First off, I want to congratulate JetBlue for its excellent service throughout the country and deserves just as much respect as the rest of the carriers in the U.S. Yes, it does have its distinct problems, just like the rest of the carriers in the United States. But, they are persevering and correcting the mistakes that they have made in the past.
JetBlue has run into significant turbulence as it posted its second consecutive loss. The loss was 32 million dollars, and the company does not expect to be profitable for the rest of the year. The company has blamed it on the high fuel costs, as it is paying nearly two dollars a gallon. Its load factor was 84.4% while its completion factor was a stunning 99%! Sadly, its on-time rating was 70.6%, which still isn't great but is slightly better than its 65.4% on-time rating last quarter. How will JetBlue return to profitability with these high load factors? Will the 'Return to Profitability Plan' be enough? Or will they be another great success, quick fall airlines like PeopleExpress?
Well, I honestly think, the 'Return to Profitability Plan' will help them a lot. Sure, their oldest A320's are only 5-6 years old but that doesn't necessarily mean that their maitenance costs are low. By deferring their ordered A320's definitely slows down their expansion rate which will help them gain ground in the areas which they have so rapidly expanded in, and also cuts down on any heavy maitenance costs. While expanding east of the Mississippi is smart, I think JetBlue should focus on the markets that it already has, or will have and build a better reputation there, so it can add flights which could potentially help profitability. The E190 is beginning to show success, since its debut in November 2005, and is improving steadily.
I think B6 is on the right track, and I can see a very small loss next quarter or and by Q3 return to profitability. What do you think?