FA4B6
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B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 8:09 pm

"JetBlue in deal to sell A320 aircraft"

http://www.newsday.com/business/ny-b...36154.story?coll=ny-business-print

Neeleman says that because of strong interest from potential buyers, the original plan of selling 2 to 5 A320s will now definitly be 5.
"Leap! And the net will appear."
 
VivaGunners
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 9:21 pm

Any guesses on who will pick them up?
It must be someone interested in directv equipped seats, unless they are going to scrap them...
It will be interesting to see what happens.
Any ideas for a signature?
 
MaartenV
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 9:28 pm

Quoting VivaGunners (Reply 1):
It must be someone interested in directv equipped seats

Will they keep those seats?

Quoting VivaGunners (Reply 1):
unless they are going to scrap them

If they are frames with a lot of cycles, this could be a possibility, although the oldest B6 are from 1999 right? Which would be a bit young for scrapping.

I would bet my money on a Latin American airline or a European (second tier, charter or low cost) airline.
Its all about supply and demand...
 
richierich
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 10:59 pm

Quoting VivaGunners (Reply 1):
It must be someone interested in directv equipped seats, unless they are going to scrap them...

Scrapping a 5-6 year old aircraft? Unlikely in any case and definitely not true here.
As for the tv-equipped seats, wouldn't JetBlue pull them out first and sell a clean aircraft? Nobody buys a plane because they like the seats.
None shall pass!!!!
 
jetbluefan1
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 10:59 pm

Quoting MaartenV (Reply 2):
I would bet my money on a Latin American airline or a European (second tier, charter or low cost) airline.

Same here. I couldn't see any airline based in the U.S wanting to give B6 some extra cash.

How much are they selling them for?

JetBluefan1
 
hiflyer
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 11:23 pm

Too bad F9 runs the other motors...this would have been perfect for them. Same with Virgin America. I would agree that these may be going offshore and are probably older frames. I would suspect the Sat equip will be removed as well as the seats, refurbed, and used on the next 5 frames JetBlue does take.
 
daus
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 11:23 pm

Quoting JetBluefan1 (Reply 4):
Same here. I couldn't see any airline based in the U.S wanting to give B6 some extra cash.

There was a huge running discussion around YX wanting in on larger aircraft ASAP. YX and B6 don't compete much.
 
VivaGunners
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RE: B6 Reaches Preliminary Agreement To Sell 5 A32

Thu Jun 15, 2006 11:41 pm

Quoting MaartenV (Reply 2):
If they are frames with a lot of cycles, this could be a possibility, although the oldest B6 are from 1999 right?



Quoting Richierich (Reply 3):
Scrapping a 5-6 year old aircraft? Unlikely in any case and definitely not true here.

Sorry guys, my bad... of course i was referring to the direct-tv equipped seats, not to the planes, as something they could scrap or eliminate. The article says B6 expect to sell the planes for $20 millions each, so they are not scrapping them I guess...
Any ideas for a signature?
 
socalfive
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 11:46 pm

Quoting Daus (Reply 6):
There was a huge running discussion around YX wanting in on larger aircraft ASAP. YX and B6 don't compete much.

It wouldn't matter a rat's ass if they did. The highest bidder wins, period.
 
PlanesNTrains
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Thu Jun 15, 2006 11:53 pm

Quoting Socalfive (Reply 8):
It wouldn't matter a rat's ass if they did. The highest bidder wins, period.

It isn't a bidding war. There is no auction. While it would be irresponsible to not take the highest "offer", they certainly don't have a gun to their heads - if Virgin America said "Hey, we'll give you whatever the competition is offering, plus $1mil.", B6 has every right to say "Kiss mine."

-Dave
-Dave
 
socalfive
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 12:14 am

Quoting PlanesNTrains (Reply 9):
It isn't a bidding war. There is no auction. While it would be irresponsible to not take the highest "offer", they certainly don't have a gun to their heads - if Virgin America said "Hey, we'll give you whatever the competition is offering, plus $1mil.", B6 has every right to say "Kiss mine."

No, you're right, there is no formal 'auction'. But the aircraft are out on the market and the "Offers" are obviously coming in and it IS somewhat of a bidding war because the aircraft are in demand and when the offers stop coming in the sale will be made to the highest offer. The "Offers" are the gauge for the market and the value of the aircraft. Whether they compete with Jetblue or not is irrelevant. This is a publicly traded company not a playground exercise. As a stockholder in Jetblue I would expect the company to take a million more from "Virgin America" than a non-competing entity or have a hell of a good reason WHY. Like I said, it's not a playground exercise Dave, it's business.
 
PlanesNTrains
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 12:28 am

Quoting Socalfive (Reply 10):
Like I said, it's not a playground exercise Dave, it's business.

True, but the decision is not one dimensional either. The bottom line isn't just the price they get for the plane - it's the revenue they lose if it starts landing at JFK in VA colors shuttling back and forth to B6 hotspots.

I'm not sure if we really have a disagreement, but I do believe there is more to it than "Sold! To the highest bidder!". Like you said, it's business. They are just as accountable to shareholders if they make a bad "decision" as if they make a bad "sale".

Using your "it's business" quote, I'd say they are being paid to run a "business", not just manage a checking account. If there are implications to a sale that make a higher bid a bad decision, I would expect them (as a shareholder) to make the best decision in the big picture view.

-Dave
-Dave
 
WMUPilot
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 12:50 am

From what i've heard the planes aren't staying in the US. They should be going to an European carrier. I also belive they are working with the carrier to see if they want to become Direct TV customers so the TVs may stay in the seats.
JetBlue - Bringing humanity back to air travel
 
jetbluefan1
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 12:52 am

I agree with Dave. I honestly think that the sale of these planes will be determined by both the price as well as the buyer.

If Song had come up to JetBlue and asked them to install LiveTV on their planes, would JetBlue have done it? Absolutely not. It's the same thing as VA coming up to JetBlue and asking to buy their A320s. That's one reason B6 bought 100 E190s (with options for an additional 100) all at one time: to fill up capacity and therefore lock out the competition.

If you own a Marriott and also own a 100-acre property next door, are you going to sell it to a Sheraton or to a Motel 6?

JetBluefan1
 
socalfive
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RE: B6 Reaches Preliminary Agreement To Sell 5 A32

Fri Jun 16, 2006 1:03 am

Quoting PlanesNTrains (Reply 11):
True, but the decision is not one dimensional either. The bottom line isn't just the price they get for the plane - it's the revenue they lose if it starts landing at JFK in VA colors shuttling back and forth to B6 hotspots.

To some degree, I would agree with you if there was a start-up airline based at JFK offering to buy the planes. There is no such start-up in the works. Unless the airplane is scrapped it has the potential and probability to compete on some level with B6 if sold to an American carrier. I guarantee you this isn't a thought worrying Jetblue, five aircraft flying with a competitor would have a negligible impact on the bottom line. There's thousands of examples out there, a good one being several WN 733s leased from American several years ago, WN and AA "compete", especially now. The bottom-line equates to financial gain, or those too would have been scrapped. Point being, whoever wants these aircraft obviously need airplanes and if they don't get them from Jetblue they'll get them from another source and if they wind up competing against Jetblue, oh well, it'll happen one way or the other. It's just not something good management cares about. JetBlue is a formidable competitor and far from being vulnerable. They're taking steps now to adjust to the market forces and remain strong and resilient. Selling these five aircraft to a competitor won't put Jetblue into a competitive disadvantage no matter how you look at it.
 
JBLUA320
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 2:13 am

Maybe Vueling would take them since Neeleman is involved with them... how have they been doing?

JBLU
 
B757capt
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 2:48 am

What about Virgin America?????
The views written by this user are in no manner the views of my employer and should not be thought as such.
 
luv2fly
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 3:01 am

Quoting B757capt (Reply 16):
What about Virgin America?????

Virgin America has new planes, though no certificate to operate them.
You can cut the irony with a knife
 
luv2fly
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 3:02 am

You can cut the irony with a knife
 
jbmitt
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RE: B6 Reaches Preliminary Agreement To Sell 5 A32

Fri Jun 16, 2006 3:17 am

Quoting JetBluefan1 (Reply 13):
If Song had come up to JetBlue and asked them to install LiveTV on their planes, would JetBlue have done it? Absolutely not. It's the same thing as VA coming up to JetBlue and asking to buy their A320s. That's one reason B6 bought 100 E190s (with options for an additional 100) all at one time: to fill up capacity and therefore lock out the competition.

If you own a Marriott and also own a 100-acre property next door, are you going to sell it to a Sheraton or to a Motel 6?

I respecfully disagree with your logic. Jetblue could have provided LiveTV to Delta, knowing that Delta would pay them for it. Once in a contract they could set whatever prices, and if they so desired, price them out of the market. If JetBlue was confident in their product and knew that it was absolutely superior to Delta, I would imagine that they would have done that. However, that clearly is not the case.. the service between both is comparable. As I'm sure you know, JetBlue offers the same service to Frontier, most likely on the basis of little overlap.

Your hotel argument is also flawed. The opportunity cost of holding onto the undeveloped land must be considered. In the case of the Marriot vs Sheraton they are comparable, and the land would command a high price premium to sell. The added revenue would allow for a lower cost basis between both assuming all other factors were the same. Marriot vs Motel 6 serve different clientales and could co-exist (middle to high end vs budget traveller). Marriots' often offer restaurants, superior fitness facilities, and conference centers.

Lastly, an additional hotel would not enter a market without sufficient demand. Multiple hotels can often stimulate demand, however, there likely are other attractions, businesses, and restaurants supporting the growth. Corporote contracts are often enough to sustain hotels too.

//edit for spelling

[Edited 2006-06-15 20:29:43]
 
717-200
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 3:25 am

Quoting Socalfive (Reply 14):
To some degree, I would agree with you if there was a start-up airline based at JFK offering to buy the planes. There is no such start-up in the works. Unless the airplane is scrapped it has the potential and probability to compete on some level with B6 if sold to an American carrier. I guarantee you this isn't a thought worrying Jetblue, five aircraft flying with a competitor would have a negligible impact on the bottom line. There's thousands of examples out there, a good one being several WN 733s leased from American several years ago, WN and AA "compete", especially now.

Gee, I wonder if DL was thinking the same way when they decided to sell
some of their well used DC9-30's to a start-up carrier back in the early 90's
called Valujet?
72S 733 734 735 73G 738 742 752 763 E190 M82 M83
 
jetblueatjfk
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 4:31 am

Prabably going to Vueling since jetBlue owns a good percentage in them.

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SkyexRamper
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 5:11 am

*cough* midwest *cough*



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BH
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 5:18 am

Quoting JetBluefan1 (Reply 13):
If Song had come up to JetBlue and asked them to install LiveTV on their planes, would JetBlue have done it? Absolutely not.

Why not. LiveTV installs the XM on FL's a/c. LiveTV is a bussiness and need customers to make money just like airlines need passengers.
 
luv2fly
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 5:39 am

some top managers of Jetblue, leader in the American airline industry in innovation and quality.

Per the Vueling web site.
You can cut the irony with a knife
 
flashmeister
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 5:46 am

I'd think that B6 would absolutely love to sell LiveTV (the name of their product, not DirecTV) to DL. Major coup for them... B6 management knows that, while live IFE is a differentiator today, it can't stay that way forever. So, once it becomes widespread, which it will at some point, they're in a really good spot if they can reap some revenue from a service that lots and lots of different people use.

Now, from DL's perspective, any move to buy LiveTV from B6 would essentially give a competitor a piece of the revenue available on every DL flight. They might not be anxious to do that.

Airlines have owned lots of "service" companies like this. For example, LSG SkyChefs provides services to lots of different carriers, despite being (at least partially) owned by Lufthansa.
 
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litz
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RE: B6 Reaches Preliminary Agreement To Sell 5 A32

Fri Jun 16, 2006 6:00 am

Quoting WMUPilot (Reply 12):
From what i've heard the planes aren't staying in the US. They should be going to an European carrier. I also belive they are working with the carrier to see if they want to become Direct TV customers so the TVs may stay in the seats.

While the video distribution system in the planes could be reused, Direct-TV is not only a US only satellite provider (the signal footprint only covers North America), but it's also a NTSC video provider.

Using the existing system in Europe would require a different satellite provider and a conversion from NTSC to PAL.

Now, mind you, it's all digital, so such a conversion is likely a fairly simple thing to do.

- litz
 
floridaflyboy
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 7:17 am

Quoting JetBluefan1 (Reply 13):
If Song had come up to JetBlue and asked them to install LiveTV on their planes, would JetBlue have done it?

Actually, they probably would have. B6 owns the company that provides DirecTV on airliners and somehow F9's aircraft keep coming online with DirecTV.
Good goes around!
 
787kq
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 8:56 am

Quoting JetBlueAtJFK (Reply 21):
Prabably going to Vueling since jetBlue owns a good percentage in them.

Is that confirmed, though it is likely? Their website only notes that V.A. Investors ,led by Dave Barger, president of JetBlue Airways, owns 7%.
 
jetblueatjfk
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 10:23 am

Quoting Floridaflyboy (Reply 27):
Actually, they probably would have. B6 owns the company that provides DirecTV on airliners and somehow F9's aircraft keep coming online with DirecTV.

Wrong. The only reason B6 bought LiveTV was so Song could not use it and they didn't know about any other companies that provided live tv to aircraft so they thought if they bought LiveTV instead of using them then Song would not be able to have Tv's. Then Song used a different company. This is all true and from Blue Streak by Barbara S Peterson.

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N1120A
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 10:38 am

Quoting Daus (Reply 6):
There was a huge running discussion around YX wanting in on larger aircraft ASAP.

Given the amount of money YX owes Boeing, I have my doubts about them taking Airbus aircraft

Quoting JetBlueAtJFK (Reply 29):
The only reason B6 bought LiveTV was so Song could not use it and they didn't know about any other companies that provided live tv to aircraft so they thought if they bought LiveTV instead of using them then Song would not be able to have Tv's. Then Song used a different company. This is all true and from Blue Streak by Barbara S Peterson.

If this is true, then you are talking pure shortsighted stupidity. The people at jetBlue had to know that Dish Network would provide a competing product to DirecTV and that another IFE company would be able to use satellite technology to recieve the signal. According to jetBlue at the time, the reason they bought LiveTV was because a cost benefit analysis showed them saving nearly as much money as they were spending by simply owning the company as well as being able to sell to other carriers, as they have done with WestJet and Frontier.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
jetbluefan1
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 10:41 am

Quoting Floridaflyboy (Reply 27):
somehow F9's aircraft keep coming online with DirecTV.

The contract with F9 was signed before B6 bought up LiveTV, actually.

In any case, my point is that B6 can choose who sell its products to. Basically, they should sell wisely. Obviously the top brass at B6 has much more insight than we here at a.net do, so I'm sure that they'll make the right decision (which could be either my opinion or the contradicting opinion).

JetBluefan1
 
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TVNWZ
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 11:19 am

They will sell to whomever pays them the most. Period.
 
iluv2pilot
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Fri Jun 16, 2006 11:19 pm

Why sell capacity? Are they reducing it or using other aircraft. I can't see how this benefits them other than giving them cash and freeing up maintenance resources?
 
flashmeister
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 2:46 am

Quoting JetBlueAtJFK (Reply 29):
The only reason B6 bought LiveTV was so Song could not use it and they didn't know about any other companies that provided live tv to aircraft so they thought if they bought LiveTV instead of using them then Song would not be able to have Tv's. Then Song used a different company. This is all true and from Blue Streak by Barbara S Peterson.

jetBlue purchased LiveTV in September 2002. (See press release) They paid $41 million for the company.

If the move was only to prevent Delta from using LiveTV, and Delta was serious about it in the first place, Delta could have easily scraped up a higher bid than jetBlue could have. Remember that, at the time, Delta wasn't quite yet in its current tailspin and was a good three years from Chapter 11.

I don't believe for a minute that B6 bought LiveTV to block DL. If that's the case, then why allow FL to buy service? That contract was signed well after the B6 acquisition.
 
mrcomet
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 3:00 am

There are 76 Airbus A320s for sale or lease that are listed on www.globalplanesearch.com including some built last years. That means there is probably another 50 or more that can be found by a motivated buyer. Nobody is going to come run drooling for these planes. I bet B6 sells them cheap to keep them out of the desert.
The dude abides
 
flyabunch
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 3:30 am

One of the continuing discussions about B6's early success was there use of new planes that did not need much maintenance. With planes that are now 6 or 7 years old is this there way of avoiding having to pay for D checks? Seems like a pretty radical way to control costs. I would think that any buyer would factor in those upcoming costs before making an offer.

And, isn't B6 still taking delivery of new 320's? So, they are not really going to lower there capacity that much by selling, they are just going to slow the growth.

Mike
 
iluv2pilot
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 6:19 am

Quoting Flyabunch (Reply 36):
And, isn't B6 still taking delivery of new 320's? So, they are not really going to lower there capacity that much by selling, they are just going to slow the growth.

I don't get it either.
 
dutchjet
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 6:36 am

Quoting Flyabunch (Reply 36):
One of the continuing discussions about B6's early success was there use of new planes that did not need much maintenance. With planes that are now 6 or 7 years old is this there way of avoiding having to pay for D checks? Seems like a pretty radical way to control costs. I would think that any buyer would factor in those upcoming costs before making an offer.

And, isn't B6 still taking delivery of new 320's? So, they are not really going to lower there capacity that much by selling, they are just going to slow the growth.

Mike



Quoting Iluv2pilot (Reply 37):

I don't get it either.

As you probably know, JetBlue has a lot of aircraft on firm order, both A320s and E jets.......as you also probably know, JetBlue has run into a bit of trouble with its expansion plans; JetBlue is keeping its planes filled, but the yeilds are off and $70/bbl fuel is certainly not helping. JetBlue has, until recently, been focusing on some longerhaul segments, such as transcons, which is hurting JetBlue's financial preformance.......using an A320 for one turn on a BOS or JFK to OAK return per day does not generate enough cash. Before we get sidetracked, the world is not coming to an end, JetBlue will survive, and the airline will adjust its business model to figure this out, but its fair to say that JetBlue has run into some turbluence and must make some changes.

Thus, JetBlue is slowing expansion a bit buy selling off a small number of A320s, this apporach will take some capacity out of the system (a few aircraft will leave the fleet while JetBlue continues to take new deliveries), keep the fleet very young, and JetBlue will avoid some expensive costs for heavy maintaince (however, we must expect that this will be reflected in the sales prices for the A320s). Balancing is a good word to describe what JetBlue is doing. In addition, JetBlue is slowing down the delivery of some future A320 deliveries and we will probably get more details about that in the near future.
 
B6JFKH81
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 6:49 am

Quoting Dutchjet (Reply 38):
Thus, JetBlue is slowing expansion a bit buy selling off a small number of A320s, this apporach will take some capacity out of the system (a few aircraft will leave the fleet while JetBlue continues to take new deliveries), keep the fleet very young, and JetBlue will avoid some expensive costs for heavy maintaince (however, we must expect that this will be reflected in the sales prices for the A320s). Balancing is a good word to describe what JetBlue is doing. In addition, JetBlue is slowing down the delivery of some future A320 deliveries and we will probably get more details about that in the near future.

This is very true. While we are selling off a few A320's and slowing deliveries on them as well, the A320 fleet is still slated to grow, just not as rapidly as the E190 at this point as the short to mid-range markets are working nicely.
"If you do not learn from history, you are doomed to repeat it"
 
akjetBlue
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 7:14 am

Quoting Flyabunch (Reply 36):
And, isn't B6 still taking delivery of new 320's? So, they are not really going to lower there capacity that much by selling, they are just going to slow the growth.

Correct, we just received N638JB and N231JB a few days ago. We will deffer a few A/C starting next year through 2009, only A320s 190s will continue on schedule with no deferals.
Save a horse! Ride a Cowboy!
 
iluv2pilot
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 7:35 am

So the idea is the New planes are cheaper to support? They get cash for the old and have warranty on the new?
 
dutchjet
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RE: B6 Reaches Preliminary Agreement To Sell 5 A320s

Sat Jun 17, 2006 7:42 am

Quoting Iluv2pilot (Reply 41):
So the idea is the New planes are cheaper to support? They get cash for the old and have warranty on the new?

As pointed out, its PART of the equation.......the bottom line is that JetBlue has too much capacity coming into its system: it has decided to cutback a small portion of its A320 fleet by selling a handful of airframes and delaying delivery on some ordered A320s, an adjustment to its fleet.

And, dont be counting the cash from the sale of the A320s that JetBlue is looking to sell.....most of the sales proceeds will go to reducing outstanding debt and other financial obligations which will ease the way for JetBlue to accept delivery of new aircraft.