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Selling Orderbook Potential (B6)  
User currently offlinerayd From United States of America, joined May 2012, 3 posts, RR: 0
Posted (2 years 4 months 1 week 1 day 10 hours ago) and read 1931 times:

Jetblue's E190 / A320 orderbook.
If they were to try to sell the orderbook instead of growing capacity, how much demand are there for these planes?
Can they easily monetize (either to an airline or lessor) most of them given they got great deals on the planes?
Which airlines (Asian?) are actively trying to buy?
Or is the only option to defer like SWest just did.

[Edited 2012-05-16 09:45:22]

[Edited 2012-05-16 09:50:33]

15 replies: All unread, jump to last
 
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2891 posts, RR: 7
Reply 1, posted (2 years 4 months 1 week 1 day 10 hours ago) and read 1835 times:

B6 alread sold production slots for the E190 and deferred deliveries for both fleets. It would not be wise to sell many of the A320 slots as some got converted to the A321 (which are needed and should start getting delivered in 2013) and the NEOs are not going to start rolling in until the 2016 timeframe. With some of their A320s now 12+ years old and we fly the snot out of them, we do need some of the newer aircraft in to help keep down the average fleet age and help keep up performance as more aircraft head in for much longer heavy checks.


"If you do not learn from history, you are doomed to repeat it"
User currently offlineCompensateMe From United States of America, joined Jan 2009, 1201 posts, RR: 0
Reply 2, posted (2 years 4 months 1 week 1 day 10 hours ago) and read 1771 times:



Quoting B6JFKH81 (Reply 1):
With some of their A320s now 12+ years old and we fly the snot out of them, we do need some of the newer aircraft in to help keep down the average fleet age.../

What purpose does 'keeping down' the average age of the 320 fleet serve other than for marketing?

[Edited 2012-05-16 10:09:26]


Hypocrisy: "US airlines should only buy Boeing... BTW, check out my new Hyundai!"
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2891 posts, RR: 7
Reply 3, posted (2 years 4 months 1 week 1 day 10 hours ago) and read 1714 times:

Quoting CompensateMe (Reply 2):
What purpose does 'keeping down' the average age of the 320 fleet serve other than for marketing?

Marketing is a huge part of the industry as it goes with the strength of the brand. Customers like knowing they are on something newer.



"If you do not learn from history, you are doomed to repeat it"
User currently onlinejfklganyc From United States of America, joined Jan 2004, 3484 posts, RR: 5
Reply 4, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1625 times:

"Marketing is a huge part of the industry as it goes with the strength of the brand. Customers like knowing they are on something newer."

Yeah. TWA had one new plane every 8 days just before they tanked.

CO flew the youngest jet fleet before they were bought over.

A marketing team can market anything.

As long as the company keeps the interior new and modern AND as long as the jet is competitive fuel wise, you are good to go.

B6 needs to work on refreshing their inflight entertainment and getting wifi.

Many other companies have caught up and now surpassed this aspect of the B6 product.


Back to the original post: if they want to remain a stand along entity (and that is and if) they need to get themselves bigger by a significant margin. If they start deferring orders further than what they currently have, they are not going for this approach.

Sadly, there is no room for a 170 aircraft operator with valable assets in the US aviation industry going forward. Something will give: growth or being swallowed.


User currently offlineCompensateMe From United States of America, joined Jan 2009, 1201 posts, RR: 0
Reply 5, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1598 times:

Quoting B6JFKH81 (Reply 3):
Marketing is a huge part of the industry as it goes with the strength of the brand. Customers like knowing they are on something newer.

Time, price & loyalty programs are the three biggest factors involved in purchase decisions. Time & price being equal (close to it), one passenger may choose AA because he enjoys racking up mileage, priority benefits, lounge access and first class upgrades on the airline. Another passenger may choose B6 because he racks up points and enjoys LiveTV. But virtually no passengers are going to fly B6 simply because it has a young fleet.



Hypocrisy: "US airlines should only buy Boeing... BTW, check out my new Hyundai!"
User currently offlinerayd From United States of America, joined May 2012, 3 posts, RR: 0
Reply 6, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1597 times:

I agree that keeping avg. fleet age down doesn't make any sense. B6's avg fleet age is only 6-7 years anyway so not even close to the 14 of the LCCs.

So per the original question, how much do they get by selling the production slot for an E190?
How easy is it for them to sell more / which airlines are actively buying / lessors ,etc?


User currently offlineflyby519 From United States of America, joined Jul 2007, 1147 posts, RR: 0
Reply 7, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1562 times:

Quoting jfklganyc (Reply 4):
Back to the original post: if they want to remain a stand along entity (and that is and if) they need to get themselves bigger by a significant margin. If they start deferring orders further than what they currently have, they are not going for this approach.

Sadly, there is no room for a 170 aircraft operator with valable assets in the US aviation industry going forward. Something will give: growth or being swallowed.

I agree, but I dont even think growing is realistic. B6 tried the rapid growth phase several years ago and that was an operational nightmare. It would take decades to grow to a relevant size at our current growth rate. My bet is on some sort of merger/acquisition.



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User currently offlineaeroblogger From India, joined Dec 2011, 1363 posts, RR: 0
Reply 8, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1562 times:

Keeping fleet age down keeps maintenance costs down, and ensures that B6 is always operating the newest, most efficient aircraft. The fuel burn difference between a 1990 A320 and a 2010 A320 is enormous.


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User currently offlineCompensateMe From United States of America, joined Jan 2009, 1201 posts, RR: 0
Reply 9, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1522 times:

Quoting aeroblogger (Reply 8):
Keeping fleet age down keeps maintenance costs down, and ensures that B6 is always operating the newest, most efficient aircraft. The fuel burn difference between a 1990 A320 and a 2010 A320 is enormous.

It also eats up precious cash flow.

And while often touted, I've yet to see any evidence that there's an "enormous" fuel burn difference between a 1990 vs. 2010 A320. Yes, there's a difference - but I doubt it will come even close to off-setting the depreciated aircraft.

The "newest, most efficient fleet" has a nice ring to it. But does it serve any practical purpose? Curious minds want to know...



Hypocrisy: "US airlines should only buy Boeing... BTW, check out my new Hyundai!"
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2891 posts, RR: 7
Reply 10, posted (2 years 4 months 1 week 1 day 9 hours ago) and read 1489 times:

Quoting jfklganyc (Reply 4):
B6 needs to work on refreshing their inflight entertainment and getting wifi.

That is already in the works as mentioned on a few threads on here recently (the WiFi at least). The satellite for the WiFi was launched months ago, it's in orbit and it is going through the communications tests while the engineering teams work on the best plan for how to get it on the aircraft.

Quoting CompensateMe (Reply 5):
But virtually no passengers are going to fly B6 simply because it has a young fleet.

I never said it was the deciding factor. I said it is a direct correlation to the BRAND of the company. When customers think of the brand, they think of various things as almost a "package" (LiveTV, free unlimited snacks and drinks, leather seats, assigned seats, a nice terminal at JFK with lots of dining options, new aircraft, clean planes, and the list goes on).



"If you do not learn from history, you are doomed to repeat it"
User currently offlinecatiii From United States of America, joined Mar 2008, 3031 posts, RR: 4
Reply 11, posted (2 years 4 months 1 week 1 day 8 hours ago) and read 1475 times:

Quoting CompensateMe (Reply 9):
It also eats up precious cash flow.

And that's the DL view of it. Lower capital costs, but higher maintenance/fuel burn costs.


User currently offlinerayd From United States of America, joined May 2012, 3 posts, RR: 0
Reply 12, posted (2 years 4 months 1 week 1 day 7 hours ago) and read 1317 times:

So...who can they sell orderbook (particularly E190s) to? Do people pay for orderbooks?

User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2891 posts, RR: 7
Reply 13, posted (2 years 4 months 1 week 1 day 6 hours ago) and read 1290 times:

Quoting rayd (Reply 12):
So...who can they sell orderbook (particularly E190s) to? Do people pay for orderbooks?

IIRC, the slots that B6 sold were to Azul.



"If you do not learn from history, you are doomed to repeat it"
User currently offlinesrbmod From , joined Dec 1969, posts, RR:
Reply 14, posted (2 years 4 months 1 week 1 day 6 hours ago) and read 1240 times:

Look at Ryanair and EasyJet. Both airlines have sold off 737NG that were less than 10 years old and replaced them with newer a/c (Ryanair with more 738s and EasyJet with A319s and A320s).

Airlines in the US do seem to take the opposite approach, as airlines like Delta, American, US Airways, United and Southwest have a/c in their fleets that are well over 20 years old, they also have some a/c are approaching 30 years of age. Heck, there are DC-9s in service with Delta (inherited in the NW merger) that are 35 years old and were delivered new to a predecessor airline (North Central, which merged with Southern to become Republic and was later bought by Northwest, who was bought up by Delta.).

Even an airline like AirTran prior to their merger with Southwest planned on starting to retire their 717s after about 15 years of service, which for a US carrier is unusual. Several years ago, FL deferred some 73G deliveries and sold other a/c slated for delivery to other operators.


User currently offlinecatiii From United States of America, joined Mar 2008, 3031 posts, RR: 4
Reply 15, posted (2 years 4 months 1 week 1 day 1 hour ago) and read 1067 times:

Quoting srbmod (Reply 14):
Even an airline like AirTran prior to their merger with Southwest planned on starting to retire their 717s after about 15 years of service, which for a US carrier is unusual.

Right, but I believe I also read somewhere that the average number of cycles for the FL 717's would be markedly higher then expected by that point.


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