I still have memories of PeopExpress and their overexpansion, I realize that JetBlue is a far different product than what was offered by PE, with a very different business plan, but still, overexpansion is the leading cause of airline death since deregulation.
I disagree: I think over-leveraged, un-planned expansion is the leading cause of death for airlines since deregulation.
I think B6
is on an even keel. They have lots of cash, are profitable, and know exactly where they want to go. They have a plan of action and are sticking to it as best as the business environment allows. If they think they can add another 170 aircraft, then they probably can. Remember that ValueJet/AirTran ordered 100 717s (then MD
-95s) when they had only about 35-40 DC-9s operating. That has worked out remarkably well for them!
If you can justify purchasing a different type of aircraft to add 20 seats or so on a route, you can usually justify adding one more flight of the same type of aircraft.
Agreed, but if you can do both, so much the better! And if you can't add flights, or if you feel you may need the aircraft on future routes, it may be a good idea to add them now. After all, the A321 isn't so different from an A320. If I understand correctly, we're talking the difference between a 73G and a 739, or am I mistaken?
You are correct, and there is no reason why companies should shy away from finding lower labor costs for operations that can be done overseas. Except for one thing:
Companies are finding that customers in the US do not like to do business with companies where they call someone in India to deal with a problem in Des Moines. In other words, companies develop Goodwill in the USA when they operate their business in the USA.
That said, NJ
had its heavy MX
done in El Salvador, and it was quite welcome, especially when that pilot touched down ass-first! A $2M repair cost us only a little over $1M, from what I'm told.
Those who fail to learn history are doomed to repeat it in summer school.