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piedmontf284000
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JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 6:24 pm

PRASM fell roughly 1.7%

Operating expenses for the quarter increased 6.5%

For the 4th quarter, B6 reported a profit of $172 million compared with $190 million a year earlier.

Revenue rose 2.9% to $1.64 billion.

Just like WN, B6 appears to be going in the wrong direction.

http://www.marketwatch.com/story/jetblu ... 6-84853726
 
santi319
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 7:18 pm

I always wondered how B6 makes money, its really puzzling..
 
winginit
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 8:17 pm

piedmontf284000 wrote:
Just like WN, B6 appears to be going in the wrong direction.


How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?
 
VetteDude
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 8:36 pm

winginit wrote:
piedmontf284000 wrote:
Just like WN, B6 appears to be going in the wrong direction.


How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?


Just ignore it. Many A.net posters have an unexplainable beef against the very industry they claim to be enthusiasts of.
Last edited by VetteDude on Thu Jan 26, 2017 8:48 pm, edited 1 time in total.
 
Robert1010
Posts: 186
Joined: Wed Aug 31, 2016 4:23 pm

Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 8:39 pm

Time for WN and B6 to merge! ;)
 
coolian2
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 8:40 pm

santi319 wrote:
I always wondered how B6 makes money, its really puzzling..

I understand it's because they bring in more money than they spend.
Q300/ATR72-600/737-200/-300/-400/-700/-800/A320/767-200/-300/757-200/777-300ER/
747-200/-300/-400/ER/A340-300/A380-800/MD-83/-88/CRJ-700/-900
 
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piedmontf284000
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 9:02 pm

VetteDude wrote:
winginit wrote:
piedmontf284000 wrote:
Just like WN, B6 appears to be going in the wrong direction.


How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?


Just ignore it. Many A.net posters have an unexplainable beef against the very industry they claim to be enthusiasts of.


Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.
 
VetteDude
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 9:12 pm

piedmontf284000 wrote:
VetteDude wrote:
winginit wrote:

How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?


Just ignore it. Many A.net posters have an unexplainable beef against the very industry they claim to be enthusiasts of.


Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.


If you are worried, then by that line of thinking the capacity discipline will actually help the company keep costs down and revenues (per passenger) up. The higher staffing costs can be partially offset by moving the -700 and -800 mix of flying more towards the -800. I have frequently been on 100% full -800 flights on Southwest, I bet they could fill up -9s on big routes if they want to someday (and I bet they will once the whole IT switchover is complete)
Last edited by VetteDude on Thu Jan 26, 2017 9:19 pm, edited 1 time in total.
 
ASFlyer
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 9:19 pm

I like Jet Blue. They have a nice product and great people. I wonder if the Mint service has contributed to the decline in profits. The real estate that those seats take up is significant, while not commanding a significant revenue premium. I understand it's a wonderful product, but maybe not the right product for Jet Blue. Not to say they don't do a great job of executing the service but maybe it doesn't command a significant enough premium to compensate for the lost seats to accommodate it.
 
airliner371
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 10:22 pm

piedmontf284000 wrote:
VetteDude wrote:
winginit wrote:

How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?


Just ignore it. Many A.net posters have an unexplainable beef against the very industry they claim to be enthusiasts of.


Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.

You need to relax my friend. So negative and defensive, hope you don't live your life that way.
 
winginit
Posts: 3061
Joined: Sat Feb 23, 2013 9:23 pm

Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 10:38 pm

piedmontf284000 wrote:
Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.


It seems investors are doing exactly that no? Are they all uninformed idiots?
 
airplaneboy
Posts: 725
Joined: Sat May 15, 2004 11:59 am

Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 11:00 pm

piedmontf284000 wrote:
VetteDude wrote:
winginit wrote:

How is it, pray tell, that Southwest, whose stock is up nearly 9% and is at an all-time high after announcing earnings today, is going in the wrong direction?


Just ignore it. Many A.net posters have an unexplainable beef against the very industry they claim to be enthusiasts of.


Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.


Almost EVERY airline in the US, including Jetblue- have increased employee compensation these last couple of years. And all airlines, as they age and retain a more senior workforce, will continue to have rising labor costs- Jetblue included. How those increased costs are offset- PROFIT margins and increased revenue, are more important things to be concerned about. WN's labor costs have been increasing for years- and so have their profit margins. Just like Delta, United, American, Jetblue and Alaska.
 
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jfklganyc
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 11:11 pm

B6 pilots do not have an ALPA contract yet.

They may see higher costs now, but those costs will certainly go up further when a CBA is ratified. I believe they are 10-20 % below current US Airbus operators.

Long story short, B6 better get its house in order. The CFO left, and this isnt a good first quarter post Powers
 
ScottB
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Joined: Fri Jul 28, 2000 1:25 am

Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 11:18 pm

piedmontf284000 wrote:
Yes, ignore the fact that Southwest has new contacts with pilots and FA's that will see salaries rise by 30 percent in the next 3 years. Yes, ignore the fact that salaries and benefits also rose three percent to $1.7 billion for the fourth quarter. Yes, ignore the fact that passengers paid an average fare of $144.43, down 3.7 percent. Yes, ignore the fact WN's announcement that it will add only 3.5 percent more capacity in 2017. Yes, just ignore the fact that the airline paid 19 percent more for fuel during the quarter.

You're right, nothing to see here, just move along.


Er, OK... Delta is at the top of the pack among the legacy carriers, and yet they announced first quarter 2017 capacity will be down slightly year-over-year. Delta's salaries and benefits were up a whopping 14% for full-year 2016 vs. 2015 (and Q4 was worse at 30%). Delta's unit revenues were down 2.7% systemwide and revenue was down by double-digit percentages in the Pacific segment.

And if you just want to look to the discussion topic at hand: B6's average fare was down 4.0%, worse than WN. Their salaries and benefits rose 6.5% in the quarter -- again, worse than WN. JBLU's ROIC was less than half WN's. B6 plans to add more capacity percentagewise than WN -- 5.5% vs. 3.5% -- but WN will still add more capacity in 2017 than B6.

Yup, the wheels are coming off the bus at WN.
 
uberflieger
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 11:26 pm

santi319 wrote:
I always wondered how B6 makes money

Quite simple. Pay your employees less than the competition. :D
 
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LAXintl
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Thu Jan 26, 2017 11:37 pm

And Q1 is shaping up poorly. Robin Hayes says flight/route adjustments likely.

https://skift.com/2017/01/26/jetblue-ma ... h-january/
From the desert to the sea, to all of Southern California
 
airplaneboy
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 12:35 am

I think one of the fundamental revenue management issues jetBlue faces is having a more premium coach product compared to its peers. For example, their A320s seat 150 passengers. Spirit's A320s have 178/182 seats. Frontier's A320s seat 168/180 passengers. Southwest seats 175 passengers in their 737-800 (most similarly sized aircraft to the A320). I think that they are struggling to command a yield premium in markets where they face competition. People generally aren't willing to pay *that* much more for the fancy tvs, free wifi, better snack options and more comfortable seats. Something has to give. Their mint A321s are great for the routes that they fly, but they can't rely solely on expanding the mint network (which is limited in my opinion) to earn more revenue. Many markets they fly in are also flown by the aforementioned carriers. And the legacies now have basic economy fares to compete with the ULCCs. Jetblue has an amazing product in coach, people just aren't willing to pay more for it. If they were, their profit margins and revenue performance would be much greater.
 
kabq737
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 4:57 am

coolian2 wrote:
santi319 wrote:
I always wondered how B6 makes money, its really puzzling..

I understand it's because they bring in more money than they spend.

You know, I think I heard that somewhere as well! :stirthepot:
Been on: 320, 321, 333, 733, 73G, 738, 739, 744, 752, 763, 764, 772, 789, C208, CR7, CR9, BE20, MD83, MD88, MD90, E70, E75, E90, TRIM
Flown: SEEKER, C150M C172N, C172R, C172S, C182RG, DA40, PA-46
 
JBLUA320
Posts: 3086
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 5:04 am

airplaneboy wrote:
I think one of the fundamental revenue management issues jetBlue faces is having a more premium coach product compared to its peers. For example, their A320s seat 150 passengers. Spirit's A320s have 178/182 seats. Frontier's A320s seat 168/180 passengers. Southwest seats 175 passengers in their 737-800 (most similarly sized aircraft to the A320). I think that they are struggling to command a yield premium in markets where they face competition. People generally aren't willing to pay *that* much more for the fancy tvs, free wifi, better snack options and more comfortable seats. Something has to give. Their mint A321s are great for the routes that they fly, but they can't rely solely on expanding the mint network (which is limited in my opinion) to earn more revenue. Many markets they fly in are also flown by the aforementioned carriers. And the legacies now have basic economy fares to compete with the ULCCs. Jetblue has an amazing product in coach, people just aren't willing to pay more for it. If they were, their profit margins and revenue performance would be much greater.



JetBlue is increasing seat count on the A320/A321s. I think the A320s will go from 150 to 162 with the installation of the slimmer seat that's currently on the A321 fleet.
I think the retrofit was delayed, but once done, I imagine this will help tremendously.
 
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aemoreira1981
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 5:19 am

Almost all of JetBlue's new planes are owned outright (only one A321 has been sold and leased back). They're pretty unusual in that regard. I'm surprised that more of the new A321s haven't been sold and leased back. As for the re-configuration back to 162 (which is what JetBlue started at), that is long overdue. The one-class A321s have all been configured Y200. I also wonder if perhaps on the Mint planes, an extra row should be added to the economy product to reduce that seat pitch to 32 inches (from 33).
 
N757ST
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Joined: Sat Feb 16, 2002 6:00 am

Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 1:50 pm

Profit margins for 2016:

DAL: 11%
LUV: 10.5%
AMR: 5%
JBU: 11.5

Debt down in the last 4 years from 4+ to 1.3bln.

Guys, these aren't exactly dumpster fire results.
 
catiii
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 6:01 pm

The 320s are going to 156 I believe with the add of the Spaceflex option in the aft complex.
 
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Polot
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 6:13 pm

catiii wrote:
The 320s are going to 156 I believe with the add of the Spaceflex option in the aft complex.

No, as mentioned they are going to 162 seats. 6 seats (1 row) from Spaceflex, and 6 more (1 row) because they are reducing the standard seat pitch from 34" to "32-33in".
 
jetbluefan1
Posts: 3310
Joined: Wed Dec 31, 2003 8:39 am

Re: JetBlue reports 4th quarter - Expenses up, profits down

Fri Jan 27, 2017 6:25 pm

piedmontf284000 wrote:
PRASM fell roughly 1.7%

Operating expenses for the quarter increased 6.5%

For the 4th quarter, B6 reported a profit of $172 million compared with $190 million a year earlier.

Revenue rose 2.9% to $1.64 billion.

Just like WN, B6 appears to be going in the wrong direction.

http://www.marketwatch.com/story/jetblu ... 6-84853726


Not the best numbers, but revenue trends were positive for the quarter. The balance sheet is also quite strong, with more unencumbered aircraft and higher cash reserves - all while reducing debt. The balance sheet will allow B6 to manage around tougher cost/revenue periods.

The concern is January RASM on track to decline 8-9% YOY. The winter storm, FLL shooting, and introduction of new service (LAX-MCO, LGB-SJC, FLL-AUA/ORD) during a trough period probably aren't helping things. That said, the projection for February/March is much stronger, so hopefully January is an anomaly.

LAXintl wrote:
And Q1 is shaping up poorly. Robin Hayes says flight/route adjustments likely.


Interesting that Puerto Rico continues to struggle. If February and March do not improve, I would expect cuts around SJU flying, as well as some of the more marginal near-transcon flying (JFK-RNO/ABQ/SLC/PHX).

aemoreira1981 wrote:
Almost all of JetBlue's new planes are owned outright (only one A321 has been sold and leased back). They're pretty unusual in that regard. I'm surprised that more of the new A321s haven't been sold and leased back. As for the re-configuration back to 162 (which is what JetBlue started at), that is long overdue. The one-class A321s have all been configured Y200. I also wonder if perhaps on the Mint planes, an extra row should be added to the economy product to reduce that seat pitch to 32 inches (from 33).


Reducing pitch down to 32" would nearly eliminate B6's advantage of "most legroom in coach" - which is especially a selling point in the ultra competitive transcon markets that the Mint product is deployed on. Additionally, those markets are some of the most profitable in the system - B6 doesn't need more seats to sell, those flights are doing just fine.

[quote="ASFlyer"]I like Jet Blue. They have a nice product and great people. I wonder if the Mint service has contributed to the decline in profits. The real estate that those seats take up is significant, while not commanding a significant revenue premium. I understand it's a wonderful product, but maybe not the right product for Jet Blue. Not to say they don't do a great job of executing the service but maybe it doesn't command a significant enough premium to compensate for the lost seats to accommodate it.[/quote

I don't think this is the case. In the November 2016 investor day call, B6 management touted that BOS/JFK-LAX/SFO are some of the most profitable routes in the system, and that Mint is hugely margin accretive.

This is not to say that Mint will work on future routes (such as JFK-SEA or BOS-SAN), but so far, it's been a home run.
 
tortugamon
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Re: JetBlue reports 4th quarter - Expenses up, profits down

Sat Jan 28, 2017 5:33 am

I am tempted to start a new thread that states:

"New York-based JetBlue Airways earned a full-year 2016 net profit of $759 million, up 12% over net income of $677 million in 2015. The airline’s full-year operating margin increased 0.8% year-over-year to 19.8%.

JetBlue’s 2016 revenue grew 3.4% to $6.6 billion as expenses increased 2.3% to $5.3 billion, producing operating income of $1.3 billion, up 2.3% over $1.2 billion in operating profit for 2015.

Full-year traffic grew 9.4% to 45.6 billion RPMs on an 8.9% increase in capacity to 53.6 billion ASMs, producing a load factor of 85.1%, up 0.4 point. "
.........http://atwonline.com/airline-financials ... 59-million



Honestly what is this like the 10th most profitable airline in the World right now? For an airline that is less than 2 decades old? Oh yeah, just terrible.

WN had a great year. Wong direction my a...

tortugamon

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