Looks like Jetblue may be closing some non performing cities and routes after the 60 day brainstorm session is over. Some excerps from the Wall St Journal yesterday:
WSJ: You went straight from college to New York Air and then Continental Airlines. You're known as the 'operator.' How is JetBlue going to be different under your leadership?
Mr. Barger: What's the report card on the 128 airplanes being deployed today? Has every airplane earned its way into the route network or the fleet plan? We're going to continue to grow, but let's just calm it down. As the eighth-largest airline in the country, you can't turn on a dime any more. You want to be able to move with alacrity when opportunities present themselves, but behind the scenes be very deliberate.
WSJ: Mr. Neeleman said things fell apart in February because JetBlue hadn't kept up with its growth and 'lost control.' When did you first start to worry that the company wasn't managing the transition between upstart and major airline?
Mr. Barger: There wasn't an event or a meeting, but there were smoke signals, whether it was the cost creep or the decision to take on 35 airplanes a year. We ended up with a unionization effort within our airport group. What triggered that? What weren't we doing right?
[A consultant] said, 'You keep blowing the same candles out.' You end up trying to fix the same problem the same way, or the same problem crops up and you try another fix, but there's not a comprehensive fix. As a leadership team, you better be listening to the signals because otherwise here's the next airplane and the next new city and we're going to blow the same candles out again.
WSJ: The airline business has reinvigorated network carriers, discounters continue to grow, and new airlines like Skybus and Virgin America are coming along. How is JetBlue coping with intensifying domestic competition?
Mr. Barger: Our cost structure, while we can always hone it, is in very good position. Make sure we continue to keep the product fresh. Our ability to really compete on a cost and a product standpoint really positions us well for the future. You can't rest on your laurels when Consumer Reports comes out and says JetBlue is the top airline. We have a responsibility to make sure, if something's not performing, let's redeploy the airplanes.
WSJ: Wall Street says it loves the airline, hates the stock. What do you do about that?
Mr. Barger: Our mission is to really, with rigor, review what we're doing today. Let's manage the company: 128 airplanes, 54 cities, let's evaluate. However, are we deploying our newest asset, the [Embraer] 190? I think every airline would love to have a 100-seat airplane they could deploy across North America. Many of them can't. From a revenue perspective, there is plenty of running room for our brand, and not just in the domestic U.S. Let's look at Canada, Mexico, the Caribbean. I really believe the share price will take care of itself.
Sounds like he is not happy with deploying a/c on unprofitable routes. Wonder how those Shuttles are doing? Do you think maybe those a/c could pull a better yield elsewhere? Pittsburgh is a non performer. My guess is they are gone, along with quite a few other non performing cities. They need to build out the cities that are performing and close those that are not. More reason to reinstate the 190 deliveries and sell more 320s.
[Edited 2007-06-22 19:45:57]