiving and Christmas holidays, I don't see this route filling up until next summer, if then. If ATA adds a third LGA-HOU flight as rumored, that will make life even more difficult for B6, since ATA's costs are probably comparable or lower.


User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2988 posts, RR: 14
Reply 11, posted (8 years 1 month 2 weeks 5 days 9 hours ago) and read 4218 times:

Quoting ScottB (Reply 10):
I'm not sure that's a very good strategy, to be honest. If they sell a BUF-JFK-HOU ticket for $73, they only get $4 more than they might have for a $69 BUF-JFK ticket -- and the marginal cost of carrying one passenger from JFK to HOU is clearly over $4.

You're not keeping in mind that the months in which this sale is taking place - September, October and November - are the slowest travel months of the year. Chances are that the flights going to BUF aren't all going to be sold out. So would JetBlue rather take in $73 for flying someone BUF-JFK-HOU or $0 for flying no one?

Quoting ScottB (Reply 10):
but aside from the normally-busy Thanksgiving and Christmas holidays, I don't see this route filling up until next summer, if then

Those holidays as well as Columbus Day, Veterans' Day, Martin Luther King Jr., Presidents' Day, Easter, Passover, and Memorial Day - then the summer. But I get what you're saying - like most non-Florida routes, this one won't fill up much over the winter. But do keep in mind that Galveston traffic starts to pick up mid-March - not late May (like those California destinations) - and Houston is also more business-oriented than, say, Orlando.

I'm not saying that this is going to be a piece of cake for JetBlue, but I don't think that a $73 sale fare is going to hurt them all that much. The obvious positives are that it helps create a buzz in the Houston area and also fills up seats that would otherwise go out empty.

If the $73 sale fare was being offered over the Christmas holiday or during the summer, then there'd be something dramatically wrong with that. But considering that this is only available for travel between 9/7-11/15 and must be booked by 8/21, I don't think that it's as much of a big deal as some may think.

I just think that the marketing is very clever; that was the point of this thread.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 12, posted (8 years 1 month 2 weeks 5 days 8 hours ago) and read 4174 times:

Quoting JetBluefan1 (Reply 11):
But do keep in mind that Galveston traffic starts to pick up mid-March - not late May (like those California destinations) - and Houston is also more business-oriented than, say, Orlando.

Believe me, I know Galveston far better than you ever will. Thinking that tourism to Galveston from New York will fill planes is frankly laughable. Don't get me wrong; I like Galveston -- but it's not a driver of traffic to and from New York. The fact that Houston is a business-oriented destination is also a disadvantage to B6; CO offers more frequent flights to IAH from the more convenient NYC airport, LGA.

Quoting JetBluefan1 (Reply 11):
Those holidays as well as Columbus Day, Veterans' Day, Martin Luther King Jr., Presidents' Day, Easter, Passover, and Memorial Day

The deeply discounted fares are available for the Columbus Day weekend and for the Veterans' Day Weekend. Clearly they don't feel that they need to hold back capacity for holiday demand on the route.

Quoting JetBluefan1 (Reply 11):
You're not keeping in mind that the months in which this sale is taking place - September, October and November - are the slowest travel months of the year. Chances are that the flights going to BUF aren't all going to be sold out. So would JetBlue rather take in $73 for flying someone BUF-JFK-HOU or $0 for flying no one?

Actually, what they should probably do is to selectively and temporarily reduce capacity in September and October and do maintenance/refits on the parked aircraft. With fuel as expensive as it is, it's probably less costly to take the hit on depreciation/lease expense. Starting a route in early September that's going to face heavy competition strikes me as a bit unwise.

Quoting JetBluefan1 (Reply 11):
If the $73 sale fare was being offered over the Christmas holiday or during the summer, then there'd be something dramatically wrong with that. But considering that this is only available for travel between 9/7-11/15 and must be booked by 8/21, I don't think that it's as much of a big deal as some may think.

Except...these discounts are considerably deeper than those offered in the "introductory" fare sale when the service was announced, and they go two weeks further into November. And we haven't seen as deep discounts in any of the other markets added by B6 this year.

Quoting JetBluefan1 (Reply 11):
I just think that the marketing is very clever; that was the point of this thread.

You see clever marketing, I see deeply discounted loss leader airfares.


User currently offlineGregtx From United States of America, joined Apr 2006, 216 posts, RR: 1
Reply 13, posted (8 years 1 month 2 weeks 5 days 8 hours ago) and read 4124 times:

It's great that they are in the market. A few more flights and CO will have little choice but to drop their fares some as well.

Just as JetBlue is likely the most convenient carrier out of JFK for many destinations....nothing can compare to the frequency of flights offered by CO here in Houston. Plus a REAL ff program....plus an upgradeable cabin...plus the Presidents Club...


User currently offlineN844AA From United States of America, joined Jul 2003, 1352 posts, RR: 1
Reply 14, posted (8 years 1 month 2 weeks 5 days 8 hours ago) and read 4124 times:

I'm all for it -- I picked up a $99 OW ticket on CO from IAH to JFK, and I can't imagine this fare sale hurt. I hate flying in and out of JFK, but for a $99 one-way ticket (and 1400 EQMs) on less than two weeks' notice ... I'll take it. Thanks, B6!

Quoting ScottB (Reply 12):
Believe me, I know Galveston far better than you ever will. Thinking that tourism to Galveston from New York will fill planes is frankly laughable.

Believe me, you won't convince anyone otherwise. I've gotten into this argument before and apparently it's a matter of faith that Galveston is a big tourist destination from the tri-state area. Hell, it's hard enough for me to justify the 45-mile trip south sometimes, but hey, maybe I'm way off and New Yorkers are clamoring for our beautiful gray beaches.

I'm sure with the cruises, it draws a lot of people from otherwise unexpected locales, but most every other cruise departure point I can think of is better served from the NYC area. Well, and better served in general, for that matter.



New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2988 posts, RR: 14
Reply 15, posted (8 years 1 month 2 weeks 5 days 7 hours ago) and read 4096 times:

Quoting ScottB (Reply 12):
Believe me, I know Galveston far better than you ever will. Thinking that tourism to Galveston from New York will fill planes is frankly laughable. Don't get me wrong; I like Galveston -- but it's not a driver of traffic to and from New York

I'm sure you do - I've been there only once. And I never did say that tourism from New York will fill planes. I simply stated that Galveston vacations start up in mid-March as opposed to late May, which officially marks the beginning of summer travel. And by the way - Galveston is really becoming a hot spot for New Yorkers. It's no Fort Lauderdale, but from what I've been told - it's really getting a lot of attention from New Yorkers.

And - once again - it won't be all New Yorkers filling the planes. JetBlue is offering the $73 fare to those connecting cities as well.

Quoting ScottB (Reply 12):
The fact that Houston is a business-oriented destination is also a disadvantage to B6; CO offers more frequent flights to IAH from the more convenient NYC airport, LGA.

We won't make this argument again. LGA is convenient for some, JFK is convenient for others. It is true that CO has more frequency however - that is true. But chances are that a route such as this one isn't going to be for day trips (such as DC or Boston); therefore, frequency isn't as important (on a comparative basis).

Quoting ScottB (Reply 12):
The deeply discounted fares are available for the Columbus Day weekend and for the Veterans' Day Weekend. Clearly they don't feel that they need to hold back capacity for holiday demand on the route.

You're probably right. But chances are that JetBlue's planes will be going out full those weekends. My response here was just to show you that planes fill up during some points in the fall, winter and spring too - not just the summer.

Quoting ScottB (Reply 12):
Actually, what they should probably do is to selectively and temporarily reduce capacity in September and October and do maintenance/refits on the parked aircraft. With fuel as expensive as it is, it's probably less costly to take the hit on depreciation/lease expense.

They are already cutting capacity on some routes for the slower season. The thing is that if they cut too much then aircraft utilization will be way too low, which will then throw off some of the economies of scale that help keep JetBlue's CASM low.

Quoting ScottB (Reply 12):
Starting a route in early September that's going to face heavy competition strikes me as a bit unwise.

I agree that September is a bit of an odd time to start a new route. There has to be a reason - but I just don't know what it is.

Quoting ScottB (Reply 12):
Except...these discounts are considerably deeper than those offered in the "introductory" fare sale when the service was announced, and they go two weeks further into November.

That's true. But once again - this fare has to be booked by 8/21. This isn't a 3-week sale like the original introductory fare sale.

Quoting ScottB (Reply 12):
And we haven't seen as deep discounts in any of the other markets added by B6 this year.

You'd be surprised. JFK/BOS-AUS flights were being offered at $79 for quite some time (though they are operated on the higher-CASM E190). The route performed decently in the spring and even better over the summer. The fact that the starting fare was sometimes as high as $164 over the summer says something. The fact that capacity wasn't cut also says something.

Quoting ScottB (Reply 12):
You see clever marketing, I see deeply discounted loss leader airfares.

The marketing is clever in that the idea is unique. It relates to the people in Houston and it creates a buzz (as I've pointed out countless times in this thread). It can even relate to anyone who fills up their cars and is disgusted by the high price of gas (see: everyone) as it pokes fun at the added expense.

One of the biggest goals in marketing is to relate to your customer. I think this relates pretty well.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineScottB From United States of America, joined Jul 2000, 6781 posts, RR: 32
Reply 16, posted (8 years 1 month 2 weeks 5 days 5 hours ago) and read 3992 times:

Quoting N844AA (Reply 14):
Believe me, you won't convince anyone otherwise. I've gotten into this argument before and apparently it's a matter of faith that Galveston is a big tourist destination from the tri-state area. Hell, it's hard enough for me to justify the 45-mile trip south sometimes, but hey, maybe I'm way off and New Yorkers are clamoring for our beautiful gray beaches.

You think the beaches are gray? I always thought of them as a lighter brown, as a complement to the brown water. Big grin There's a reason we call it Galvatraz...

Quoting JetBluefan1 (Reply 15):
And by the way - Galveston is really becoming a hot spot for New Yorkers. It's no Fort Lauderdale, but from what I've been told - it's really getting a lot of attention from New Yorkers.

Oh yeah, I'm just waiting on that non-stop JFK-GLS service to be announced...

Quoting JetBluefan1 (Reply 15):
We won't make this argument again. LGA is convenient for some, JFK is convenient for others. It is true that CO has more frequency however - that is true.

And CO already offers three daily JFK-IAH round-trips. Along with ten daily LGA-IAH and eleven daily EWR-IAH round-trips. Even if JFK is more convenient to a given passenger, CO has a comparable schedule.

Quoting JetBluefan1 (Reply 15):
The thing is that if they cut too much then aircraft utilization will be way too low, which will then throw off some of the economies of scale that help keep JetBlue's CASM low.

Offering money-losing flights just for the sake of keeping an aggregate statistic like CASM down is dumb. The real question is whether the airline, in an absolute sense, with jet fuel over $2/gallon, loses less money by parking a plane or flying it. CO has had significantly reduced schedules on Tuesday and Wednesday for years now.

Quoting JetBluefan1 (Reply 15):
You'd be surprised. JFK/BOS-AUS flights were being offered at $79 for quite some time (though they are operated on the higher-CASM E190).

And those fares were being offered before it really hit the fan with the announcement of the 4Q05 results. Supposedly they're trying to bring the average fares up, but that's clearly not the case on JFK-HOU.


User currently offlineThomasphoto60 From United States of America, joined Jan 2000, 3971 posts, RR: 22
Reply 17, posted (8 years 1 month 2 weeks 5 days 4 hours ago) and read 3923 times:

Quoting ScottB (Reply 16):
You think the beaches are gray? I always thought of them as a lighter brown, as a complement to the brown water. Big grin There's a reason we call it Galvatraz...



Quoting ScottB (Reply 16):
Oh yeah, I'm just waiting on that non-stop JFK-GLS service to be announced...

Galveston is alright, but I concur it is hardly on anyone's 'must see' list. If the city could get past it's corrupt image and clean up the place, perhaps it would see a larger influx of visitors (especially those from out of state). Frankly I am surprised that Corpus Christi has not seen a jump in visitors over the years as well as air service to cities outside of Texas (though I believe that ASA has an ATL flight) .

Thomas



"Show me the Braniffs"
User currently offlineShanderawx From United States of America, joined Feb 2006, 136 posts, RR: 0
Reply 18, posted (8 years 1 month 2 weeks 5 days 3 hours ago) and read 3850 times:
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Basically, JetBlue is doing a sale for its new HOU flights from Aug 15-21. The fare will depend on the price of oil. Yesterday oil closed at $73, so the fare between JFK and HOU is $73 today. So say, if for example, oil closes at $70 today, then the sale fare tomorrow will be $

Reminiscent of a Houston restaurant which in the 1980s offered lunch based on the price of oil. This was I think the Colombe d'Or and at that time the price was about $30.


User currently offlineJetBlueAtJFK From United States of America, joined Jan 2005, 1687 posts, RR: 3
Reply 19, posted (8 years 1 month 2 weeks 5 days ago) and read 3783 times:

I think it is creative. As long as nothing big this week happens and the price triples or drops to like $20 but I somewhat doubt it. Big grin

B6jfk airplane 



When You Know jetBlue, You Know Better
User currently offlineAUSBlue From United States of America, joined Aug 2006, 17 posts, RR: 0
Reply 20, posted (8 years 1 month 2 weeks 4 days 15 hours ago) and read 3679 times:

Well, knock on wood, I will be working at the B6 HOU station fairly soon. I was kind of surprised at the sale fare; but then I remembered that when B6 started AUS, we started with intro fares at $79. So, intro fares starting in the low $70 range is not killing B6, especially since the A320 is slightly less to operate than a E190. Not to mention that starting service in September is a "dead time" for travel, so you will see the really low fares. And remember, these are fares FROM $73, which means once that bucket is filled, it's time for a new bucket. I can't imagine the bucket being that large in the first place.

Just looking at the fares yesterday on Sidestep.com, only ATA had matched JetBlue's fares, where as CO was still slightly higher, but not by much.

In terms of business, we'll see what happens. Obviously the Houston market is very competative. Long term I see the station expanding (crosses fingers for LGB-HOU, some slots available in LGB), more so now considering AUS has been stagnant in terms of expanding. With the potential of more stations opening up in the coming months, and B6's focus in Florida and beyond, I see HOU developing as a strong station for B6.



Love da' Blue!
User currently onlinePanHAM From Germany, joined May 2005, 9446 posts, RR: 30
Reply 21, posted (8 years 1 month 2 weeks 4 days 15 hours ago) and read 3655 times:

Nice marketing gag. It is always refreshing to read about innovative ways to get the customers attention.

In Germany we have bars where the beer price is linked to the DAX stock index

Quoting Lt-AWACS (Reply 2):
Does German Customs ever smile

This quote made ME smile instantly.

No, they are get a "face lock" operation when they become "civil Servants on Life Time, pension included". (Yes guys, we have that here, and dumb tax payers who support this BS).



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineATA767 From United States of America, joined Jul 2003, 419 posts, RR: 1
Reply 22, posted (8 years 1 month 2 weeks 4 days 14 hours ago) and read 3607 times:

ATA seems to be asleep at the wheel here. They should have added another segment or route already to try to compete. I think Jetblue will create more traffic on the route and ATA will benefit as long as they match the fares. ATA's loads on this route has been mid to high 90s from day one. Management had said they intend to do something to defend the route but there has been nothing yet. Maybe this sale will wake them up.

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