Irrational exuberance, I believe that they call it. No doubt that they had a lot of money to get started, no doubt that Neeleman know how to start an airline (as I said, he also knows how to sell them). And talk of 400 planes in less than 10 years - sorry, but that sounds a bit "People's Expressish" to me - even the grandaddy of the LCC's in the US doesn't have 400 planes after 30 years.
Thanks for the detailed response Goeingboing, it definitely answers my question. How much, though, will Wall Street's oversensitivity about JetBlue's stock price affect the airline's financial performance? Airlines are traditionally a narrow-margin business, and if JetBlue makes money reliably, they'll be around for the long haul even if the stock price fluctuates some.
It's not clear to me where Neeleman would go in North America if he left JetBlue. Southwest has its own corporate clique, and AirTran doesn't seem in line for any major changes. And if Branson starts up Virgin, could the USA take another new substantial LCC? Would that be a certain enough winner for N. to want to join? Unless he wants to back his bags and go to Europe or elsewhere, there literally may not be another opportunity of the kind David Neeleman seems to like. That could change, of course, but it doesn't seem to me that there's much out there that could draw him from JetBlue for now.
Regarding People Express....it was destroyed by its Frontier purchase & leveraging, its lack of computer res system (and Crandall's deft use of AA
's to destroy PE
's yields), and Burr's failure to stay on top of costs and operations. People Express was *not* destroyed by fast growth. Look at say an early 1986 timetable, shortly before the FR
purchase, and PE
's route system was close in size to AirTran's today, with a few 747's to Europe and West Coast thrown in. (Another PE
mistake JetBlue is not likely to repeat)
New York City is completely unique on the East Coast, as Burr understood; far and away the biggest O & D market, something upon which LCC's are much more dependent for their hubs (yes, they have 'em) than are network carriers. Plus its huge natural leisure corridor to Florida, NYC simply has enormous LCC potential that has never been fully tapped. PE
's loss set back the LCC dev't of not only NYC but the East Coast a decade, especially because the Cartel-Six Famiglias consolidated their control right after that.
JetBlue is simply picking up where People left off after its loss, as I think Neeleman & co. well understand. NYC can anchor the kind of operation JetBlue wants to build, a conclusion with which George Soros seems to agree, and his judgment carries some weight I think.
This is why my own gut feeling is that JetBLue knows exactly what they're doing, and that this huge growth is carefully planned. I respect your judgment otherwise, you've clearly thought it out carefully, but I still disagree. And Wall Street's teen-girl emotional state won't stop JetBlue, either.