leelaw
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JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 8:42 pm

JetBlue Airways may "modestly retard its growth" through retirement of its oldest aircraft or deferrals of new deliveries and could make an announcement to that effect as early as next week, JP Morgan analyst Jamie Baker speculated in a report released Monday.

http://atwonline.com/news/story.html?storyID=4754
Lex Ancilla Justitiae
 
roseflyer
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 9:44 pm

Retiring its oldest aircraft?!? That sounds pretty bad when they have so many A320s on order. It does look like jetBlue expanded wildly as it rapidly grew a new market segment, however now that their initial expansion is over, they are getting into new markets and facing problems. Hopefully jetBlue will continue to succeed, but it does have a lot of airplanes on order. I'm not an expert on airplane purchasing, but if they have to retire 5 year old planes in order to slow growth while taking new delivery of planes, I would question investing in jetBlue. Now Singapore Airlines does this, but I haven't seen any other airline retire such new airplanes.
If you have never designed an airplane part before, let the real designers do the work!
 
akjetBlue
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:12 pm

Quoting Leelaw (Thread starter):
JetBlue Airways may "modestly retard its growth" through retirement of its oldest aircraft or deferrals of new deliveries and could make an announcement to that effect as early as next week, JP Morgan analyst Jamie Baker speculated in a report released Monday.

*Note it says "speculated"

This is not a news report, this is speculation, just as everyone speculated the end of NW and DL, the merger of FL and Midwest, the fact that the A380 wouldn't fly or that no one would buy it, and of course there is the forever speculated retirement of the NW DC-9, do i really need to continue?

Just take everything you read with a grain of salt and remember that not everything you read is truth.

We're in an industry where the only constant is change, and everyone is always adapting.
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leelaw
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:16 pm

Quoting AkjetBlue (Reply 2):
Just take everything you read with a grain of salt and remember that not everything you read is truth.

Who says I don't, I merely posted an interesting item I found.
Lex Ancilla Justitiae
 
b777a340fan
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:20 pm

Quoting Leelaw (Thread starter):
retirement of its oldest aircraft

 Confused  Confused  Confused B6's aircrafts aren't "old". I thought they were one of the youngest in the market?

On a side note, has anyone tried to book a ticket on B6's website lately? The fares are through the roof!!! I thought it was a LCC? I ended up buying tix on UAL for $150 less a piece. Wow!
 
MaartenV
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:21 pm

Let's assume they do get rid of some of the older A320s. Are they leased or owned? It shouldn't be hard to sell or place them with another airline, since the demand for second hand modern narrowbodies seems to be pretty high. Just look at how quick all the ex-Indy A319s were placed.
Its all about supply and demand...
 
akjetBlue
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:26 pm

Quoting B777a340fan (Reply 4):
On a side note, has anyone tried to book a ticket on B6's website lately? The fares are through the roof!!! I thought it was a LCC? I ended up buying tix on UAL for $150 less a piece. Wow!

The Fare Bucket System!

Quoting Leelaw (Reply 3):
Who says I don't, I merely posted an interesting item I found.

Sorry, no offense meant, I was actually replying more to RoseFlyer's assumption that things were getting bad. Just didn't want everyone to think that there had been an "announcement" that we were selling our old airplanes for new ones. Some on here take everything they read on here for fact. Again appologies, no offense meant.
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leelaw
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:31 pm

Quoting AkjetBlue (Reply 6):
Again appologies, no offense meant.

Sorry, I misunderstood your intent...no apology is necessary.
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congaboy
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 10:54 pm

Yea, I read this earlier today as well, Leelaw. Not surprising that "Analysts" would speculate a slowing. It seems obvious that B6 would consider this. What I am struggling with is Neeleman's strategy. Two things that deviate from the LCC model he helped develop:
1/ Rapid expansion through new cities and acquiring aircraft
2/ Introducing two aircraft types...while the Embraers are rather economical and right-sized for given markets, you still have the costs associated with crews, mechanics, parts, etc.

I think they need to pull back, and they should have done this as soon as oil started spiking. Now they take a more defensive posture, which will be interesting because that is out of character for what we have seen from B6.
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DAYflyer
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Tue Apr 18, 2006 11:43 pm

Humm, I suspect that they retire these birds to forgo mx issues that are coming up on these birds.
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ScottB
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 12:05 am

Quoting AkjetBlue (Reply 2):
This is not a news report, this is speculation, just as everyone speculated the end of NW and DL, the merger of FL and Midwest, the fact that the A380 wouldn't fly or that no one would buy it, and of course there is the forever speculated retirement of the NW DC-9, do i really need to continue?

But there is an enormous difference between the speculation of random, uninformed posters on web sites like this one and an analyst report. Only the news item itself says that Jamie Baker "speculated" -- we haven't seen the actual report. Moreover, JBLU's management has specifically raised the possibility of slowing growth by deferring deliveries and/or retiring older aircraft.
 
supa7E7
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 12:22 am

Maybe JetBlue should just hunker down instead of growing. Adding A320s to their network will only trickle down to their worst markets, which clearly are money losers.

Growth is to increase your size above the profitabiltiy line. If you can't add profitable flying, you should not grow. Right now B6 can't even place their current fleet in profitable flying... so growth should make one leery.

The one wildcard here is the E190; IMO JetBlue has plenty of nice jobs for them to do.
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NWBOS
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 1:35 am

As others have mentioned, the major factor in this happening at B6 is the continued operation of the other majors without one going out of business and liquidating. B6 counted on this to happen (and I would say counted on US to go out of business specifically). So far it isn't the case. The other major carriers are continuing on cost cutting, albeit at a pace which isn't as fast as management would like. The point is that costs are continuing on a downward trend. It will be interesting to see how JetBlue will weather this storm. The unfortunate reality is that in order for true profitability to return to the majority of carriers, one airline has to fold --because capacity is still much higher than demand.

[Edited 2006-04-18 18:40:23]
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 1:41 am

Quoting B777a340fan (Reply 4):
B6's aircrafts aren't "old". I thought they were one of the youngest in the market?

I didn't think they're old either. This airline started flying in 2000. Since when is 6 years considered to be a long time for an aircraft to be in operation? There are planes that are considerably older and replacements for those birds are not talked about just yet...

Look at US fleet of A320s. They are roughly twice as old as B6's fleet; they came online in around 1996. Are they going to be retired or replaced??? I don't think so...
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flying_727
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 1:42 am

How old is their oldest A320? Tt can't be that old.
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dutchjet
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 2:58 am

A couple of rumors going around concerning the near-term future of JetBlue:

1. Look for revisions in the fare system, JetBlue is having trouble with its yields on certain routes.....with a lot of capacity on the Florida and Transcon routes, the fares had to go up.....ie, the end of $59 to Florida and $99 to the West Coast. Over the past few days, I have been hearing that, all of a sudden, JetBlue got very expensive and flights on JetBlue seem to cost more than on UA or CO on the competing routes. The public is confused, which is not good. Look for JetBlue to revise its fare system and bring new yield management systems in to place.....JetBlue just hired a yield management expert who is ex-Piedmont/US Airways to help. This is a big issue that needs resolution quickly: JetBlue must figure out how to keeps its planes filled with a good average yield and, at the same time, not upset its loyal customer base.

2. Regarding the fleet, the rumors are that JetBlue may defer the delivery of some A320s over the long term, and sell some A320s and E190s off of the delivery line in the near-term. Its still speculative.......what would happen is that JetBlue would sell aircraft scheduled for certain delivery dates to other airlines, but more likely a leasing company.....the newly built aircraft would go directly to the new operator and JetBlue would never take possession of the subject aircraft. What I heard is that JetBlue would like to cut A320 deliveries by half for the coming 12-18 months; I am not sure how many aircraft we are talking about, but an Airbus or JetBlue expert could probably figure it out. This is NOT the end of the world, many airlines have done this over the years......everyone from Delta to Lufthansa to Continental have pulled this trick.....airplanes are long lead time equipment, and sometimes deliveries come exactly at the wrong moment.

JetBlue will figure this out.....but it does look like the coming period will be a difficult transition for them.....all of a sudden, JetBlue is dealing with the same difficult issues that other US carriers must cope with, plus they must work on their pricing system.
 
panam330
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 3:22 am

Quoting Flying_727 (Reply 14):
How old is their oldest A320? Tt can't be that old.

N503JB (msn 1123), Bluebird. Delivered 12/01/1999.
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 3:41 am

Quoting Dutchjet (Reply 15):
What I heard is that JetBlue would like to cut A320 deliveries by half for the coming 12-18 months; I am not sure how many aircraft we are talking about, but an Airbus or JetBlue expert could probably figure it out.

That would definitely make sense to me if they did that. They have been expanding and adding new service rather rapidly and this expansion if continued will stretch the financial stability very thin for B6. I think this would be wise for them. Limit its deliveries and don't add city after city to the network with a short period of time.

Just a month ago, they added PIT and JAX service, last week they added CLT and one other city. WN added that many cities in one year a few times.

Quoting Dutchjet (Reply 15):
JetBlue will figure this out.....but it does look like the coming period will be a difficult transition for them.....

The coming period will be tough in deed for them as well as any other airline; they have good management there. Neeleman has been a terrific CEO for them, he has a great work ethic, and I have all the faith in B6 myself...
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luv2fly
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 3:54 am

Even AA is playing there hand this upcoming Summer very conservitively!

AA scales back typical summer expansion
American Airlines will hold back on the annual expansion of domestic routes it usually makes during the busy summer travel season. The move is part of the airline’s effort to break even for the first time in six years and is something that “will test rival U.S. carriers' new-found discipline of limiting additional capacity to push through fare increases,” writes the Financial Times/MSNBC. Even without AA's decision, domestic capacity has already fallen 3.9% over the past year. And with capacity being cut, flights are getting fuller -- with about 76% of available seats were filled last month. Planes flying at such full levels could start to present problems for airlines as the summer travel season gets under way. "We've reached about the limit of where we want to put load factors," says Jim Whitehurst, Delta's chief operating officer.

Posted at 08:03 AM/ET, Mar 28, 2006 in American | Permalink | Comments (6)
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TVNWZ
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 4:26 am

Neeleman has said publicly that he might sell some of the Airbis to other carriers thatthey are supposed to take delivery this year. another thread discussed this. Can't find it now, though. Sorry.
 
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chrisnh
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 4:45 am

I'm not saying this situation with jetBlue is or isn't like what happened with PeopleExpress (you know...fast--some would say too-fast--growth, etc.).

Just curious: Will those who say that this is an 'entirely different situation' please explain themselves?

Chris in NH
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 5:01 am

Quoting TVNWZ (Reply 19):
Neeleman has said publicly that he might sell some of the Airbis to other carriers thatthey are supposed to take delivery this year. another thread discussed this. Can't find it now, though. Sorry.

I wonder if US would like to take any of these birds, or if it even has the desire or need to do so...
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
N867BX
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 5:15 am

Little Jetblue, they needed the, um, never mind.
 
Junction
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 5:22 am

Quoting B777a340fan (Reply 4):
On a side note, has anyone tried to book a ticket on B6's website lately? The fares are through the roof!!! I thought it was a LCC? I ended up buying tix on UAL for $150 less a piece. Wow!

Contrary to popular belief, the term LCC (low cost carrier) is not related to ticket price. It simply means the carrier adopts a low cost operating model in order to maximize revenue.

[Edited 2006-04-18 22:36:05]
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 5:43 am

Quoting Junction (Reply 23):
Contrary to popular belief, the term LCC (low coast carrier) is not related to ticket price. It simply means the carrier adopts a low cost operating model in order to maximize revenue.

This does allow them to start fares at a lower rate due to the lower costs, but again, that does not always warant a cheap fare. Fares on LCCs depend on day, time of year, and time of day of travel, as well as any additional competition on that route...

I.E. US charged $217 one way minimum between PHL and PIT. Now it's $118 round trip after WN came in and lowered fares.

US charges upwards of $300 one way to LGA and BOS from PIT, but that might change when B6 starts service.

US is considered to be a LCC now that it has merged with America West. It has found a way of cutting its operating costs, and as much as I hate to say it, but dehubbing PIT was wise of US to do; it was too expensive an airport for them to operate a hub at, and it still is to some extent I am sure...

Regarding the increasing costs of jet fuel with the increase in the price of oil, look for fares to go up even higher so that airlines can still make money. Offering cheap fares all the time is not always the best way to make money. That will draw a lot of people, but you have to look at the business model here. Will that offset or outweigh the costs if you charge a certain fare on a given airline for a given route? If fares are too low, they could completely fill all of their planes on their routes and still come up short of the costs. This is likely why they have a certain number of seats that are worth that certain fare. Say on WN for example, between PHL and PIT, they have fares ranging from 49-90 dollars one way... They have x amount of seats at 49, y amount at 59, z amount at 69 and so on... I am sure that many of you get this concept and just ignor this if you do. This is for those who still think of a LCC as a low fare airline. I am probably going to get eaten up and spit out for this but I am prepared for the criticism here; I am no expert at this. These are all just thoughts based on other info on here regarding posts and links...
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RL757PVD
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 6:02 am

Quoting Junction (Reply 23):
Contrary to popular belief, the term LCC (low cost carrier) is not related to ticket price. It simply means the carrier adopts a low cost operating model in order to maximize revenue.

Something tells me that BOS JFK and LGA dont really fit that model, In addition, their HQ is in one of the most expensive areas in the country, meaning they have to pay their management more for cost of living.

Lets look at alot of other airline HQ's
PHX DAL IAH MCO ATL... all have much lower costs of living, meaning lower salaries required.

Lets look at troubled airline HQ's
WAS from US befroe the merger, IAD (DH) and NY/CT for B6, no one else is HQ'd up there.

Jet Blue is NOT an LCC and it is finally catching up with them.
Experience is what you get when what you thought would work out didn't!
 
TIA
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RE: JetBlue Seen Slowing Growth In Face Of Challen

Wed Apr 19, 2006 6:27 am

Quoting RL757PVD (Reply 25):
Jet Blue is NOT an LCC

While their costs are rising (as it was predicted by many people before), that statement is one of the funniest I have read here, since their CASM is one of the lowest in the industry.
 
RL757PVD
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 6:40 am

Quoting TIA (Reply 26):
While their costs are rising (as it was predicted by many people before), that statement is one of the funniest I have read here, since their CASM is one of the lowest in the industry.

It was really meant to be more of a dramatic closing that anything really, however with that said, a TRUE LCC will focus on cost minimizing as opposed to revenue maximizing. Many B6 busienss practicies and decisions go against the LCC model. The Low CASM can be tied to their young age.

Lets look 500 management employees in Florida or Texas vs New York/ CT
FL/TX $45,000/yr avg
NY/CT $55,000/ yr avg

$10,000 * 500 employees = $5million per year and thats just those salaries alone, nevermind office space and overhead. And that is before you even look at airport facilities costs.

There is a belief by some industry experts that the best way to maximize revenue is to minimize cost. There is no way to prove it, but Id say Airlines like WN focus on minimizing costs rather than maximizing revenues, and it works well for them.
Experience is what you get when what you thought would work out didn't!
 
JBLUA320
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 6:42 am

Quoting RL757PVD (Reply 25):
Something tells me that BOS JFK and LGA dont really fit that model, In addition, their HQ is in one of the most expensive areas in the country, meaning they have to pay their management more for cost of living.

Lets look at alot of other airline HQ's
PHX DAL IAH MCO ATL... all have much lower costs of living, meaning lower salaries required.

Lets look at troubled airline HQ's
WAS from US befroe the merger, IAD (DH) and NY/CT for B6, no one else is HQ'd up there.

Jet Blue is NOT an LCC and it is finally catching up with them.

You're kidding right? jetBlue employees are compensated well but compared to other airlines, the management at B6 is earning absolutely NOTHING! It's an apples to oranges comparison...

JBLU
 
JBLUA320
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 6:44 am

Quoting RL757PVD (Reply 27):
Lets look 500 management employees in Florida or Texas vs New York/ CT
FL/TX $45,000/yr avg
NY/CT $55,000/ yr avg

$10,000 * 500 employees = $5million

Are these arbitrary numbers? If not, what is your source?

JBLU
 
goingboeing
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 6:56 am

Quoting B777a340fan (Reply 4):
On a side note, has anyone tried to book a ticket on B6's website lately? The fares are through the roof!!! I thought it was a LCC? I ended up buying tix on UAL for $150 less a piece. Wow!

Didn't UAL just emerge from a 3 year stint in bankruptcy? Is this their plan profitablity?

Quoting NWBOS (Reply 12):
The other major carriers are continuing on cost cutting, albeit at a pace which isn't as fast as management would like. The point is that costs are continuing on a downward trend. It will be interesting to see how JetBlue will weather this storm. The unfortunate reality is that in order for true profitability to return to the majority of carriers, one airline has to fold --because capacity is still much higher than demand.

What is unfortunate is that because of the bankruptcy laws, the financially distressed carriers were able to be put on "life support" while the stronger ones got weaker trying to compete with the fire sale pricing that seemed prevelant among EVERY bankrupt carrier. Then, after they emerge, they are freed from a lot of the debt to "compete" anew. The really sad part is that it won't be US or UAL to fold (unless they make another trip to bankruptcy), nor will it likely be DAL or NWA...but the NEXT major carrier to file will become the "sacrificial lamb" for the industry. And the ironic thing is that the next major to enter bankruptcy most likely would have thrived had one of the early adopters of the "Chapter 11 competitive strategy" been allowed to fold.
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:15 am

Now that is a funny mentality to have. The next airline to go into bk likely to fold and essentially becomming a sacrafice to the industry. Love it. So basically the airline industry is this cult. In order to make this industry better, we sacrafice this airline to the airline gods. It could have done better, but it did not and now it must leave. The cult has spoken...  laughing  stirthepot 
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
JetBlueAUS
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:41 am

Quoting Junction (Reply 23):
Contrary to popular belief, the term LCC (low cost carrier) is not related to ticket price. It simply means the carrier adopts a low cost operating model in order to maximize revenue.

Exactly! When the carrier adopts the low cost operating model to maximize revenue it allows them to have low fares. Airlines that have slow turnarounds, multiple aircraft in their fleets, among other things it raises their maitenence cost, or makes them lose money, forces them to raise their ticket price. On the majors (such as Steeler83 mentioned) you have the different seats and a seat with more leg room, (Like on UA's Economy Plus) would definately cost a bit more than UA's Y-Cabin.

B6 was doing great until they added the E190. They had low costs, but right when they added another type of plane they had to raise fares to cover for the start-up costs of the E190's. Adding the E190 was a big mistake, but I respect their decision.

Quoting Steeler83 (Reply 24):
This is for those who still think of a LCC as a low fare airline. I am probably going to get eaten up and spit out for this but I am prepared for the criticism here; I am no expert at this. These are all just thoughts based on other info on here regarding posts and links...

Great explanation Steeler83.
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sllevin
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:46 am

This annoucement makes sense. With oil prices up yet again, B6's breakeven load factor is almost certainly above 90% -- adding capacity would just bleed money.

Steve
 
luv2fly
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:48 am

Quoting RL757PVD (Reply 25):
NY/CT for B6, no one else is HQ'd up there.

Jet Blue is NOT an LCC and it is finally catching up with them.

Please where B6 is HQ is hardly a favorable area! And unlike the other so called major carriers that have reservation centers that all cost rent and other operating costs, B6 has there reservationist work from home.
You can cut the irony with a knife
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:52 am

Quoting JetBlueAUS (Reply 32):
Great explanation Steeler83.

Oh, I'll be damned... For once I was not chewed up on here. Thanks, I am glad you enjoyed the post  
It took me a while to learn what a LCC is and how it works myself...

[Edited 2006-04-19 00:55:19]
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
b777a340fan
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 7:56 am

Quoting JetBlueAUS (Reply 32):
B6 was doing great until they added the E190. They had low costs, but right when they added another type of plane they had to raise fares to cover for the start-up costs of the E190's. Adding the E190 was a big mistake, but I respect their decision.

Didn't they learn anything form DH? Sigh  Embarrassment One of the biggest reason that DH went belly-up was because they could not create sufficient profits from regional routes, using Canadairs. Whether you have 100 passengers or 2 passengers, each aircraft still necessitates two pilots and "X" number of flight attendants.
 
spartanmjf
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 8:00 am

Quoting Leelaw (Thread starter):
JetBlue Airways may "modestly retard its growth" through retirement of its oldest aircraft

Well there is one way to avoid paying for D Checks..... Maybe Airbus or Embraer will just give 'em a couple because well the folks at B6 are just so nice.

Maybe NW would like to pick up a few....to replace the DC9 fleet....  duck 
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steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 8:21 am

Quoting Spartanmjf (Reply 37):
Maybe NW would like to pick up a few....to replace the DC9 fleet....

Someone on the thread regarding who will take AS MD80s made a statement regarding this, although it's a E135 and not the E90...
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
JBLUA320
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 8:46 am

Quoting B777A340Fan (Reply 36):
Whether you have 100 passengers or 2 passengers, each aircraft still necessitates two pilots and "X" number of flight attendants.

You are right, but the Canadair can't fly a large number of the routes the E190 can without stopping. The cost of the E190, which is not a regional jet, is much more advantageous than a CRJ, too.

JBLU
 
steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 8:59 am

Quoting JBLUA320 (Reply 39):
You are right, but the Canadair can't fly a large number of the routes the E190 can without stopping. The cost of the E190, which is not a regional jet, is much more advantageous than a CRJ, too.

That is true. The E90 has much better range, I believe up to at least 1500 or 2000 miles... Plus, I also believe that it seats between 90 and 100 people, but I could be wrong with that... The CR2 and 7 seat 50 and 70 respectively. Shorter range and generally fewer pax loads, that doesn't sound very economical if you ask me...
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luv2fly
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 9:18 am

Quoting Steeler83 (Reply 40):
Plus, I also believe that it seats between 90 and 100 people, but I could be wrong with that...

No you are correct the planes (E190's) hold exactly 100 seats.
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goingboeing
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RE: JetBlue Seen Slowing Growth In Face Of Challen

Wed Apr 19, 2006 9:20 am

Quoting Steeler83 (Reply 31):
Now that is a funny mentality to have. The next airline to go into bk likely to fold and essentially becomming a sacrafice to the industry. Love it. So basically the airline industry is this cult. In order to make this industry better, we sacrafice this airline to the airline gods. It could have done better, but it did not and now it must leave. The cult has spoken..

Actually, try reading threads about how Southwest and Jetblue are "whining about overcapacity, yet keep adding capacity". No, there is no overcapacity when there are fares that can fly you halfway across the country and back for $134. When it costs them $350 to fly the seat. And while they are in bankruptcy. But there IS overcapacity when a fare that actually results in a profit, however small, is charged. You let a UAL or a US fold, and I would submit to you that not only would Jetblue be in a stronger financial condition, but neither Delta or Northwest would be in bankruptcy court today. Because when "survival of the fittest" is actually allowed to play out, you could have an industry that is stronger. Because fares could become realistic without becoming outrageous.

But you look at what each and every bankrupt carrier has done....drastically slashed fares to keep butts in seats...and load factors at 80+%. And IMHO, it's really unfair to have airlines who meet their commitments and pay their bills have to compete with an airline that is offered "protection" from creditors...and turns around and shits all over the industry by selling their product for 4 cents per ASM when it costs them 11 cents to fly the seat.

True enough...it wouldn't be pretty for employees of a folded airline, but what's happening is that employees of healthier airlines are having to subsidize the industry by taking paycuts and furloughs to keep these bankrupt airlines in the air. And I really think that should another airline seek bankruptcy "protection", the court will be a lot harder on them, and not allow them to operate for 3 years under Chapter 11. It ain't pretty....but it's what the US Airline industry needs to begin to regain some semblance of health.
 
incitatus
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 9:26 am

Quoting RL757PVD (Reply 27):
$10,000 * 500 employees = $5million per year and thats just those salaries alone, nevermind office space and overhead. And that is before you even look at airport facilities costs.

Are you telling us JetBlewIt didn't know about this before they chose their HQ location?

I think JetBlewIt problems go all the way to the CEO. The guy has Attention Deficit Disorder. Is he paying attention? I confess I am out to  stirthepot  on this one. But a person who manages a large business needs many qualities - motivator, leader, etc. He/she also needs to absorb an inordinate amount of information in order to make the right decisions. JetBlewIt really seems to have gone out on a nap and woken up to $70/barrel oil too late.
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luv2fly
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 9:29 am

Quoting Incitatus (Reply 43):
I think JetBlewIt problems go all the way to the CEO. The guy has Attention Deficit Disorder. Is he paying attention?

He makes no bones about this, and he surrounds himself with strong people for that one reason.
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bond007
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 9:35 am

Quoting JetBlueAUS (Reply 32):
Exactly! When the carrier adopts the low cost operating model to maximize revenue it allows them to have low fares. Airlines that have slow turnarounds, multiple aircraft in their fleets, among other things it raises their maitenence cost, or makes them lose money, forces them to raise their ticket price.

Not necessarily. The purpose of a low-cost model is exactly that...to have low-costs in order to make a profit ...what an wild business idea! If LCCs just lowered their fares because of their lower costs, they'd be in the same shape as the legacies. Many of the LCC fares are similar to the legacy fares, and in some cases (WN for sure), they are higher on some routes...that's why they make money.

Unfortunately the legacies don't (or can't) raise their ticket prices to compensate for their higher costs...and they can't lower their costs ...that's why they are losing money.


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steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 9:37 am

That was just my way of putting what you said about the next airline to request bankruptcy protection. I must say, goingboeing, that last post there was very informative. If it does cost them $350 to fly one seat that distance, then why would they charge something that is not even half that???

For an airline to not operate for some extended time, that is harsh, but the airline industry is extremely unstable right now. That's the plain and simple, yet sad, truth...
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goingboeing
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 10:01 am

Quoting Steeler83 (Reply 46):
If it does cost them $350 to fly one seat that distance, then why would they charge something that is not even half that???

Two words...market share. Because the MCI-LAX flight has to go thru either DTW or MSP first...sure makes those "market share" numbers look great.
 
RL757PVD
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 10:18 am

Quoting JBLUA320 (Reply 29):

Are these arbitrary numbers? If not, what is your source?

These are just arbitrary #'s showing how where you base employees how it relates to cost of living is important. Isnt it interested how most airline HQ's are in areas with low cost of living. Exceptions to this...DH (gone) US (CH-11 2x, moved to PHX) and B6

Quoting Luv2fly (Reply 34):
Please where B6 is HQ is hardly a favorable area! And unlike the other so called major carriers that have reservation centers that all cost rent and other operating costs, B6 has there reservationist work from home.

The area may not be favorable, but its still very expensive. I am aware of their reservations dept working from home, and it shows some LCC thinking, but B6 still does not appear to be very cost conscious

Quoting Incitatus (Reply 43):
Are you telling us JetBlewIt didn't know about this before they chose their HQ location?

Id hope they did their homework, but that was also a different time in the industry


An airline cant be cost conscious in some area's and not in others. The LCC way is a business strategy, If you operate like an LCC, you need to follow the strategy of keeping costs low in all ways possible, not just some. Its not too late for B6, but they need to address these issues soon.
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steeler83
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RE: JetBlue Seen Slowing Growth In Face Of Challenges

Wed Apr 19, 2006 10:31 am

Quoting Luv2fly (Reply 41):
No you are correct the planes (E190's) hold exactly 100 seats.

Ah, then this is more or less a more modern DC9 jet more or less; one that is more economical, not to mention...
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