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JetBlue Sees Near Break-Even 3Q  
User currently offlineFA4B6 From , joined Dec 1969, posts, RR:
Posted (7 years 11 months 6 days 12 hours ago) and read 4078 times:

Very interesting!

http://www.chron.com/disp/story.mpl/ap/fn/4205175.html

"NEW YORK — Low-cost carrier JetBlue Airways Corp. said it expects a third-quarter pretax profit margin of between negative 1 percent and 1 percent, as unit costs are growing about as fast as unit passenger revenue, according to an investor update filed with the Securities and Exchange Commission Thursday."

71 replies: All unread, showing first 25:
 
User currently offlineJ32driver From United States of America, joined May 2000, 399 posts, RR: 1
Reply 1, posted (7 years 11 months 6 days 10 hours ago) and read 3944 times:

Thought this was in the notes of the 2nd quarter statement. It says its what analcysts expected. Whats the news?

User currently offlineDL4EVR From United States of America, joined Jan 2006, 641 posts, RR: 1
Reply 2, posted (7 years 11 months 6 days 9 hours ago) and read 3914 times:

Wow...amazing!!! While B6 is struggling to break even, all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.


We Love To Fly And It Shows.
User currently offlineWMUPilot From United States of America, joined Jan 2003, 1473 posts, RR: 12
Reply 3, posted (7 years 11 months 6 days 9 hours ago) and read 3887 times:

Quoting DL4EVR (Reply 2):
Wow...amazing!!! While B6 is struggling to break even, all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.

It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.



JetBlue - Bringing humanity back to air travel
User currently offlineNuggetsyl From United States of America, joined May 2006, 213 posts, RR: 0
Reply 4, posted (7 years 11 months 6 days 9 hours ago) and read 3866 times:

To break even in the 3Q is nothing to be happy about.

User currently offlineDL4EVR From United States of America, joined Jan 2006, 641 posts, RR: 1
Reply 5, posted (7 years 11 months 6 days 9 hours ago) and read 3866 times:

Quoting WMUPilot (Reply 3):
charge your customers huge sums of money to fly.

Are you kidding me with this one? Delta as well as all of the majors continuously match jetblue's (as well as other competing LCCs) fares!! So unless you're trying to imply that B6 also gauges its customers, that's a moot point.



We Love To Fly And It Shows.
User currently offlineWMUPilot From United States of America, joined Jan 2003, 1473 posts, RR: 12
Reply 6, posted (7 years 11 months 6 days 9 hours ago) and read 3858 times:

Quoting DL4EVR (Reply 5):
Are you kidding me with this one? Delta as well as all of the majors continuously match jetblue's (as well as other competing LCCs) fares!! So unless you're trying to imply that B6 also gauges its customers, that's a moot point

If it weren't for the low cost carriers, B6, WN, FL, NK, the majors would still be charging outragous prices for their tickets. The only reason for price matching is because of the LCCs.



JetBlue - Bringing humanity back to air travel
User currently offlinePanamair From United States of America, joined Oct 2001, 4895 posts, RR: 25
Reply 7, posted (7 years 11 months 6 days 9 hours ago) and read 3826 times:
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Quoting WMUPilot (Reply 3):
charge your customers huge sums of money to fly.

B6 is a business, just like every airline out there. Management's responsibility should be to maximize profits and value for the shareholder; they should be charging as high as they possibly can afford to in order to maximize revenues, etc. If you were a shareholder, you would want management to pursue all avenues of increasing revenues and lowering costs as well. Airlines are not charities; they don't charge lower fares because they're concerned about your pocketbook - they do those things, when necessary, to gain market share, to improve their loads, etc.


User currently offlineDL4EVR From United States of America, joined Jan 2006, 641 posts, RR: 1
Reply 8, posted (7 years 11 months 6 days 9 hours ago) and read 3820 times:

Quoting WMUPilot (Reply 6):
If it weren't for the low cost carriers, B6, WN, FL, NK, the majors would still be charging outragous prices for their tickets

Yes, and they'd also be turning over $500 Million profits annually as well as providing decent in flight service. Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"



We Love To Fly And It Shows.
User currently offlineWMUPilot From United States of America, joined Jan 2003, 1473 posts, RR: 12
Reply 9, posted (7 years 11 months 6 days 9 hours ago) and read 3781 times:

Quoting DL4EVR (Reply 8):
Yes, and they'd also be turning over $500 Million profits annually as well as providing decent in flight service. Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"

I agree that everybody loves low fares, and fares too low is a bad thing, airlines aren't greyhound (maybe southwest duck  Wink. Hopfully the day of $900 walk up fares are a thing of the past and it can come more reasonable, but every once in a while they sneak in there.

I had a rather lengthy discussion a while ago with several crewmembers from other airlines about bringing back regulation. Set the airfares to cover the cost to the airlines plus some and let the carriers battle it out of the service front. Just about every airline, on the domestic front, offer a great coach class product. Pretty soon the advantage JetBlue had as far as inflight service will be nil as other carriers have started to realize that customers want stuff to do on a transcon flight. I believe that United is even looking to put XM Radio into their aircraft. We have to find to ways to stay ahead.

Back to the OP, we knew at the beginning of the year the 3Q was going to be tough. Weaker demand and higher fuel prices where going to make this a very very tough quarter for us. Looking ahead, with the cost cutting procedures that we have in place 4Q and 2007 are looking very well indeed. Mainly not only for JetBlue but the industry as a whole.



JetBlue - Bringing humanity back to air travel
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 10, posted (7 years 11 months 6 days 8 hours ago) and read 3761 times:

Quoting WMUPilot (Reply 3):

It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.

Last I can recall...AA, UA, and CO aren't in bankruptcy and pay their bills also...and have competing fares with B6 as well as provide international transatlantic/transpacific flights....

Sure LCCs have their place...but its the kool-aid drinking which I find to be a bit funny.... Smile



"Up the Irons!"
User currently offlineN844AA From United States of America, joined Jul 2003, 1352 posts, RR: 1
Reply 11, posted (7 years 11 months 6 days 8 hours ago) and read 3735 times:

Quoting WMUPilot (Reply 3):
It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.

Note that AA has never been in bankruptcy, and they're doing decently well right now. Just sayin'.

Also, anecdotally, the last few times I flew a route that B6 served, the legacies were either the same price or less expensive. I'd like to try B6 one of these days, but I can't imagine paying a premium to do so.



New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
User currently offlineMiCorazonAzul From , joined Dec 1969, posts, RR:
Reply 12, posted (7 years 11 months 6 days 7 hours ago) and read 3690 times:

Quoting DL4EVR (Reply 2):
all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.

at who's expense??? THEIR EMPLOYEES. Go talk to any employees of these bankrupt airlines and they will tell you horror stories of what they are going through just to return to profitability. Jetblue on the other hand hasn't cut our pay or anything like that.

Quoting DL4EVR (Reply 8):
Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"

which is PRECISELY why legacy carriers are in trouble. With airlines like Jetblue bringing in low fares, they are trying to match us and in turn LOSING money left and right. Why you may ask? Because their cost structure is not like JetBlue's so they can't afford to offer those low fares but they are forced to just to stay in competition.


User currently offlineScottB From United States of America, joined Jul 2000, 6745 posts, RR: 32
Reply 13, posted (7 years 11 months 6 days 7 hours ago) and read 3666 times:

Quoting WMUPilot (Reply 3):
force your employees take massive paycuts

Massive paycuts which bring them down to (or slightly above) JetBlue's pay rates. When US Airways sought paycuts in their second bankruptcy, the proposed pay rates were modeled on jetBlue and America West pay rates.

Quoting MiCorazonAzul (Reply 12):
Jetblue on the other hand hasn't cut our pay or anything like that.

But you were already making less than pretty much anyone outside the regionals.


User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2978 posts, RR: 14
Reply 14, posted (7 years 11 months 6 days 7 hours ago) and read 3655 times:

Didn't some Legacy carriers comment on weak August revenue as well? I believe US was one of them. Hm. Maybe - just maybe - this has something to do with Hurricane Ernesto and the security alert due to the foiled London bombing plot.

But that's just a guess... Yeah sure

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 15, posted (7 years 11 months 6 days 7 hours ago) and read 3647 times:

Quoting MiCorazonAzul (Reply 12):
at who's expense??? THEIR EMPLOYEES. Go talk to any employees of these bankrupt airlines and they will tell you horror stories of what they are going through just to return to profitability. Jetblue on the other hand hasn't cut our pay or anything like that.

AA hasn't filed for bankruptcy, CO hasn't been there in a long time..and B6 has been around for only 6-7 years...yet their expenses have been increasing as if they have been around for many more years....

"with unit costs up 13 percent to 15 percent."



"Up the Irons!"
User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2978 posts, RR: 14
Reply 16, posted (7 years 11 months 6 days 7 hours ago) and read 3631 times:

Quoting Jacobin777 (Reply 15):
"with unit costs up 13 percent to 15 percent."

I'm just going to state the facts here: unit costs are up significantly because of the integration of the E190s into the fleet, which obviously have a much higher CASM than the A320. The other reason is because of the increase in oil, which was significantly higher this past 3Q than last 3Q.

Of course, there are some non-fuel, non-E190 increases such as labor and maintenance, but those are minimal. In other words, the bulk of the increase is due to the E190s and fuel.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineJerseyguy From United States of America, joined Oct 2005, 1978 posts, RR: 0
Reply 17, posted (7 years 11 months 6 days 7 hours ago) and read 3631 times:
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Quoting Jacobin777 (Reply 10):
have competing fares with B6 as well as provide international transatlantic/transpacific flights....

Thats part of the reason that other carriers are making a profit, international flights with no LCC competition. You don't think that all this international expansion is a fluke do you?

You also have the domestic routes without LCC competition.



Frontier Early Returns Ascent Status| Webmaster of an unoffical TTN page see profile for details
User currently offlineF9Animal From United States of America, joined Dec 2004, 5026 posts, RR: 28
Reply 18, posted (7 years 11 months 6 days 7 hours ago) and read 3623 times:

I was kind of surprised they did not report a good chunk of profit. But.....

B6 is adding new markets, and to make instant profits on new routes is unheard of. B6 is still growing like crazy, and while growing, sometimes it drains on the profits. You have to invest in your business to make money. That is exactly what B6 is doing, investing into bigger and better things.

Plus, the price of fuel is coming down. Expect to see B6 take a hedge around $50-$55 pbl. If it goes lower than that, then expect most airlines to take advantage of it. The fuel has to have taken a hit on B6's bottom lines.

Just my opinion of course. I would suspect many to start bashing away, and talking trash about B6 going out of business. Sorry to those that think that, as B6 has a long way to go before shutting down. LOL!

GO B6!!



I Am A Different Animal!!
User currently offlineTransWorldSTL From United States of America, joined Mar 2006, 568 posts, RR: 1
Reply 19, posted (7 years 11 months 6 days 7 hours ago) and read 3623 times:

Quoting JetBluefan1 (Reply 14):
this has something to do with Hurricane Ernesto

Ernesto was a big flop though...


User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2978 posts, RR: 14
Reply 20, posted (7 years 11 months 6 days 7 hours ago) and read 3618 times:

Quoting TransWorldSTL (Reply 19):
Ernesto was a big flop though...

That doesn't matter. FLL and PBI were still closed for a day, and many people had to be rebooked. Not to mention that it did have an impact on immediate bookings for the next few days as SoFl got back on its feet.

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlinePanamair From United States of America, joined Oct 2001, 4895 posts, RR: 25
Reply 21, posted (7 years 11 months 6 days 7 hours ago) and read 3603 times:
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Quoting JetBluefan1 (Reply 14):
Didn't some Legacy carriers comment on weak August revenue as well? I believe US was one of them. Hm. Maybe - just maybe - this has something to do with Hurricane Ernesto and the security alert due to the foiled London bombing plot.

Yes, domestic mainline RASM is estimated to have grown about 8.5% in August, whereas original analyst expectations were in the 10-11% range. Here's an article:

http://www.thestreet.com/_yahoo/news...cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

US is expected to have the highest rate of RASM growth in August - at 11-12%, followed by NW and DL at 10-11% each.


User currently offlineCa2ohHP From United States of America, joined Sep 2005, 955 posts, RR: 1
Reply 22, posted (7 years 11 months 6 days 6 hours ago) and read 3589 times:

Even PeopleExpress had some good quarters  crossfingers 

User currently offlineTransWorldSTL From United States of America, joined Mar 2006, 568 posts, RR: 1
Reply 23, posted (7 years 11 months 6 days 6 hours ago) and read 3548 times:

Quoting JetBluefan1 (Reply 20):
That doesn't matter. FLL and PBI were still closed for a day, and many people had to be rebooked. Not to mention that it did have an impact on immediate bookings for the next few days as SoFl got back on its feet.

It does matter.. IF Ernesto was some huge hurricane that stopped tourism for a long period of time in Florida, then yes, it could be a major factor in B6's profits.. But if B6's entire profit margine relies on one day of flights to two airports in Florida, then god help them!


User currently offlineTransWorldSTL From United States of America, joined Mar 2006, 568 posts, RR: 1
Reply 24, posted (7 years 11 months 6 days 6 hours ago) and read 3525 times:

Quoting JetBluefan1 (Reply 16):
In other words, the bulk of the increase is due to the E190s and fuel.

Well, thats still a problem isn't it?


25 JetBluefan1 : I never said that B6's entire profit margin relies on one day of flights to two airports in Florida. It's simply a contributing factor, as well as th
26 Post contains images WMUPilot : No it's not!!! We have seen an increase in costs related to the 190s. The 190 has been going through some serious software issues and it is taking ti
27 Post contains images EA CO AS : ...yet. B6's problem is that they've already picked the low-hanging fruit. Their niche to date has been fairly long stage lengths in markets with lar
28 TransWorldSTL : It was implied. I've come to realize it's impossible to get the B6 cult members to believe any of the facts against their beloved airline.. Costs are
29 Mariner : Oil did a swan dive below $60 today before coming back up for air to finish at $60.25. It is thought there will be a serious test of the $60 floor ne
30 JetBluefan1 : Nope. Not at all. Hurricane Ernesto was a contributing factor. The biggest issue was the security threat. Please do not stereotype. I'm the one who p
31 TransWorldSTL : But you see, the cult members, instead of simply saying "yes, B6 doesn't exactly know how to handle it's growing costs due to aging fleets, and workf
32 JetBluefan1 : Heck, this thread was even started by a B6 Crewmember: The reason that some people have turned around and "attacked" other airlines is because others
33 Planemaker : None of the above is in any way remarkable... it applies to all airlines. It seems that almost everyone is fixated just on CASM and compeletely ignor
34 Post contains links and images Jacobin777 : The fact the E190's have a higher CASM won't help their their CASM average..but I assume it will help their bottom line... Besides WN...oil has affec
35 Ikramerica : Now that B6 is on Travelocity and other sites, this is made crystal clear. I've been saying this for a while, and everyone says I'm crazy. But now we
36 JerseyGuy : Pretty easy to do when your charging more than triple the fare for one ways where there is no LCC competition (example DL to SLC from JFK $158 EWR $5
37 EA CO AS : Actually, no. The other airlines are typically focusing on expansion in the longhaul/international markets where there is more money to be made. B6 i
38 Post contains images Jacobin777 : I'm not getting your point... Didn't have anything to do with my comments....as I had already stated that carriers are competing with B6 on the domes
39 Post contains images Lightsaber : First, I have to agree that B6 is doing something wrong if they are not turning a profit during the 3Q. However, I will wait to see how many airlines
40 Post contains images Jacobin777 : I've been on record on being bearish on the economy for 2-3 years now and my predictions still haven't come through...though I wasn't expecting the h
41 Post contains images Lightsaber : Yes, bubbles do last longer than anyone can imagine. Its now time for housing to land. I believe this month (September) is the last chance until 2009
42 Post contains images Jacobin777 : ...agree...my area where I live (Silicon Valley) has been quite stable...houses aren't running up in prices, but aren't going down..they have been ba
43 EA CO AS : Their Achilles' heel is they're competing against regional carriers providing feed for legacy airlines with global FF programs chock full o' loyal bu
44 Planemaker : WN doesn't do any international flying (check what their average trip length is!), and the other LCCs do very little cross border, so your point is m
45 F9Animal : There are plenty of long markets that B6 can attract, including Canada, Mexico, and the lower Americas. I know this industry is not easy, but I reall
46 EA CO AS : ...yet. I understand your point, and you're correct - except it's likely that B6 will not enjoy a significant delta between CASM and RASM on these sh
47 JerseyGuy : Here's my point...Legacies charge a premium on domestic routes with NO LCC competition. They are also able to charge premium fares on international r
48 Post contains images Jacobin777 : Isn't that just good business sense? Charge up the "wazoo" until something else comes and drops prices down? Also, most cities have competion anyway.
49 Planemaker : First, what heavy competition? B6 has publicaly stated that they plan to put the E190 mainly on underserved routes. Second, what is known is that B6'
50 EA CO AS : Underserved doesn't mean UNserved, and I'm sure you'll agree that the carriers that also fly those routes won't simply fold up their tents just becau
51 JetBluefan1 : I just took a look at the investor update on jetblue.com. While 3Q06 should have a -1 to 1% pre-tax operating margin, the whole year is forecasted at
52 Post contains images Planemaker : Well, judging by your previous statement... ... why wouldn't the "other" carriers "simply fold up their tents" and "focus on longhaul/international m
53 Wsan581 : That means they might even make a small profit. If the price of oil continues to slip this can be a possibility.
54 Cactus739 : No offense intended, but how long does it take to integrate a plane? They've had the thing for damn near a year now....issues should be wrapped up an
55 JetBluefan1 : No offense taken. Since the E190's started off with some really, really big problems, they cost a lot to research and solve. While most problems have
56 Steeler83 : Crap, I was going to say something regarding the latest drops in oil prices, but you beat me to it man! And I am sure that WN would make massive prof
57 Kevin777 : I'm afraid that JetBlue's problems are more fundamental than issues arising from high fuel prices and integration of the 190s. JetBlue saw a wonderful
58 Richierich : But DL's business model is not to setup to "provide low fares", at least not with their costs as outrageously high as they were. WN's model is to pro
59 Kevin777 : My point exactly! They should never have started out on the hub-and-spoke model, that's the root of the airline's problems right now. Now, I'm not go
60 Post contains images Jacobin777 : Welcome 2 A.net...
61 Planemaker : How so? Apart from the teething problems of the E190, how will making higher profits with their E190s be a problem? Luton and Stanstead are de-facto
62 Richierich : There is only so much point-to-point you can do with the A320. And lets remember that New York is the O & D capital of the US, hands down. With that
63 Post contains images Kevin777 : I'm not talking about the teething problems of the 190s, I'll leave that to others in this thread.. I think the problem is that people are indeed wil
64 Planemaker : If you read the extracts that I posted from USA Today you will see that it is the passengers on Legacy RJs that are paying the "premiums"... not B6's
65 JFK998 : I am a JetBlue fan... however, just give me one airline, JUST ONE that hasnt had its financial ups and downs then get back to me on "believeing the f
66 JetBlueAUS : My thoughts exactly. Almost every airline that has ever existed has had its financial ups and downs. JetBlue has hit a few bumps in the road, and the
67 Post contains images Wsan581 : They have recently stated that they can expect a break even year, if you factor in the cost of oil recently, they can even make a small profit. jetBl
68 Richierich : I thought they lost money in their first and second quarters of existence too (when was that... 2000?) It's hard to make money with only a handful of
69 Wsan581 : Since they went public they had two unprofitable quarters. I agree B6 is in better shape then others. They will trim 250 million in cost by next year
70 Steeler83 : I would like to see what they do to acheeve that. 250 mil is quite a considerable reduction...
71 Post contains links Wsan581 : 250 million is alot...they are doing this in many different ways. 1) They currently have 92 employees per A/C. Mr. Neelemen stated that they will get
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