SHUPirate1
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JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 9:19 pm

Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
 
A350
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RE: JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 9:33 pm

It's amazing - Southwest and JetBlue are making money. We can conclude that the state of the industry is not as bad as many people think. What is bad, however, is the legacies' ability to adapt to the markets' demand.

A350
 
JGPH1A
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RE: JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 9:36 pm

No doubt the nay-sayers will be on here any minute pointing out that

a) Airbus gave them all those planes for free
b) In 2 years those planes will be falling apart and will cost a fortune to maintain
c) In 2 years all the new hires at B6 will be demanding higher pay and B6 will go bankrupt as a result.
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
SHUPirate1
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RE: JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 9:37 pm

A350-I think you missed somebody...airTran also turned a profit...
Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
 
JBLUA320
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RE: JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 9:55 pm

Not a huge sum, but in this industry, a penny is gold. Nice to see them turn a profit and continue to expand.

Should do some good for their stock-- it needs it!

JBLU
 
FA4B6
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RE: JetBlue Turns A Profit, Beats Expectations!

Thu Jan 27, 2005 11:45 pm

No doubt the nay-sayers will be on here any minute pointing out that

a) Airbus gave them all those planes for free
b) In 2 years those planes will be falling apart and will cost a fortune to maintain
c) In 2 years all the new hires at B6 will be demanding higher pay and B6 will go bankrupt as a result.





LOL ... exactly! astounding news for B6, glad to add another quarter of profitability. Hopefully things will do much better in Q1 '05. Cant wait to see what service is added/taken away.

"Leap! And the net will appear."
 
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EA CO AS
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 12:58 am

In 2 years those planes will be falling apart and will cost a fortune to maintain

Falling apart? No. A fortune, no. Costing MORE to maintain, though? Absolutely.

Anyone who says otherwise is lying or selling something.


In 2 years all the new hires at B6 will be demanding higher pay

It's likely that B6 employees will, over time, ask for higher pay if the company continues to succeed in the coming years. That's an absolute truth.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
RDUDDJI
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 12:59 am

I've always been a huge fan of B6's buisness model. B6 just does smart things. CEO Neeleman knows what he is doing.

From RES agts working at home, high aircraft utilization, low distribution costs (I don't think they are part of the GDS), all A320's equipped with rafts for overwater ops, paperless cockpit, IFE in every seat (they were one of the first, then they purchased the whole LiveTV system), to the JFK hub (avoiding the congestion of other NY Metro airports), they just make good decisions.

Unlike the majors, they don't waste money flying unprofitable routes (see the ATL situation). I hear they even have their own standard routes issued by ATC for the NY-FL flights.

Any U.S. airline that is making money in the current revenue enviornment is doing something right. The only negatives I really saw in their earnings report was that their yield was down 7.1% and their operating costs were up 41%. The lower yield has alot to do with the competition that has increased in the NY-FL and tras-cons markets. The rise in operating costs was somewhat expected with the cost of fuel and their continued expansion.

I haven't had to opportunity to fly on them yet, but I look forward to doing so.

[Edited 2005-01-27 17:02:53]
Sometimes we don't realize the good times when we're in them
 
jetbluefan1
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 1:27 am

Just listened to the online webcast and must say that I'm very pleased...they were supposedly going to report a -1/+1 operating margin, but instead it's an unbelievable 3.7%!

This past Q4 had a lot of things going against them - rising fuel costs, additional capacity, hurricane hangover, etc.

JetBlue was built for the bad times. This proves it.

JetBluefan1
 
hawk44
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 1:36 am

I'm not surprised at their earnings, they are making good choices all around and they offer something that WN doesn't have Direct TV. I plan on using B6 this spring for the first time and I can't wait.
Never under estimate the power of US
 
FA4B6
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 2:04 am

It's likely that B6 employees will, over time, ask for higher pay if the company continues to succeed in the coming years. That's an absolute truth.


Flight Attendants as of now get an automatic 4.9%-9% raise every year (the % changes based on years of service). Thats pretty significant whereas my last company you practically had to beg for 5% and even then it was unrealistic. Average raise at that company (which is a hugely profitable Fortune 500) was 3%.

At B6 we get compensated really well and I dont think that the wage issue will be an issue for a very, very long time.
"Leap! And the net will appear."
 
B6FA4ever
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 2:15 am

all i can say is that i'm pretty impressed! i was actually expecting a small bit of a loss dues to all the drama airlines faced in the last quarter w/ the same issues (fuel, yields, huricane hangover...love that phrase JetBlueFan1).

just shows of a strong performance we did for '04! and FA4B6 is right. we are compinsated well. and i too believe there wouldn't be a wage issue for a long time.

here's to a strong '05 for us as well as to all other carriers!

~B6FA4ever
 
jacobin777
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 3:25 am

I applaud them for making money where as most are losing big bux, but their operating expenses SOARED by a total of 41%!!! They are expanding rapidly, adding different planes to their fleet......while B6 is doing very well, they are still a young company compared to say.....WN.......lets see how they do in a few more years.........

WN has proved the test of time.........but I do think JBLU will do ok in the long run..they have adapted and adopted modern-day technology very well, and it does seem if JBLU has a loyal following ....which as we know is important to success (along with cheap fares..).....its the "Salaries, wages and benefits" part which concerns me the most..

good luck JBLU!!.....I will try them soon sometime.
"Up the Irons!"
 
PHXinterrupted
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 3:53 am

Alaska Airlines may very well post a profit for 2004 as well.
Keepin' it real.
 
richierich
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 4:07 am

It's likely that B6 employees will, over time, ask for higher pay if the company continues to succeed in the coming years. That's an absolute truth.

I think it is a fair statement but doesn't tell the whole story. JetBlue is also growing and will add new aircraft and undoubtedly new airports in 2005. You really need to also look at employees per aircraft - any increases current employees get should be more than offset by the next new aircraft going into service.

I think the main reason operating costs went up was nothing at all to do with employees receiving more money. It was FUEL! I'd like to see any other airline that could sustain a 41% increase in fixed costs and still eek out a profit!
None shall pass!!!!
 
jetblueatjfk
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 6:11 am

As JBLUA320 said, I hope they do because I have 5 shares of B6 soo... And Q4 was really good. Compared to everything I did not think it would be that great. Good Job!

jetBlueAtJFK
 
goingboeing
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 6:24 am

No doubt the nay-sayers will be on here any minute pointing out that

a) Airbus gave them all those planes for free
b) In 2 years those planes will be falling apart and will cost a fortune to maintain
c) In 2 years all the new hires at B6 will be demanding higher pay and B6 will go bankrupt as a result.


Nope...this naysayer will only say that they haven't started flying the 190's yet....a step that management has even said will increase costs nearly 15%. It doesn't surprise me that they turned a profit this quarter....they appear to be a very well run airline. But I do question some of their future moves.
 
stlgph
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 6:39 am

Question...

Since I've only been here for a few months, what's this about free planes for JetBlue?

Do tell!

if assumptions could fly, airliners.net would be the world's busiest airport
 
goingboeing
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:26 am

JetBlue got a very sweet deal on their initial aircraft. Many say that they got them for "free", but that's not the case. But the lease payments are considerably less than what they "usually" are.
 
PPVRA
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:41 am

Nice to see them doing well!

Some what off-topic question:

Any chance of B6 going long haul? I understand they are an LCC, but I believe they can be quite succesful in doing so. Maybe with 7e7s? Would be an amazing fleet: E190s, A320s, and 7e7s.

Any thoughts?

Sorry about the off-topic question guys...

Cheers,

PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
stlgph
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:47 am

Goingboeing--

Kind've like a "fly us exclusively for life" deal?

if assumptions could fly, airliners.net would be the world's busiest airport
 
goingboeing
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:48 am

Do you mean International? New York to LA is about as long haul as a domestic carrier can get. And I doubt they'll go international, at least not to Europe or South America.
 
PPVRA
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:56 am

Yes, I meant international, sorry. More precisely Europe.

They can offer pretty competitive prices, and with the 7e7 would be even easier/more profitable.

Cheers,

PPVRA

[Edited 2005-01-27 23:57:59]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
MAH4546
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 7:59 am

Do you mean International? New York to LA is about as long haul as a domestic carrier can get.

Miami-Seattle is longer. So is Newark-Honolulu.
a.
 
174thfwff
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 8:19 am

Tell me if I'm wrong, but B6 does not have a unionized staff...this does wonders for the company as I feel they almost have a take it or leave it policy. It is working great for them. Further the few flights that I have been on B6 their staff really likes working for them. Unions are almost a double edged sword in any industry,as sometimes they demand more then their companies can actually afford to give.

Also since they are such a young company, again tell me if I'm wrong, but their pay scale isn't outrageous. This really helps a lot as well.

All this could change in the future, but for now let them work their magic.
Brooklyn, Queens, Manhattan, Staten, Uptown, what now? Lets make it happen.
 
CRPilot
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 8:43 am

I gotta say, B6 and WN are definitely the future of domestic aviation. I am so impress at how they continue to prove the success in their formula. Bottoms up for Neeleman.  Big thumbs up

Cheers

CRP

[Edited 2005-01-28 01:05:48]
Flying is a privilege!
 
flybyguy
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 8:58 am

They can offer pretty competitive prices, and with the 7e7 would be even easier/more profitable.

For one thing Boeing despises new LCCs, they'll never sell a single jet to an upstart LCC in this hemisphere in a million years.

Boeing isn't flexible that's the problem... and now the cash-cow US carriers are leaking money like a sieve and can't afford to buy Boeing's newest creations. Now the revenue, though small, from LCCs (not Southwest) would really do them some good.

I think they are kicking themselves now. Jetblue could have been flying 737NGs, but instead pushed them to airbus. However, it seems that they learned their lesson and are taking on Ryanair and Westjet.



[Edited 2005-01-28 01:19:26]
"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
 
padcrasher
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 12:48 pm

Hate to be the bearer of bad news but we're all adults here right?

Jetblue made 13.1 million this Quarter off fuel hedges. Some 2 or 3 million off of a tax refund for some old expired tickets. Putting this aside that is a loss margin of 4.1%. Now Delta had a loss margin of 21%. 780 million. Per the CEO they intend to cut 675 per Q in costs by the end of 06. If that is true, it puts their margin at or below JB. Now I understand this is alot of if and buts, but if you just look at the business model without the hedging and you take the CEO on his word. That is an enormous threat to JB. Not to mention JB's cost will go up as their growth slows and labor and maintenance expenses mature. Anybody dispute this?
 
PVG
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 1:00 pm

Can someone clarify what was the original deal between JB & Airbus. Did they get the planes for 2 years for very low or no payments? Is this true or just a rumor?
 
padcrasher
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 1:08 pm

The received maintenance warranties, where Airbus picked up the cost of some heavy maintenance costs during the first years of the aircraft. Jetblue employees feel free to jump in here. I realize this is hard for you to talk about. Anbody know the details?
 
notbluejet
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 5:39 pm

Padcrasher.
Why would this be a hard topic to talk about??If I knew details myself I would gladly share them.
Do you realize this is a normal part of business?? Do what is best for your company. If you needed to get a product would you simply buy anything or would you search for the best mix of price and product. Many companies outsource labor, import parts and other practices to increase their profits.

Want some bad news yourself?? You are comparing Deltas margins over a year from now to 4th quarter 04 jetBlue margins. Oh yes and BTW.. Success goes way beyond operating margins....

Yes you are correct that jetBlues costs will increase but at the same time hopefully profits will also. Who says jetBlues growth will slow? Maybe Delta's size will decrease maybe it will increase. You are incorporating a whole lotta BUT.

Let us not forget Deltas costs will also rise, those thousands of Delta employees will ALSO get raises, and make their 5th , 6th 15th year... Deltas planes will need their next c check, d check etc. My point here is very obvious.

And finally when the dust settles whatever happened along the way does not matter after the fact in this case. (IMO anyway) . Profit is profit. If they found a sack of cash on a street corner and this was the reason they profited. Heck I would be happy either way.

Believe me there are plenty of flaws in both companies though I don't feel bashing anyone gets anything accomplished.

May I ask you Padcrasher.. Do you work for Delta? If so that explains it all. For some reason I have noticed ( and please all you good guys/gals out there don take this personal). BOth LCC and Legacy have employees which go out their way to bash. Talk about being all adults .... For once I wish this could be put aside and a fair discussion or analysis be done without the BS.
 
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lightsaber
Crew
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 5:42 pm

Padcrasher

I don't dispute your numbers but would instead add a few factors that will raise DL costs versus B6 in the next few years. Please don't take this as anything but an adult debate:

1. Profits earn interest, Losses (debt) require interest payments. This will skew the math in B6's favor.

2. With profits, B6 will be able to expand with much lower interest loans than questionable liquidity airlines.

3. Delta is changing their cost structure compared to today's market. In 24 months B6 will have acquired 34 a320's and 25 E190's (or 102 A320's total and 25 E190's versus 68 a320's today or an approximately 2X growth in airframes). While I do think Delta's simplifares are a long term smart idea, they need to be much more nimble about cost cutting than to accomplish it in 24 months from now. Oh, I think DL will survive. I think that B6 will still have an advantage in 2007.

As a B6 stock holder, I'm VERY happy they pulled ANY profit in this tough climate. Congrats to B6, Wn, FL and possibly Alaska.

PPVRA:

I think you have a good point with the 7E7/A350 idea. Eventually a LCC will go international long haul. I'm guessing B6 will wait until they have over a Hundred a320's and E190's in the fleet (of each type) before they order a third airframe. This puts them out to 2010 ish (options dependent) before they order in my opinion. But then again, the E190 order shocked the hell out of me (note: I love the E-jet concept. I was just surprised B6 ordered the E190).

PVG: There is an urban myth on a.nutters that B6 received their original aircraft free or with no payments for x months. Untrue. Fact: "new air" was able to negotiate a sweet deal for their first aircraft at unusually steep discounts. "New air" was planning on buying 737NG's as that was the only aircraft flown by LCC circa 1997 when they ordered (admit to being unsure of order year, please correct me if I'm wrong). Airbus was very determined to get their toe in the LCC market; they even admitted in an annual report to discounting the B6 airframes steeply to win the order. But B6 has had to pay for them from day one. FYI, "new air"= B6 = jetblue

Lightsaber.
"They did not know it was impossible, so they did it!" - Mark Twain
 
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glideslope
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RE: JetBlue Turns A Profit, Beats Expectations!

Fri Jan 28, 2005 8:47 pm

Let's not forget that Neeleman approached Boeing in the initial phases. Boeing had as much of an opportunity to make it work as Airbus. As much as I'd like to find fault with Airbus I can't. It's not unfair practices that Boeing could not meet Neelemans Delivery Slot needs, or Business Model. If Boeing is going to defend WN by the Sword, then they need to accept the results.
It's another example of Airbus doing a better job at thinking years down the road.

IMO we are seeing the same situation USAF Tanker program. You are going to see some (not all) 332 Tankers in the USAF. Because EADS is working their A** off to "get their nose in."

Anyway, we love the B6 Model!!!  Smile
To know your Enemy, you must become your Enemy.” Sun Tzu

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