"Bad" is a relative term. How did B6's competitors do when comparing against Q1 2016 results? From what I can see, all US airlines that have reported so far have shown significant decreases in earnings - mostly due to (1) increased fuel costs and (2) mediocre revenue trends.
A profit is a profit, but for a smaller, supposedly nimble airline, this carrier has problems:
Out of control costs
Unresolved Pilot contract which will really increase costs
Re: costs - the ex-fuel CASM number from this quarter is quite high, but B6 management stated this increase is front-loaded to the first half of the year, and is in large part driven by shorter average stage length. For the full year, B6 expects a 1.5%-3.5% ex-fuel CASM increase.
Re: fleet review - I'm not sure if this a "problem" rather than a key component to remaining "nimble". The less-than-favorable view of the E190 is nothing new.
They beat expectations, however as you pointed out they have some issues on the horizon.
1. They're getting to the point where they have staff approaching 20 years of service, it's easy to control costs when your most senior staff have 10 years or less. Same thing with their fleet, costs to maintain a plane that's younger than ten years of age is less than an aircraft nearing 20 years of service.
2. They need to find new growth opportunities, when they're launching JFK-DAB you know they've already picked all the ripe markets from that hub. And BOS and FLL are in a similar situation, unless they add some long range aircraft to launch South America and Europe they're reaching maturity in all their hubs.
3. They got shut out of the West Coast, both with the AS/VX deal and LGB balking at the FIS.
4. Where can they grow?
I still think B6 is well positioned for future growth opportunities. B6 still has quite a few more domestic markets to enter from its BOS hub, and still has a ton of filling in the dots from FLL. Additionally, once B6 makes a decision about its A321LR options, we will get an idea of the growth blueprint over the next decade. Western European and deep South American flying from the JFK/BOS/FLL (and, to a lesser extent, MCO) focus cities are almost certainly on the docket.
Agreed that the US West Coast still remains in limbo, and produces no obvious growth opportunities other than the bulking up of Mint markets. But given the growth opportunities afforded by its East Coast focus cities, perhaps the situation isn't so dire. The same could be said about AS/VX, but on opposite coasts.
this is a lot of doom and gloom for an airline that's 1/4 the size of united and achieved about the same net income in Q1.
Their CASM ex-fuel is still in low 8 cent range and the legacies are over 10 cent and close to 11. It's up 3.3% ex-fuel vs a year ago. United is up 5.9% ex-fuel and Delta is up 5.8%.
That's the key - keep CASM growth below competitors. Did UA or DL record a significant decrease in average stage length as well? This could explain some of the growth in ex-fuel CASM...