FA4B6
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JetBlue Sees Near Break-Even 3Q

Fri Sep 22, 2006 10:56 pm

Very interesting!

http://www.chron.com/disp/story.mpl/ap/fn/4205175.html

"NEW YORK — Low-cost carrier JetBlue Airways Corp. said it expects a third-quarter pretax profit margin of between negative 1 percent and 1 percent, as unit costs are growing about as fast as unit passenger revenue, according to an investor update filed with the Securities and Exchange Commission Thursday."
"Leap! And the net will appear."
 
J32driver
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:24 am

Thought this was in the notes of the 2nd quarter statement. It says its what analcysts expected. Whats the news?
 
DL4EVR
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:39 am

Wow...amazing!!! While B6 is struggling to break even, all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.
We Love To Fly And It Shows.
 
WMUPilot
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:48 am

Quoting DL4EVR (Reply 2):
Wow...amazing!!! While B6 is struggling to break even, all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.

It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.
JetBlue - Bringing humanity back to air travel
 
nuggetsyl
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:55 am

To break even in the 3Q is nothing to be happy about.
 
DL4EVR
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:56 am

Quoting WMUPilot (Reply 3):
charge your customers huge sums of money to fly.

Are you kidding me with this one? Delta as well as all of the majors continuously match jetblue's (as well as other competing LCCs) fares!! So unless you're trying to imply that B6 also gauges its customers, that's a moot point.
We Love To Fly And It Shows.
 
WMUPilot
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:58 am

Quoting DL4EVR (Reply 5):
Are you kidding me with this one? Delta as well as all of the majors continuously match jetblue's (as well as other competing LCCs) fares!! So unless you're trying to imply that B6 also gauges its customers, that's a moot point

If it weren't for the low cost carriers, B6, WN, FL, NK, the majors would still be charging outragous prices for their tickets. The only reason for price matching is because of the LCCs.
JetBlue - Bringing humanity back to air travel
 
panamair
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 2:14 am

Quoting WMUPilot (Reply 3):
charge your customers huge sums of money to fly.

B6 is a business, just like every airline out there. Management's responsibility should be to maximize profits and value for the shareholder; they should be charging as high as they possibly can afford to in order to maximize revenues, etc. If you were a shareholder, you would want management to pursue all avenues of increasing revenues and lowering costs as well. Airlines are not charities; they don't charge lower fares because they're concerned about your pocketbook - they do those things, when necessary, to gain market share, to improve their loads, etc.
 
DL4EVR
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 2:15 am

Quoting WMUPilot (Reply 6):
If it weren't for the low cost carriers, B6, WN, FL, NK, the majors would still be charging outragous prices for their tickets

Yes, and they'd also be turning over $500 Million profits annually as well as providing decent in flight service. Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"
We Love To Fly And It Shows.
 
WMUPilot
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 2:34 am

Quoting DL4EVR (Reply 8):
Yes, and they'd also be turning over $500 Million profits annually as well as providing decent in flight service. Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"

I agree that everybody loves low fares, and fares too low is a bad thing, airlines aren't greyhound (maybe southwest duck  Wink. Hopfully the day of $900 walk up fares are a thing of the past and it can come more reasonable, but every once in a while they sneak in there.

I had a rather lengthy discussion a while ago with several crewmembers from other airlines about bringing back regulation. Set the airfares to cover the cost to the airlines plus some and let the carriers battle it out of the service front. Just about every airline, on the domestic front, offer a great coach class product. Pretty soon the advantage JetBlue had as far as inflight service will be nil as other carriers have started to realize that customers want stuff to do on a transcon flight. I believe that United is even looking to put XM Radio into their aircraft. We have to find to ways to stay ahead.

Back to the OP, we knew at the beginning of the year the 3Q was going to be tough. Weaker demand and higher fuel prices where going to make this a very very tough quarter for us. Looking ahead, with the cost cutting procedures that we have in place 4Q and 2007 are looking very well indeed. Mainly not only for JetBlue but the industry as a whole.
JetBlue - Bringing humanity back to air travel
 
jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 2:52 am

Quoting WMUPilot (Reply 3):

It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.

Last I can recall...AA, UA, and CO aren't in bankruptcy and pay their bills also...and have competing fares with B6 as well as provide international transatlantic/transpacific flights....

Sure LCCs have their place...but its the kool-aid drinking which I find to be a bit funny.... Smile
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n844aa
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 3:09 am

Quoting WMUPilot (Reply 3):
It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.

Note that AA has never been in bankruptcy, and they're doing decently well right now. Just sayin'.

Also, anecdotally, the last few times I flew a route that B6 served, the legacies were either the same price or less expensive. I'd like to try B6 one of these days, but I can't imagine paying a premium to do so.
New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
 
MiCorazonAzul
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 3:56 am

Quoting DL4EVR (Reply 2):
all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.

at who's expense??? THEIR EMPLOYEES. Go talk to any employees of these bankrupt airlines and they will tell you horror stories of what they are going through just to return to profitability. Jetblue on the other hand hasn't cut our pay or anything like that.

Quoting DL4EVR (Reply 8):
Yes, I like low fares. But the airlines are in business to make $$$, not to lose money on flights just so they can provide "low fares"

which is PRECISELY why legacy carriers are in trouble. With airlines like Jetblue bringing in low fares, they are trying to match us and in turn LOSING money left and right. Why you may ask? Because their cost structure is not like JetBlue's so they can't afford to offer those low fares but they are forced to just to stay in competition.
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ScottB
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:04 am

Quoting WMUPilot (Reply 3):
force your employees take massive paycuts

Massive paycuts which bring them down to (or slightly above) JetBlue's pay rates. When US Airways sought paycuts in their second bankruptcy, the proposed pay rates were modeled on jetBlue and America West pay rates.

Quoting MiCorazonAzul (Reply 12):
Jetblue on the other hand hasn't cut our pay or anything like that.

But you were already making less than pretty much anyone outside the regionals.
 
jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:10 am

Didn't some Legacy carriers comment on weak August revenue as well? I believe US was one of them. Hm. Maybe - just maybe - this has something to do with Hurricane Ernesto and the security alert due to the foiled London bombing plot.

But that's just a guess... Yeah sure

JetBluefan1
 
jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:13 am

Quoting MiCorazonAzul (Reply 12):
at who's expense??? THEIR EMPLOYEES. Go talk to any employees of these bankrupt airlines and they will tell you horror stories of what they are going through just to return to profitability. Jetblue on the other hand hasn't cut our pay or anything like that.

AA hasn't filed for bankruptcy, CO hasn't been there in a long time..and B6 has been around for only 6-7 years...yet their expenses have been increasing as if they have been around for many more years....

"with unit costs up 13 percent to 15 percent."
"Up the Irons!"
 
jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:18 am

Quoting Jacobin777 (Reply 15):
"with unit costs up 13 percent to 15 percent."

I'm just going to state the facts here: unit costs are up significantly because of the integration of the E190s into the fleet, which obviously have a much higher CASM than the A320. The other reason is because of the increase in oil, which was significantly higher this past 3Q than last 3Q.

Of course, there are some non-fuel, non-E190 increases such as labor and maintenance, but those are minimal. In other words, the bulk of the increase is due to the E190s and fuel.

JetBluefan1
 
Jerseyguy
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:20 am

Quoting Jacobin777 (Reply 10):
have competing fares with B6 as well as provide international transatlantic/transpacific flights....

Thats part of the reason that other carriers are making a profit, international flights with no LCC competition. You don't think that all this international expansion is a fluke do you?

You also have the domestic routes without LCC competition.
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F9Animal
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:23 am

I was kind of surprised they did not report a good chunk of profit. But.....

B6 is adding new markets, and to make instant profits on new routes is unheard of. B6 is still growing like crazy, and while growing, sometimes it drains on the profits. You have to invest in your business to make money. That is exactly what B6 is doing, investing into bigger and better things.

Plus, the price of fuel is coming down. Expect to see B6 take a hedge around $50-$55 pbl. If it goes lower than that, then expect most airlines to take advantage of it. The fuel has to have taken a hit on B6's bottom lines.

Just my opinion of course. I would suspect many to start bashing away, and talking trash about B6 going out of business. Sorry to those that think that, as B6 has a long way to go before shutting down. LOL!

GO B6!!
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TransWorldSTL
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:23 am

Quoting JetBluefan1 (Reply 14):
this has something to do with Hurricane Ernesto

Ernesto was a big flop though...
 
jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:26 am

Quoting TransWorldSTL (Reply 19):
Ernesto was a big flop though...

That doesn't matter. FLL and PBI were still closed for a day, and many people had to be rebooked. Not to mention that it did have an impact on immediate bookings for the next few days as SoFl got back on its feet.

JetBluefan1
 
panamair
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:35 am

Quoting JetBluefan1 (Reply 14):
Didn't some Legacy carriers comment on weak August revenue as well? I believe US was one of them. Hm. Maybe - just maybe - this has something to do with Hurricane Ernesto and the security alert due to the foiled London bombing plot.

Yes, domestic mainline RASM is estimated to have grown about 8.5% in August, whereas original analyst expectations were in the 10-11% range. Here's an article:

http://www.thestreet.com/_yahoo/news...cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

US is expected to have the highest rate of RASM growth in August - at 11-12%, followed by NW and DL at 10-11% each.
 
ca2ohHP
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 4:41 am

Even PeopleExpress had some good quarters  crossfingers 
 
TransWorldSTL
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:08 am

Quoting JetBluefan1 (Reply 20):
That doesn't matter. FLL and PBI were still closed for a day, and many people had to be rebooked. Not to mention that it did have an impact on immediate bookings for the next few days as SoFl got back on its feet.

It does matter.. IF Ernesto was some huge hurricane that stopped tourism for a long period of time in Florida, then yes, it could be a major factor in B6's profits.. But if B6's entire profit margine relies on one day of flights to two airports in Florida, then god help them!
 
TransWorldSTL
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:17 am

Quoting JetBluefan1 (Reply 16):
In other words, the bulk of the increase is due to the E190s and fuel.

Well, thats still a problem isn't it?
 
jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:25 am

Quoting TransWorldSTL (Reply 24):
It does matter.. IF Ernesto was some huge hurricane that stopped tourism for a long period of time in Florida, then yes, it could be a major factor in B6's profits.. But if B6's entire profit margine relies on one day of flights to two airports in Florida, then god help them!

I never said that B6's entire profit margin relies on one day of flights to two airports in Florida. It's simply a contributing factor, as well as the days surrounding the hurricane - very important ones, I may add, as Labor Day Weekend was just a week after. Not to mention that RSW was impacted as well.

Quoting TransWorldSTL (Reply 25):
Well, thats still a problem isn't it?

Yes it is. I never said it wasn't. I was simply explaining where the bulk of the increased costs are coming from: fuel and E190 integration. (Actually, to be frank, I wouldn't call the E190 integration a problem, but fuel certainly is.)

Happy flying!

jetBluefan1
 
WMUPilot
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:26 am

Quoting TransWorldSTL (Reply 25):
Well, thats still a problem isn't it?

No it's not!!!  bigthumbsup 

We have seen an increase in costs related to the 190s. The 190 has been going through some serious software issues and it is taking time and money to get these problems sorted out. The dispatch reliability for the 190 has started to increase and it looks like we are starting to see the light at the end of the tunnel.

It looks like the 190s did come in at a poor time in hindsight. Rising fuel prices and a tough winter really hurt the bottom line. Where the 190s a bad choice? I don't think so but it seems the jury is still out. They just may have come in at the wrong time.
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EA CO AS
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:29 am

Quoting MiCorazonAzul (Reply 12):
Jetblue on the other hand hasn't cut our pay or anything like that.

...yet.  duck 

Quoting F9Animal (Reply 18):
B6 is adding new markets, and to make instant profits on new routes is unheard of. B6 is still growing like crazy, and while growing, sometimes it drains on the profits.

B6's problem is that they've already picked the low-hanging fruit. Their niche to date has been fairly long stage lengths in markets with large O&D numbers, with high aircraft utilization to spread their costs over more ASMs.

Any expansion will be in markets with lower O&D and less stage lengths, which means higher overall CASM and lower overall aircraft utilization.

They've got an uphill battle ahead of them, to be sure.

Quoting F9Animal (Reply 18):
Expect to see B6 take a hedge around $50-$55 pbl.

IIRC, B6 is already hedged at a price of $60.00/bbl, but I don't remember how much.
"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
 
TransWorldSTL
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:30 am

Quoting JetBluefan1 (Reply 26):

I never said that B6's entire profit margin relies on one day of flights to two airports in Florida.

It was implied.

I've come to realize it's impossible to get the B6 cult members to believe any of the facts against their beloved airline.. Costs are catching up to B6, but you all can't seem to understand that.
 
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mariner
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:34 am

Quoting EA CO AS (Reply 28):
IIRC, B6 is already hedged at a price of $60.00/bbl, but I don't remember how much.

Oil did a swan dive below $60 today before coming back up for air to finish at $60.25.

It is thought there will be a serious test of the $60 floor next week - barring any more disasters in the world.

mariner
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jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 5:59 am

Quoting TransWorldSTL (Reply 29):
It was implied.

Nope. Not at all. Hurricane Ernesto was a contributing factor. The biggest issue was the security threat.

Quoting TransWorldSTL (Reply 29):
Costs are catching up to B6, but you all can't seem to understand that.

Please do not stereotype. I'm the one who pointed out where the rising costs are coming from. I never denied that rising costs are actually occurring.

JetBluefan1
 
TransWorldSTL
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 6:07 am

Quoting WMUPilot (Reply 3):
It is amazing how easy it is to make a profit when you don't have to pay your bills, force your employees take massive paycuts, and charge your customers huge sums of money to fly.



Quoting WMUPilot (Reply 6):
The only reason for price matching is because of the LCCs.



Quoting MiCorazonAzul (Reply 12):
With airlines like Jetblue bringing in low fares, they are trying to match us and in turn LOSING money left and right. Why you may ask? Because their cost structure is not like JetBlue's so they can't afford to offer those low fares but they are forced to just to stay in competition.



Quoting JetBluefan1 (Reply 14):
Didn't some Legacy carriers comment on weak August revenue as well?



Quoting JetBluefan1 (Reply 31):
Please do not stereotype. I'm the one who pointed out where the rising costs are coming from. I never denied that rising costs are actually occurring.

But you see, the cult members, instead of simply saying "yes, B6 doesn't exactly know how to handle it's growing costs due to aging fleets, and workforces", you all stab back saying "But Airline XYZ does this and that". This thread wasn't about XYZ Air, it's about B6.
 
jetbluefan1
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 6:20 am

Quoting WMUPilot (Reply 9):
Back to the OP, we knew at the beginning of the year the 3Q was going to be tough. Weaker demand and higher fuel prices where going to make this a very very tough quarter for us. Looking ahead, with the cost cutting procedures that we have in place 4Q and 2007 are looking very well indeed. Mainly not only for JetBlue but the industry as a whole.



Quoting F9Animal (Reply 18):
The fuel has to have taken a hit on B6's bottom lines.



Quoting WMUPilot (Reply 27):
We have seen an increase in costs related to the 190s.

Heck, this thread was even started by a B6 Crewmember:

Quoting FA4B6 (Thread starter):
Very interesting!

http://www.chron.com/disp/story.mpl/ap/fn/4205175.html

"NEW YORK — Low-cost carrier JetBlue Airways Corp. said it expects a third-quarter pretax profit margin of between negative 1 percent and 1 percent, as unit costs are growing about as fast as unit passenger revenue, according to an investor update filed with the Securities and Exchange Commission Thursday."

The reason that some people have turned around and "attacked" other airlines is because others attacked JetBlue first, such as:

Quoting DL4EVR (Reply 2):
Wow...amazing!!! While B6 is struggling to break even, all of these bankrupt airlines and the rest of the legacy carriers are STILL turning over profits.

While there are some posts by pro-B6 members that I certainly disagree with, there are some that I do agree with. It should be obvious by now that I am very down-to-earth about JetBlue's doings. What JetBlue does and what I want them to do may be two different things. But I find it hard to believe that I'm unwilling to accept that their costs are going up just because I'm in this "B6 cult" that you have referred to. I refuse to be part of a stereotype simply; I'm an individual with his own opinions and views.

JetBluefan1
 
planemaker
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 6:24 am

Quoting EA CO AS (Reply 28):
Any expansion will be in markets with lower O&D and less stage lengths, which means higher overall CASM and lower overall aircraft utilization.

None of the above is in any way remarkable... it applies to all airlines. It seems that almost everyone is fixated just on CASM and compeletely ignores RASM. For examplu, big deal if the transcon CASM is 7 cents if RASM is only 9 cents versus CASM of 10 cents but RASM of 13 cents on shorter stage lengths.
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jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 6:58 am

Quoting JetBluefan1 (Reply 16):
I'm just going to state the facts here: unit costs are up significantly because of the integration of the E190s into the fleet, which obviously have a much higher CASM than the A320. The other reason is because of the increase in oil, which was significantly higher this past 3Q than last 3Q.

The fact the E190's have a higher CASM won't help their their CASM average..but I assume it will help their bottom line...

Besides WN...oil has affected every carrier, yet they are making money......

fair use excerpt:

" "The company, in our view, faces significant revenue challenges given its rapid growth plans despite a slowing economy," Merrill Lynch analyst Michael Linenberg said."

" In a filing late on Thursday, the New York-based airline said it expected a 2006 pretax profit margin of negative 2 percent to break-even. That's one percentage point lower than a forecast range from July 25."

http://biz.yahoo.com/rb/060922/airlines_jetblue.html?.v=5

Quoting JetBluefan1 (Reply 16):

Of course, there are some non-fuel, non-E190 increases such as labor and maintenance, but those are minimal. In other words, the bulk of the increase is due to the E190s and fuel.

labour increases at B6 haven't been minimal..they are one of the fastest growing expenses at B6

fair use excerpt:
"Labour costs at the non-union airline rose 22% as it hired workers to fly its new Embraer regional jets. Just like every other struggling player in today's airline industry, fuel and labour were its largest expenses."**

**-flightinternational.com

Quoting Jerseyguy (Reply 17):
Thats part of the reason that other carriers are making a profit, international flights with no LCC competition. You don't think that all this international expansion is a fluke do you?

Um... no .....they are expanding internationally because there are more profits to be made.....but legacy carriers are making money on domestic flights also....

Quoting TransWorldSTL (Reply 25):

Well, thats still a problem isn't it?

 checkmark 

Quoting EA CO AS (Reply 28):

B6's problem is that they've already picked the low-hanging fruit. Their niche to date has been fairly long stage lengths in markets with large O&D numbers, with high aircraft utilization to spread their costs over more ASMs.

 checkmark 

Quoting EA CO AS (Reply 28):
IIRC, B6 is already hedged at a price of $60.00/bbl, but I don't remember how much.

" JetBlue increased its fourth-quarter fuel hedge in recent weeks. It said it had hedged 51 percent of its estimated fourth-quarter jet fuel consumption compared with 31 percent as of July 25.

It is protected against a rise in prices, starting at $2.15 a gallon in jet fuel and $67 a barrel in oil."

http://biz.yahoo.com/rb/060922/airlines_jetblue.html?.v=5
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ikramerica
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 7:43 am

Quoting N844AA (Reply 11):
Also, anecdotally, the last few times I flew a route that B6 served, the legacies were either the same price or less expensive. I'd like to try B6 one of these days, but I can't imagine paying a premium to do so.

Now that B6 is on Travelocity and other sites, this is made crystal clear. I've been saying this for a while, and everyone says I'm crazy. But now we can compare, and B6 doesn't seem to offer a discount except for the walk-up fare, which is still HIGHER than the advance fare. It only benefits those who don't plan in advance, as I do plan in advance and I'm not willing to pay "less-more" to walk up on B6.

In advance, B6 can be $20, $30, $50 more than CO or DL. The B6 LCC premium?
Of all the things to worry about... the Wookie has no pants.
 
Jerseyguy
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 8:14 am

Quoting Jacobin777 (Reply 35):
they are expanding internationally because there are more profits to be made.....but legacy carriers are making money on domestic flights also....

Pretty easy to do when your charging more than triple the fare for one ways where there is no LCC competition (example DL to SLC from JFK $158 EWR $548) Round trip fares are crazy too. How bout fares like $443RT from JFK to PHL? Southwest charges $29 each way from ISP-BWI a similar route and USAirways charges $183 from little New Haven, CT to PHL

PS if you would have quoted my entire comment you would have seen mention of Domestic cities without LCC competition

Quoting Jerseyguy (Reply 17):
You also have the domestic routes without LCC competition
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 8:15 am

Quoting Planemaker (Reply 34):
Quoting EA CO AS (Reply 28):
Any expansion will be in markets with lower O&D and less stage lengths, which means higher overall CASM and lower overall aircraft utilization.

None of the above is in any way remarkable... it applies to all airlines.

Actually, no. The other airlines are typically focusing on expansion in the longhaul/international markets where there is more money to be made. B6 is doing the exact opposite, and driving up their costs substantially in the process.
"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
 
jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 8:50 am

Quoting JerseyGuy (Reply 37):
Pretty easy to do when your charging more than triple the fare for one ways where there is no LCC competition (example DL to SLC from JFK $158 EWR $548) Round trip fares are crazy too. How bout fares like $443RT from JFK to PHL? Southwest charges $29 each way from ISP-BWI a similar route and USAirways charges $183 from little New Haven, CT to PHL

I'm not getting your point... confused 

Quoting JerseyGuy (Reply 37):
PS if you would have quoted my entire comment you would have seen mention of Domestic cities without LCC competition



Quoting Jacobin777 (Reply 10):
Last I can recall...AA, UA, and CO aren't in bankruptcy and pay their bills also...and have competing fares with B6 as well as provide international transatlantic/transpacific flights....

Didn't have anything to do with my comments....as I had already stated that carriers are competing with B6 on the domestic level as well....not to mention, they are probably making money on the route, otherwise they would cut it...especially with costs so high these days....
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 8:54 am

First,

I have to agree that B6 is doing something wrong if they are not turning a profit during the 3Q. However, I will wait to see how many airlines report suprise downside earnings due to the "hastle factor" of the current security envonment.

Quoting WMUPilot (Reply 9):

I had a rather lengthy discussion a while ago with several crewmembers from other airlines about bringing back regulation. Set the airfares to cover the cost to the airlines plus some and let the carriers battle it out of the service front. Just about every airline, on the domestic front, offer a great coach class product.

I really hope that doesn't happen. In a competitive environment airlines are always looking to reduce costs (believe it or not, this is a good thing). e.g., "Blue turns," UA is buying twin jetbridges, etc.

In a regulated environment, why would you hassle with that? One sees a steady creep in airfares under regulation. Personally, I don't understand the romance of regulation. All it does is make our airlines "less lean" and thus less likely to be ready to compete with forign airlines.

However, WN, B6, FL and others would fight regulation. Heck, the trend is toward opening our markets... so dream about regulation, it won't happen for at least a decade.

Quoting EA CO AS (Reply 28):

B6's problem is that they've already picked the low-hanging fruit. Their niche to date has been fairly long stage lengths in markets with large O&D numbers, with high aircraft utilization to spread their costs over more ASMs.

I would disagree. While the initial implimentation of the E190 had issues, in the long run this is a major stategic shift for B6. The E190's will serve as "starter service" for B6 to expand. Most of their competition will be competing with 50 seat RJ's and against that B6 has an advantage.

B6 has an interesting model. I prefer their service over the other domestic airlines. (Yes, even F9, but only because I couldn't take another stupid credit card offer from Frontier!). But, other's will disagree. If I were high up on the FF priority, it might be different. I'm not... (I fly a lot for 3 months and then stop... usually just before a FF threshold.)

As to costs catching up to B6... from what I see its more a poor RASM. Personally, I'm wondering why turning on the yield optimization software didn't do more for their profits.

Then again, I'm a bear on the economy. B6 is "Florida centric" in their flights and I believe no state's economy will be hit as hard in the coming recession as Florida.  Sad (I used to live in Florida and love the state...). Hopefully I'm wrong, for I'm predicting a recession that will be pretty ugly and thus the whole airline undustry will have to buckle down... again.  Sad

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jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 9:32 am

Quoting Lightsaber (Reply 40):
Hopefully I'm wrong, for I'm predicting a recession that will be pretty ugly and thus the whole airline undustry will have to buckle down... again.

I've been on record on being bearish on the economy for 2-3 years now and my predictions still haven't come through...though I wasn't expecting the housing bubble to go through the roof (pun intended).. spin 
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 9:52 am

Quoting Jacobin777 (Reply 41):
.though I wasn't expecting the housing bubble to go through the roof (pun intended).

Yes, bubbles do last longer than anyone can imagine. Its now time for housing to land. I believe this month (September) is the last chance until 2009 for strong home sales.  Sad We're starting to see a "mixed market" here in california. Some people are still jumping to buy, while many sellers are having to discount. With bond buyers not willing to back the more exotic mortgages anymore... the game is up.

This is going to effect any airline with service to/from any of the "bubble markets." Suddenly those package vacations aren't selling so well...

Like I said, I hope I'm wrong on the severity of the recession.

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jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 10:04 am

Quoting Lightsaber (Reply 42):
We're starting to see a "mixed market" here in california.

...agree...my area where I live (Silicon Valley) has been quite stable...houses aren't running up in prices, but aren't going down..they have been basically stable for the past few months.....

Quoting Lightsaber (Reply 42):
With bond buyers not willing to back the more exotic mortgages anymore... the game is up.

...like those "interest only loans"..which people failed to realise that if the interest on their loans go from 2% to 4% isn't just a "mere 2% increase".....I don't think many people understood that concept that their payments will basically almost double...

Quoting Lightsaber (Reply 42):
This is going to effect any airline with service to/from any of the "bubble markets." Suddenly those package vacations aren't selling so well...

SFO/SJC is a "bubble market"..but fortunately, this area has a higher income (especially SFO) so we should be able to hopefully take the "hit" better than others...that being said, my house isn't too far from a fault line..so I'm not so sure if I'll be able to take a majour "hit" too..hehe...

Quoting Lightsaber (Reply 42):

Yes, bubbles do last longer than anyone can imagine.

The nature of bubbles....it fools just about anyone and everyone..including so-called "experts"....

Quoting Lightsaber (Reply 42):
I believe this month (September) is the last chance until 2009 for strong home sales.

Hmmm.. I am not aware of that... ...that being said...we have witnessed a bubble which might make the dot.bomb bubble look like chump change...

the average US-citizen is leveraged to the tilt and out of the "western nations"..we have the most paltry savings rate....as well as the worst debt (total) as a % of GDP.....worse than when the market hit in 1929.... Wow!

[Edited 2006-09-23 03:12:23]
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 10:11 am

Quoting Lightsaber (Reply 40):
The E190's will serve as "starter service" for B6 to expand. Most of their competition will be competing with 50 seat RJ's and against that B6 has an advantage.

Their Achilles' heel is they're competing against regional carriers providing feed for legacy airlines with global FF programs chock full o' loyal business and leisure travelers who want to take the family to Hawaii or Europe at some point.

So when faced with an equal prices at the legacy vs. B6, anyone who has already committed their loyalty to the FFP of a legacy carrier will probably continue to stay with them. More often than not, consumers clamor for a new LCC entrant not because they're dying to fly on the LCC, but rather because it forces their preferred carrier to lower their prices.
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planemaker
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 10:50 am

Quoting EA CO AS (Reply 38):
Actually, no. The other airlines are typically focusing on expansion in the longhaul/international markets where there is more money to be made. B6 is doing the exact opposite, and driving up their costs substantially in the process.

WN doesn't do any international flying (check what their average trip length is!), and the other LCCs do very little cross border, so your point is moot. And the majors are focusing on international flights because their domestic CASM are higher than the LCCs and can't compete.

So your response has nothing to do with my original point (that you ignore) which is that more important than CASM is the difference between CASM and RASM.
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F9Animal
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 12:03 pm

Quoting EA CO AS (Reply 28):
B6's problem is that they've already picked the low-hanging fruit. Their niche to date has been fairly long stage lengths in markets with large O&D numbers, with high aircraft utilization to spread their costs over more ASMs.

Any expansion will be in markets with lower O&D and less stage lengths, which means higher overall CASM and lower overall aircraft utilization.

They've got an uphill battle ahead of them, to be sure.

There are plenty of long markets that B6 can attract, including Canada, Mexico, and the lower Americas. I know this industry is not easy, but I really think they have lots of area to pickup. I guess time will only tell. They have survived though pretty turbulent times, especially 9/11 and the oil pushing $78 pbl. If oil contiues the decline, I think B6 will be well positioned to success.
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 12:36 pm

Quoting Planemaker (Reply 45):
WN doesn't do any international flying

...yet.

Quoting Planemaker (Reply 45):
So your response has nothing to do with my original point (that you ignore) which is that more important than CASM is the difference between CASM and RASM.

I understand your point, and you're correct - except it's likely that B6 will not enjoy a significant delta between CASM and RASM on these shorthaul routes, primarily due to heavy competition coupled with their lack (so far) of proper yield management.
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Jerseyguy
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 12:45 pm

Quoting Jacobin777 (Reply 39):
Quoting JerseyGuy (Reply 37):
Pretty easy to do when your charging more than triple the fare for one ways where there is no LCC competition (example DL to SLC from JFK $158 EWR $548) Round trip fares are crazy too. How bout fares like $443RT from JFK to PHL? Southwest charges $29 each way from ISP-BWI a similar route and USAirways charges $183 from little New Haven, CT to PHL

I'm not getting your point...

Here's my point...Legacies charge a premium on domestic routes with NO LCC competition. They are also able to charge premium fares on international routes where there is no LCC competition. So yes legacies are going to make more profits than Jetblue.
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jacobin777
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 1:20 pm

Quoting JerseyGuy (Reply 48):
Here's my point...Legacies charge a premium on domestic routes with NO LCC competition. They are also able to charge premium fares on international routes where there is no LCC competition. So yes legacies are going to make more profits than Jetblue.

Isn't that just good business sense? Charge up the "wazoo" until something else comes and drops prices down?

Also, most cities have competion anyway...look at NYC/ORD/LAX/SFO/etc...all have competing international flights...

The gist of my comment wasn't how B6 lowers the price for competing services..but that B6 has rising expenses (not good) and is going to start routes with a lot of competition (not good either).......granted JFK-ORD doesn't have a lot of competition directly, but Chicago-New York has more flights than can be counted... yes ...
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planemaker
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RE: JetBlue Sees Near Break-Even 3Q

Sat Sep 23, 2006 3:10 pm

Quoting EA CO AS (Reply 47):
I understand your point, and you're correct - except it's likely that B6 will not enjoy a significant delta between CASM and RASM on these shorthaul routes, primarily due to heavy competition coupled with their lack (so far) of proper yield management.

First, what heavy competition? B6 has publicaly stated that they plan to put the E190 mainly on underserved routes.

Second, what is known is that B6's E190s have significantly lower CASM than the CRJs and ERJs (generally with Legacy inflated fares) that B6 will mostly be competing against in underserved short/med haul markets. So the CASM/RASM delta is going to be larger than on their long haul A320 routes where they do have heavier competition.

Yield management is a seperate issue and, yes, while B6 was doing a poor job at it they have made moves to improve their yield management by moving the department to New York and hiring an experienced yield management VP.
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