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Barger Says Redeployment Of Assets A Possibility  
User currently offlineLowecur From United States of America, joined Jan 2005, 585 posts, RR: 0
Posted (7 years 3 months 4 days 6 hours ago) and read 1714 times:

Looks like Jetblue may be closing some non performing cities and routes after the 60 day brainstorm session is over. Some excerps from the Wall St Journal yesterday:

WSJ: You went straight from college to New York Air and then Continental Airlines. You're known as the 'operator.' How is JetBlue going to be different under your leadership?

Mr. Barger: What's the report card on the 128 airplanes being deployed today? Has every airplane earned its way into the route network or the fleet plan? We're going to continue to grow, but let's just calm it down. As the eighth-largest airline in the country, you can't turn on a dime any more. You want to be able to move with alacrity when opportunities present themselves, but behind the scenes be very deliberate.

WSJ: Mr. Neeleman said things fell apart in February because JetBlue hadn't kept up with its growth and 'lost control.' When did you first start to worry that the company wasn't managing the transition between upstart and major airline?

Mr. Barger: There wasn't an event or a meeting, but there were smoke signals, whether it was the cost creep or the decision to take on 35 airplanes a year. We ended up with a unionization effort within our airport group. What triggered that? What weren't we doing right?

[A consultant] said, 'You keep blowing the same candles out.' You end up trying to fix the same problem the same way, or the same problem crops up and you try another fix, but there's not a comprehensive fix. As a leadership team, you better be listening to the signals because otherwise here's the next airplane and the next new city and we're going to blow the same candles out again.

WSJ: The airline business has reinvigorated network carriers, discounters continue to grow, and new airlines like Skybus and Virgin America are coming along. How is JetBlue coping with intensifying domestic competition?

Mr. Barger: Our cost structure, while we can always hone it, is in very good position. Make sure we continue to keep the product fresh. Our ability to really compete on a cost and a product standpoint really positions us well for the future. You can't rest on your laurels when Consumer Reports comes out and says JetBlue is the top airline. We have a responsibility to make sure, if something's not performing, let's redeploy the airplanes.

WSJ: Wall Street says it loves the airline, hates the stock. What do you do about that?

Mr. Barger: Our mission is to really, with rigor, review what we're doing today. Let's manage the company: 128 airplanes, 54 cities, let's evaluate. However, are we deploying our newest asset, the [Embraer] 190? I think every airline would love to have a 100-seat airplane they could deploy across North America. Many of them can't. From a revenue perspective, there is plenty of running room for our brand, and not just in the domestic U.S. Let's look at Canada, Mexico, the Caribbean. I really believe the share price will take care of itself.

Sounds like he is not happy with deploying a/c on unprofitable routes. Wonder how those Shuttles are doing? Do you think maybe those a/c could pull a better yield elsewhere? Pittsburgh is a non performer. My guess is they are gone, along with quite a few other non performing cities. They need to build out the cities that are performing and close those that are not. More reason to reinstate the 190 deliveries and sell more 320s.

[Edited 2007-06-22 19:45:57]

9 replies: All unread, jump to last
 
User currently offlineFLYGUY767 From , joined Dec 1969, posts, RR:
Reply 1, posted (7 years 3 months 4 days 6 hours ago) and read 1687 times:

Hmmm...

Sounds like LAX and other key business airports such as DCA and MIA may be on the horizon...

-JD


User currently offlineMrSTL From United States of America, joined Sep 2005, 468 posts, RR: 1
Reply 2, posted (7 years 3 months 4 days 6 hours ago) and read 1661 times:

Which other cities are known to be underperformers for B6?

User currently offlineScottB From United States of America, joined Jul 2000, 6766 posts, RR: 32
Reply 3, posted (7 years 3 months 4 days 5 hours ago) and read 1607 times:

Quoting Lowecur (Thread starter):
Sounds like he is not happy with deploying a/c on unprofitable routes. Wonder how those Shuttles are doing?

DoT has managed to break the TranStats web site yet again, so I can't look at segment passenger numbers right now. If memory serves, the BOS-JFK route does well for passengers on-board, but the actual fraction of those passengers who are O&D is somewhere around half. In 4Q2006, B6 had roughly 450 passengers each way per day on BOS-JFK; that's out of somewhere around 1100 daily seats available (since I believe 2 daily round-trips were on the A320). Apparently the route has been reduced from ten daily trips to eight currently. BOS-IAD and JFK-IAD are both down one trip from the original schedules (six to five). BOS-PHX has also gotten the ax.

I do question how competitive B6 can be on a number of routes out of BOS (like CLT, PIT, CMH) with only one daily non-stop. I wouldn't be surprised if JFK-HOU ends unless ATA's exit from LGA-HOU helps to bring the passenger numbers and fares up.


User currently offlineThirteenRight From United States of America, joined Jun 2007, 340 posts, RR: 0
Reply 4, posted (7 years 3 months 4 days 5 hours ago) and read 1588 times:

Quoting Lowecur (Thread starter):
Pittsburgh is a non performer.

I beg to differ. I think PIT has seen a tremendous turnaround. Loads, which I know arent always the best indicator of route performance, have been full or nerar full. That's very different then when PIT began.

Quoting MrSTL (Reply 2):
Which other cities are known to be underperformers for B6?

I think the question is more, what routes are low performers. I would say that IAD-SAN, JFK-PDX, and BOS-SEA are tops on the list.

I feel that Barger has a great head on his shoulders and am confident that JetBlue is now headed in a great direction.


User currently offlineFLYGUY767 From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 3 months 4 days 5 hours ago) and read 1575 times:

I am still wondering if a Mid West hub is not going to be in the works. Or a true Western hub in the works for Jet Blue in the near to mid-term future.

-JD


User currently offlineKohflot From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 3 months 4 days 4 hours ago) and read 1522 times:

And now's a good time to ask some important questions:

How successful would jetBlue be today if they had remained a privately held company?

Did the goal of being a publically-traded 'growth company' come at the expense of proper planning?

Would jetBlue be a better place to work and offer a better experience for its customers if they had stuck with their original niche - a single fleet type offering NE to Florida and transcon flying - until they could reasonably and cautiously grow the company?

When I think about the country's most successful businesses, the common thread I find is a sense of mystique or a demand that can't be readily satisfied. Think In-n-Out, Jones Soda, or Krispy Kreme before they planted stores on every corner and donuts in every grocery store. jetBlue had this same sort of aura, but they couldn't sustain it.. and I personally think that's because they were too tempted by the lure of going public. Once they did, investors didn't want to see a cautious, methodical, slow growth plan. They wanted return on their investment *soon* (this being the post-Internet bubble and all).. making more money meant growing the fleet rapidly. In turn, that meant straining facilities and their employees, desperately searching for new markets, and the addition of the E190 ("We can't stop growing, so let's just keep growing with smaller planes!").

Now they get to sort it all out and see if they can put the train back on the tracks....


User currently offlinePITrules From United States of America, joined Jun 2000, 3203 posts, RR: 5
Reply 7, posted (7 years 3 months 4 days 4 hours ago) and read 1518 times:

Quoting ScottB (Reply 3):
I do question how competitive B6 can be on a number of routes out of BOS (like CLT, PIT, CMH) with only one daily non-stop.

PIT-BOS is twice daily.

PIT started very slowly, but has picked up steadily. Perhaps it's the time of year also.



FLYi
User currently offlinePgh234 From United States of America, joined Jul 2001, 795 posts, RR: 1
Reply 8, posted (7 years 3 months 2 days 16 hours ago) and read 1271 times:

"Many other business travelers are making the same buying decision, said Mr. Luceno, JetBlue's manager of national sales. Consider the route from Pittsburgh to Boston. Before JetBlue arrived, the average one-way fare was $178, with US Airways the only major option. After JetBlue's arrival, the average fare dropped by 46 percent to $97, according to JetBlue, and the total number of daily passengers doubled to 409. While JetBlue netted 109 of the new passengers, US Airways got 96, bringing its overall share of that route to 62.9 percent, or 257 total passengers.

JetBlue, with two flights daily to Boston, now has 26 percent of the passengers on that route."



However, B6 is certainly not giving up on PIT anytime soon. Barger is coming to PIT this tuesday to rile up some more business traffic. The rest on B6 in PIT (and other interesting info) can be found here...

http://www.postgazette.com/pg/07175/796510-28.stm

-pgh234


User currently offlineLowecur From United States of America, joined Jan 2005, 585 posts, RR: 0
Reply 9, posted (7 years 3 months 2 days 11 hours ago) and read 1207 times:

Quoting ThirteenRight (Reply 4):
I beg to differ. I think PIT has seen a tremendous turnaround. Loads, which I know arent always the best indicator of route performance, have been full or nerar full. That's very different then when PIT began.

Read em an weap, palley. Barger is going to Pitt to try and stimulate traffic, but at present LF's are lousy.

http://www.post-gazette.com/pg/07175/796510-28.stm


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