MIflyer12
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JetBlue earnings release 4/23/19

Tue Apr 23, 2019 5:17 pm

Delta reported 4/10
UA reported 4/16
AS due 4/25
WN due 4/25
AA due 4/26
Spirit due 5/2

http://blueir.investproductions.com/inv ... 23-04-2019

Not strong, IMHO. Declining RASM year-over-year. Too much expansion/wrong markets?

GAAP pre-tax income of $58 million, a decline of 48.5% from $113 million in the first quarter of 2018. Excluding the one-time costs, adjusted pre-tax income of $70 million(1), a decline of 38.2% from the first quarter of 2018.
Pre-tax margin of 3.1%, inclusive of the one-time costs, a 3.3 point decline from the first quarter of 2018. Adjusted pre-tax margin of 3.7%(1), a 2.7 percentage point decline year over year.


CASM ex-fuel is expected to increase between 1.5% and 3.5% for the second quarter of 2019, principally driven by engine maintenance timing and the year-over-year impact of the pilot contract effective on August 1st, 2018.
 
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Dieuwer
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 5:19 pm

JetBlue Airways (NASDAQ:JBLU): Q1 Non-GAAP EPS of $0.16 beats by $0.04; GAAP EPS of $0.14.
Revenue of $1.87B (+6.9% Y/Y) in-line.
Shares +3.09% PM.
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 5:56 pm

Their financial situation is worsening and now they plan to undertake an extremely expensive undertaking with transatlantic flights. Every hub they operate is in an extremely competitive market. And yes, their fans will say they are "beating" the competition in all of those markets but all of those competitors are more profitable overall than B6. As such, they can withstand a longer, drawn out battle in those places while B6 cannot. I don't see how B6 raises revenue with the level of competition they have at every turn and their costs are only going to increase. They are caught between a rock and a hard place and they don't have the fortress hubs, global alliances and deep FF membership loyalty that other airlines have to help them out.
 
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Dieuwer
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:16 pm

Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).
 
LHUSA
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:19 pm

Dieuwer wrote:
Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).


Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.
 
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Dieuwer
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:22 pm

LHUSA wrote:
Dieuwer wrote:
Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).


Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.


Revenue went up. No nothing "declining".
It's easy to pick numbers right?
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:22 pm

LHUSA wrote:
Dieuwer wrote:
Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).


Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.


Exactly. The market is only upbeat on B6 because they expected them to do even worse. It's like someone expecting their child to flunk a class but they end up getting a C. It's not great but it's a relief because they did better than you thought they would.
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:23 pm

Dieuwer wrote:
LHUSA wrote:
Dieuwer wrote:
Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).


Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.


Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.
 
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Dieuwer
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:25 pm

Brickell305 wrote:
Dieuwer wrote:
LHUSA wrote:

Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.


Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.


Not in today's market.. Ever heard of TESLA? Or Netflix? Twitter? etc..... Plenty of companies that grow and don't care about profits (the lack thereof, at this moment in time).
Anyhow, if you think B6 is such as bad airline investment...SHORT IT. Put your money where your mouth is.
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:30 pm

Dieuwer wrote:
Brickell305 wrote:
Dieuwer wrote:

Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.


Not in today's market.. Ever heard of TESLA? Or Netflix? Twitter? etc..... Plenty of companies that grow and don't care about profits (the lack thereof, at this moment in time).

JetBlue is not a tech company. There aren't a long line of venture capitalists looking to prop the company up and then reap the benefits later down the line. Declining profitability is a terrible sign for B6. Especially because they have committed to a massive undertaking in beginning transatlantic flights which is likely to cost them significantly and also not likely to positively contribute to their bottom line for years.
 
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Dieuwer
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:37 pm

Wall Street disagrees: stock up 5+%. (2:30 PM EST).
I take the opinion of Wall Street any day over that of a bunch of nobodies in this thread.
 
Scarebus34
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:43 pm

Dieuwer wrote:
Wall Street disagrees: stock up 5+%. (2:30 PM EST).
I take the opinion of Wall Street any day over that of a bunch of nobodies in this thread.

Their stock is up based on their guidance not the results... let’s see if they deliver on the guidance.
 
winginit
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 6:53 pm

Let's bring some numbers into the discussion please:

Image

These earnings were a mixed bag, but as has been the case with the airlines who have already reported, the market is reacting strongly to positive guidance especially since B6 lowered guidance last month and have here essentially undone that guidance.

Dieuwer wrote:
Anyhow, if you think B6 is such as bad airline investment...SHORT IT. Put your money where your mouth is.


The one-year, and even two-year trends will show you that a short JBLU strategy would have paid off nicely...

Image
 
airbazar
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 7:31 pm

Brickell305 wrote:
Dieuwer wrote:
LHUSA wrote:

Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.


Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.


These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.
 
flyby519
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 7:43 pm

Brickell305 wrote:
Their financial situation is worsening and now they plan to undertake an extremely expensive undertaking with transatlantic flights. Every hub they operate is in an extremely competitive market. And yes, their fans will say they are "beating" the competition in all of those markets but all of those competitors are more profitable overall than B6. As such, they can withstand a longer, drawn out battle in those places while B6 cannot. I don't see how B6 raises revenue with the level of competition they have at every turn and their costs are only going to increase. They are caught between a rock and a hard place and they don't have the fortress hubs, global alliances and deep FF membership loyalty that other airlines have to help them out.


So what should B6 do in your mind? Just go straight to Chapter 7 liquidation? I am genuinely curious.
 
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airportugal310
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 7:48 pm

airbazar wrote:
Brickell305 wrote:
Dieuwer wrote:

Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.


These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.


Well said. These B6 threads are becoming so predictable that if I could invest stock in the threads themselves, I would!
I sell airplanes and airplane accessories
 
impilot
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 7:54 pm

winginit wrote:
The one-year, and even two-year trends will show you that a short JBLU strategy would have paid off nicely...


So let's recap:
There's a discussion about JBLU and its worsening financials implying a rocky future
Someone responds to put their money where their mouth is and short it
You decide to pull up a chart based on past performance to make a case for future performance...that's laughable.
Based on your statement, a hindsight good short opportunity implies a future good short opportunity?
I hope you DO put your money where your mouth is and short JBLU
 
winginit
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 8:09 pm

impilot wrote:
So let's recap:


Yes! Let's!

impilot wrote:
There's a discussion about JBLU and its worsening financials implying a rocky future


I certainly didn't imply that there financials are worsening nor did I imply a rocky future. I simply posted the raw numbers and said they were a mixed bag, which they are. Let's move on.

impilot wrote:
Someone responds to put their money where their mouth is and short it


Yes, someone did say that... I'm glad our reading comprehension is up to snuff.

impilot wrote:
You decide to pull up a chart based on past performance to make a case for future performance...that's laughable


Did I make the case for future performance? Find where I said that please. Starting to doubt that whole reading comprehension bit. I merely pointed out that if someone had shorted the stock a year or two years ago it would have been a sound investment. My statement didn't speak to future performance. As for it being 'laughable' if I had done that... a huge part of earnings releases is the prediction of past performance to deduce future performance. I assume you know this? Maybe not.

impilot wrote:
Based on your statement, a hindsight good short opportunity implies a future good short opportunity?


Did I say that? Again, find where I said that please (spoiler alert: I didn't). A hindsight good short opportunity can indeed imply a future good short opportunity - we call that a trend. I've not said that's the case here.

impilot wrote:
I hope you DO put your money where your mouth is and short JBLU


I hope you brush up on your reading comprehension. It has clearly let you down in this thread.
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 8:29 pm

airbazar wrote:
Brickell305 wrote:
Dieuwer wrote:

Revenue went up. No nothing "declining".
It's easy to pick numbers right?

Their PROFIT declined. That's the bottom line figure of any financial statement.


These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.

Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.

flyby519 wrote:
Brickell305 wrote:
Their financial situation is worsening and now they plan to undertake an extremely expensive undertaking with transatlantic flights. Every hub they operate is in an extremely competitive market. And yes, their fans will say they are "beating" the competition in all of those markets but all of those competitors are more profitable overall than B6. As such, they can withstand a longer, drawn out battle in those places while B6 cannot. I don't see how B6 raises revenue with the level of competition they have at every turn and their costs are only going to increase. They are caught between a rock and a hard place and they don't have the fortress hubs, global alliances and deep FF membership loyalty that other airlines have to help them out.


So what should B6 do in your mind? Just go straight to Chapter 7 liquidation? I am genuinely curious.


Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.
 
Bluewho
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 8:49 pm

Brickell305 wrote:
airbazar wrote:
Brickell305 wrote:
Their PROFIT declined. That's the bottom line figure of any financial statement.


These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.

Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.

flyby519 wrote:
Brickell305 wrote:
Their financial situation is worsening and now they plan to undertake an extremely expensive undertaking with transatlantic flights. Every hub they operate is in an extremely competitive market. And yes, their fans will say they are "beating" the competition in all of those markets but all of those competitors are more profitable overall than B6. As such, they can withstand a longer, drawn out battle in those places while B6 cannot. I don't see how B6 raises revenue with the level of competition they have at every turn and their costs are only going to increase. They are caught between a rock and a hard place and they don't have the fortress hubs, global alliances and deep FF membership loyalty that other airlines have to help them out.


So what should B6 do in your mind? Just go straight to Chapter 7 liquidation? I am genuinely curious.


Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.




How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?
 
Brickell305
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 9:02 pm

Bluewho wrote:
Brickell305 wrote:
airbazar wrote:

These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.

Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.

flyby519 wrote:

So what should B6 do in your mind? Just go straight to Chapter 7 liquidation? I am genuinely curious.


Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.




How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?

As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.
 
Bluewho
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 9:28 pm

Brickell305 wrote:
Bluewho wrote:
Brickell305 wrote:
Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.



Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.




How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?

As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.




I just don’t think it will be as expensive as you think.
I have no doubt knowing jetblue they have run the numbers over and over and over.
 
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VS4ever
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Re: JetBlue earnings release 4/23/19

Tue Apr 23, 2019 10:37 pm

Bluewho wrote:
Brickell305 wrote:
Bluewho wrote:



How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?

As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.





I just don’t think it will be as expensive as you think.
I have no doubt knowing jetblue they have run the numbers over and over and over.


They have 870m cash and 625m in undrawn credit so I think they are doing ok, and if needed they could also suspend their buybacks for a quarter along with the fact they are only on planning on getting around 1/2 of their aircraft this year, which will help their cash position a bit. I don’t see cost as being the issue here, it’s an investment over the medium term that can be partly paid out of future cashflows. As long as the regular business doesn’t tank the risk and cost should not be out of control
That feeling when you sit at the end of a runway, brakes are released and the raw power takes over. Now that is a thing of beauty and it never gets old.
 
tphuang
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 2:48 pm

Imo, a pretty weak earning. Now, I don't think RASM decline is as bad as made out to be. They had really high completion rate for a Q1, increased stage length and added seats on A320s and several A321s, which all hurts RASM. CASM-ex growth would've been -2% if there was no new pilot contract. And considering last year's Q1 had a 6.5% RASM increase over previous year, so it was lapped against tough comp.

Having said that, it makes Q2's projection a lot worse. Last year's Q2 is a really easy comp and they have the added benefit of Easter in Q2 this year. So they really should do a lot better than 2.5% improvement. That to me is the biggest miss.

There are adjustments that could be made and probably should be made to improve the margins. For example, cutting some Cuban flying, trimming certain JFK routes not making money and so forth. Given AA's cutbacks in JFK for summer, I do wonder if there will be some close-in strength in those markets for June.

Over the past years, you basically have 3 factors that are squeezing their margins:
1) declining profitability of BOS due to starting a couple of business routes that are tough LGA/ATL/MSP and increased competition on a few routes where they dominate.
2) LGB weakness and weakness in transcon routes they added as adjustments to LGB.
3) new pilot contract.

1) is something that they will just have to ride out. Building a hub is not easy, but will pay off down the road when they have well over 200 flights and plenty of European flights. All of these adds, especially to Europe, are needed to get more people to become mosaic members, to sign up to credit cards and such.

2) is something that has already been turning around, but the additional capacity they put on BOS-LA Basin was too much and those have been adjusted for summer and fall, so I expect this to be moderating. Long term, it may make sense for them to cut even more out of LGB, since it will always be at most a slightly profitable station. Really depends on their west coast ambitions.

3) is more of a short term thing imo. It will affect their margins for a a couple of more quarters, but will moderate after that. Every major airlines have new contracts once every few years. Nothing out of ordinary here.

They do have a couple of things going forward for them.
1) A220 replacing E90s, which is the largest factors in their cost issues recently
2) a lot of A321NEO. Soon enough, A320 will be the least efficient aircraft in their fleet. A fleet of A321NEO with A220-100/300/500 would be very good for cost.

Brickell305 wrote:
Their financial situation is worsening and now they plan to undertake an extremely expensive undertaking with transatlantic flights. Every hub they operate is in an extremely competitive market. And yes, their fans will say they are "beating" the competition in all of those markets but all of those competitors are more profitable overall than B6. As such, they can withstand a longer, drawn out battle in those places while B6 cannot. I don't see how B6 raises revenue with the level of competition they have at every turn and their costs are only going to increase. They are caught between a rock and a hard place and they don't have the fortress hubs, global alliances and deep FF membership loyalty that other airlines have to help them out.

Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.

How do you expect them to turn BOS into a more dominant hub and have more ff loyalty and more credit card users if they don't keep building it? It's called investing for the future. Flying to Europe will bring in far more loyalty and pricing power at BOS than their flights to MSP or somewhere else in middle of the country. There is not a chance in my mind they could do worse flying to Europe than their existing flights to ATL or HOU or MSP. I would much rather than cancel one of those routes if it really comes down to it. And there is actually a good chance they will do pretty well to Europe.

For TATL, all they are adding are A321LR and ETOPS, which can be moved to other markets like Hawaii or South America if TATL doesn't work out. There is no additional fleet complexity and minimal hits to their capex (they said so). Their books are great. They are comfortable making money. I don't see what the issue is. They have a plan to maintain 0 to 1% CAGR going forward and it has done pretty well so far even with the new pilot contract. Where do you see their costs rising higher than competitors. AS and WN both have ETOPS subfleet now and they have similar costs to B6. I don't see why hving an ETOPS subfleet will be "extremely expensive". They are not adding widebodies yet.

If they do add widebodies, that will simply indicate their TATL flights are doing really well.

VS4ever wrote:
They have 870m cash and 625m in undrawn credit so I think they are doing ok, and if needed they could also suspend their buybacks for a quarter along with the fact they are only on planning on getting around 1/2 of their aircraft this year, which will help their cash position a bit. I don’t see cost as being the issue here, it’s an investment over the medium term that can be partly paid out of future cashflows. As long as the regular business doesn’t tank the risk and cost should not be out of control

exactly, their books are really solid unlike AA.
 
richierich
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 3:00 pm

When will Cuba be rationalized to just HAV? Surely the other cities B6 serves cannot be profitable, especially with the further tightening of travel restrictions. Very sad, Cuba is a great place to visit. They need (and want) our money but I don't see how any airline will be making money flying there from the USA.
None shall pass!!!!
 
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Veigar
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 3:08 pm

While the numbers are a mixed bag, this definitely won't help the phone booth knife fights over B6 that regularly take place on Anet
 
richierich
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 3:22 pm

Veigar wrote:
While the numbers are a mixed bag, this definitely won't help the phone booth knife fights over B6 that regularly take place on Anet


Funny - let me put it to you this way, the B6 haters and doubters have been out since JetBlue and Anet were both in their infancy, so the reference to a phone booth is probably appropriate! Yet here it is, looking at the middle of 2019, and B6 is not going anywhere. Are costs too high? Probably - but B6 does operate in typically the most cost heavy parts of the USA, the benefits being this also happens to be where the revenue is. Opening a focus city in Des Moines, for example, would be silly but it would be cheap. Going to Europe will be expensive but they are doing it the most cost-conscious way possible, in my opinion, if a little conservative in their approach. Heck, we don't even know which airports they will fly to yet. So there is plenty of growth for B6, plenty of opportunities for more revenue, and the constant battle with increasing costs will need to be redoubled.

Was this a great Quarterly performance? No. But was it terrible? Really terrible? The answer is also 'No'. Do people actually think B6 is at the end of the rope? Does even the most hardened DL supporter actually believe that? Saying it over and over doesn't make it true.
None shall pass!!!!
 
shadez
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 4:12 pm

richierich wrote:
When will Cuba be rationalized to just HAV? Surely the other cities B6 serves cannot be profitable, especially with the further tightening of travel restrictions. Very sad, Cuba is a great place to visit. They need (and want) our money but I don't see how any airline will be making money flying there from the USA.


I'm not convinced the secondary Cuban markets are money pits. Yes, the loads are low (about 60 passenger per flight), but the fares are usually around $125 per way (or higher), before taxes and ancillary fees. That equals about $7,500 in income from airfare alone per flight. Flight time is only an hour. I obviously have no idea how expensive these stations are to operate, but the math does not seem terrible. I still don't know why the've subbed the E90 for 320 on these flights; that seems to make these flights less economically sensible.
 
airbazar
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 4:34 pm

Brickell305 wrote:
airbazar wrote:
Brickell305 wrote:
Their PROFIT declined. That's the bottom line figure of any financial statement.


These discussions are always so silly but i'll bite.
Different airlines are at different stages of their life cycle. Just because one airline is doing great right now it doesn't mean they all should do great in the same period. A year ago UA was everyone's favorite pinata. This year it's B6. I'm sure next year it will be someone else.

Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.

Tell that to WOW, Primera, Jet Airways, etc....There are plenty of airlines doing poorly around the world and many more doing less great. The industry as a whole is not homogeneous. Many airlines are reporting significant profit decline.
In the U.S. I agree that the industry is doing good which is why even B6 is doing good. Just not as good as last year. Why? My guess is they are at a different stage. It's a cyclical industry and every airlines has its cycles. Worst than last year is not the same as bad. Just a quarter ago UA reported a 20% profit loss. It happens. It's a cyclical industry and each airline goes thru its cycles.
 
tphuang
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 4:42 pm

shadez wrote:
richierich wrote:
When will Cuba be rationalized to just HAV? Surely the other cities B6 serves cannot be profitable, especially with the further tightening of travel restrictions. Very sad, Cuba is a great place to visit. They need (and want) our money but I don't see how any airline will be making money flying there from the USA.


I'm not convinced the secondary Cuban markets are money pits. Yes, the loads are low (about 60 passenger per flight), but the fares are usually around $125 per way (or higher), before taxes and ancillary fees. That equals about $7,500 in income from airfare alone per flight. Flight time is only an hour. I obviously have no idea how expensive these stations are to operate, but the math does not seem terrible. I still don't know why the've subbed the E90 for 320 on these flights; that seems to make these flights less economically sensible.


imo, one of the easiest places for B6 to cut their losses. Especially given the current administration's view toward Cuba. You have to remember they subbed in E90 for A320s, because they couldn't fill the planes. Which is why the fares are higher. This seems to be one bet they should retreat from.
 
frmrCapCadet
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 4:49 pm

Profit margins at or over 10% are desirable even for airlines. Profit margins under 5% are worrisome.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
shadez
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 5:19 pm

tphuang wrote:
shadez wrote:
richierich wrote:
When will Cuba be rationalized to just HAV? Surely the other cities B6 serves cannot be profitable, especially with the further tightening of travel restrictions. Very sad, Cuba is a great place to visit. They need (and want) our money but I don't see how any airline will be making money flying there from the USA.


I'm not convinced the secondary Cuban markets are money pits. Yes, the loads are low (about 60 passenger per flight), but the fares are usually around $125 per way (or higher), before taxes and ancillary fees. That equals about $7,500 in income from airfare alone per flight. Flight time is only an hour. I obviously have no idea how expensive these stations are to operate, but the math does not seem terrible. I still don't know why the've subbed the E90 for 320 on these flights; that seems to make these flights less economically sensible.


imo, one of the easiest places for B6 to cut their losses. Especially given the current administration's view toward Cuba. You have to remember they subbed in E90 for A320s, because they couldn't fill the planes. Which is why the fares are higher. This seems to be one bet they should retreat from.


Sorry, I meant to say I don't understand why they put the 320 back on 2/3 of those secondary Cuban markets.
 
tphuang
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 6:15 pm

frmrCapCadet wrote:
Profit margins at or over 10% are desirable even for airlines. Profit margins under 5% are worrisome.

Q1 is typically the worst quarter for airlines, especially in ones without Easter holiday like this one. Comparison to competitors would be a good gage.
 
cledaybuck
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 6:29 pm

tphuang wrote:
frmrCapCadet wrote:
Profit margins at or over 10% are desirable even for airlines. Profit margins under 5% are worrisome.

Q1 is typically the worst quarter for airlines, especially in ones without Easter holiday like this one. Comparison to competitors would be a good gage.

What are the comparisons (I realize everyone has not reported yet)?
 
MIflyer12
Topic Author
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 6:33 pm

See my original post for reporting dates.

The problem with rationalizing poor performance as a first quarter problem is that it ignores B6's poor year-over-year comparison.
 
tphuang
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 7:09 pm

MIflyer12 wrote:
See my original post for reporting dates.

The problem with rationalizing poor performance as a first quarter problem is that it ignores B6's poor year-over-year comparison.


It was not a good quarter as I said and the guidances imo are pretty poor too. But saying that under 5% margin is bad without looking at rest of the industry is not a good way to go. I think we will see them below average in margins across domestic airlines this quarter and that's what makes it a poor quarter.
 
cledaybuck
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 7:28 pm

cledaybuck wrote:
tphuang wrote:
frmrCapCadet wrote:
Profit margins at or over 10% are desirable even for airlines. Profit margins under 5% are worrisome.

Q1 is typically the worst quarter for airlines, especially in ones without Easter holiday like this one. Comparison to competitors would be a good gage.

What are the comparisons (I realize everyone has not reported yet)?

Answering my own question, it looks like the operating margins so far are:
B6-4.1%
DL-9.7%
UA-5.2%
 
richierich
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Re: JetBlue earnings release 4/23/19

Wed Apr 24, 2019 9:29 pm

tphuang wrote:
frmrCapCadet wrote:
Profit margins at or over 10% are desirable even for airlines. Profit margins under 5% are worrisome.

Q1 is typically the worst quarter for airlines, especially in ones without Easter holiday like this one. Comparison to competitors would be a good gage.


With the garbage weather and significant delays this past weekend in the Northeast - and across Florida and the southeast Friday night into Saturday - I would say even the Easter weekend was a loser for airlines that have a heavy number of flights in the usual delay-prone airports.
None shall pass!!!!
 
UALifer
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 1:45 am

cledaybuck wrote:
cledaybuck wrote:
tphuang wrote:
Q1 is typically the worst quarter for airlines, especially in ones without Easter holiday like this one. Comparison to competitors would be a good gage.

What are the comparisons (I realize everyone has not reported yet)?

Answering my own question, it looks like the operating margins so far are:
B6-4.1%
DL-9.7%
UA-5.2%


Not a good sign for B6. If you have a worse margin than UA in Q1, something is wrong. B6 has solid exposure to highly profitable Q1 flying (e.g. Florida, Caribbean) whereas UA’s hub structure and overall market strength lends itself to poor performance in Q1. Maybe these numbers speak more to a good UA quarter as opposed to bad B6 quarter, but it’s troubling nonetheless.
 
Bluewho
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 2:15 am

UALifer wrote:
cledaybuck wrote:
cledaybuck wrote:
What are the comparisons (I realize everyone has not reported yet)?

Answering my own question, it looks like the operating margins so far are:
B6-4.1%
DL-9.7%
UA-5.2%


Not a good sign for B6. If you have a worse margin than UA in Q1, something is wrong. B6 has solid exposure to highly profitable Q1 flying (e.g. Florida, Caribbean) whereas UA’s hub structure and overall market strength lends itself to poor performance in Q1. Maybe these numbers speak more to a good UA quarter as opposed to bad B6 quarter, but it’s troubling nonetheless.



And yet the stock is up.
I don’t think it’s overly troubling, they laid out the issues and beat the st expectations. Hey at least they give realistic guidance.
 
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ECAMerror
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 4:39 am

Brickell305 wrote:
Bluewho wrote:
Brickell305 wrote:
Actually, one would think that if the industry as a whole is doing well, it would be a boon for all airlines.



Who said anything about Chapter 7 or any other form of bankruptcy? Simply pointing out that net income significantly declined YoY and so did RASM for that matter isn't saying that the company is going out business. It's simply stating the fact that B6's finances are worsening. When that is looked at int he context of the fact that they have uber-competitive hubs (and the pricing pressure that accompanies that), the fact that their costs are set to rise, even moreso now that they plan an extremely expensive transatlantic expansion and that their main competitors are stronger financially overall and are therefore better positioned to battle it out long term, will make it difficult for them going forward.




How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?

As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.


Why do you believe ETOPS is a significant investment?
 
winginit
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 5:21 am

ECAMerror wrote:
Brickell305 wrote:
Bluewho wrote:



How expensive is this trans Atlantic deal. Sure slots and ETOPS but it’s the same plane, same mx, same training. You keep saying it’s so expensive. How much are we taking?

As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.


Why do you believe ETOPS is a significant investment?


I'm curious about this as well. I have some friends at WN who were closely involved in what had to be done in order for WN to serve Hawaii and it honestly didn't sound like a big deal or a notable financial investment.
 
Bluewho
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 12:28 pm

winginit wrote:
ECAMerror wrote:
Brickell305 wrote:
As you yourself pointed out, both the slots and becoming ETOPS certified are both significant investments. It will also be expensive competing against deeply entrenched alliances on transatlantic routes. It’s not a simple (or cheap) undertaking by any means.


Why do you believe ETOPS is a significant investment?


I'm curious about this as well. I have some friends at WN who were closely involved in what had to be done in order for WN to serve Hawaii and it honestly didn't sound like a big deal or a notable financial investment.



It isn’t. It’s just being used to fit a narrative. If anything they are going over the pond as conservatively as you can.
 
dolphinflyer
Posts: 277
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 12:50 pm

What about Alaska and jetBlue working out some sort of agreement under which both carriers would focus on joint Mint service in key, large transcon markets (BOS/JFK/DCA/MCO/FLL with SEA/PDX/SFO/LAX/SAN) and use the duplicate slots (esp. at JFK) to launch commercially desirable (AS-style F/Y service) times in key secondary transcon markets (i.e. 7am-8am departures ex-SJC/SMF/BUR/ONT and 5pm-7pm departures ex-JFK)) as well as (AS-style F/Y service) in transcon markets ex-LAX to key secondary East Coast markets like PVD/BDL/ALB/BUF/ORF/RIC/CHS/SAV/JAX/RSW). Both carriers would stand to benefit from such a cooperation and provide real competition to the Big 3.
 
tphuang
Posts: 2757
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 1:05 pm

UALifer wrote:
cledaybuck wrote:
cledaybuck wrote:
What are the comparisons (I realize everyone has not reported yet)?

Answering my own question, it looks like the operating margins so far are:
B6-4.1%
DL-9.7%
UA-5.2%


Not a good sign for B6. If you have a worse margin than UA in Q1, something is wrong. B6 has solid exposure to highly profitable Q1 flying (e.g. Florida, Caribbean) whereas UA’s hub structure and overall market strength lends itself to poor performance in Q1. Maybe these numbers speak more to a good UA quarter as opposed to bad B6 quarter, but it’s troubling nonetheless.


more relevant is the adjusted pre-tax margin since that excludes special items
B6 - 3.7%
UA - 4.1%
DL - 9.0%
WN - 9.8%
So B6 and UA are about the same ballpark. We will see how Q2 looks, but I would expect about the same numbers too.
 
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enilria
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 1:11 pm

LHUSA wrote:
Dieuwer wrote:
Wall Street disagrees with the JetBlue haters in this thread. The Street is cheering JetBlue. Stock up 4+% (2 PM EST).


Someone simply pointing out declining performance does not make them a hater. I suspect the market has responded well since B6 beat forecasts.
MIflyer12 wrote:
Delta reported 4/10
UA reported 4/16
AS due 4/25
WN due 4/25
AA due 4/26
Spirit due 5/2

http://blueir.investproductions.com/inv ... 23-04-2019

Not strong, IMHO. Declining RASM year-over-year. Too much expansion/wrong markets?

GAAP pre-tax income of $58 million, a decline of 48.5% from $113 million in the first quarter of 2018. Excluding the one-time costs, adjusted pre-tax income of $70 million(1), a decline of 38.2% from the first quarter of 2018.
Pre-tax margin of 3.1%, inclusive of the one-time costs, a 3.3 point decline from the first quarter of 2018. Adjusted pre-tax margin of 3.7%(1), a 2.7 percentage point decline year over year.


CASM ex-fuel is expected to increase between 1.5% and 3.5% for the second quarter of 2019, principally driven by engine maintenance timing and the year-over-year impact of the pilot contract effective on August 1st, 2018.

Average stage length increased 5% and RASM declined 3.2%. Stage adjusted RASM was flat. Whenever you see changes in RASM, you really should look at stage length first. The M stands for "Miles" you know. Costs (and thus average fare levels loosely based on cost) are basically a takeoff component (getting to altitude and being serviced at the airport are the same cost regardless of distance) and then an amount for distance. Thus, average fare per mile declines with distance. So, this whole comment was spurious.
 
frmrCapCadet
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 2:26 pm

dolphinflyer wrote:
What about Alaska and jetBlue working out some sort of agreement under which both carriers would focus on joint Mint service in key, large transcon markets (BOS/JFK/DCA/MCO/FLL with SEA/PDX/SFO/LAX/SAN) and use the duplicate slots (esp. at JFK) to launch commercially desirable (AS-style F/Y service) times in key secondary transcon markets (i.e. 7am-8am departures ex-SJC/SMF/BUR/ONT and 5pm-7pm departures ex-JFK)) as well as (AS-style F/Y service) in transcon markets ex-LAX to key secondary East Coast markets like PVD/BDL/ALB/BUF/ORF/RIC/CHS/SAV/JAX/RSW). Both carriers would stand to benefit from such a cooperation and provide real competition to the Big 3.


I think something like this could work, and have thought so for a long time. Their natural niche would be a little better service and a little better comfort that the big three. Even economy minus, but delivered well can be a feature.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
PlanesNTrains
Posts: 9527
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 2:28 pm

dolphinflyer wrote:
What about Alaska and jetBlue working out some sort of agreement under which both carriers would focus on joint Mint service in key, large transcon markets (BOS/JFK/DCA/MCO/FLL with SEA/PDX/SFO/LAX/SAN) and use the duplicate slots (esp. at JFK) to launch commercially desirable (AS-style F/Y service) times in key secondary transcon markets (i.e. 7am-8am departures ex-SJC/SMF/BUR/ONT and 5pm-7pm departures ex-JFK)) as well as (AS-style F/Y service) in transcon markets ex-LAX to key secondary East Coast markets like PVD/BDL/ALB/BUF/ORF/RIC/CHS/SAV/JAX/RSW). Both carriers would stand to benefit from such a cooperation and provide real competition to the Big 3.


I appreciate the explanation of your vision, but I just don't see what's in it for B6? If transcon Mint is performing as well as noted, they really don't need to be working with AS to spread the wealth.
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
Abeam79
Posts: 296
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Re: JetBlue earnings release 4/23/19

Thu Apr 25, 2019 4:05 pm

tphuang wrote:
UALifer wrote:
cledaybuck wrote:
Answering my own question, it looks like the operating margins so far are:
B6-4.1%
DL-9.7%
UA-5.2%


Not a good sign for B6. If you have a worse margin than UA in Q1, something is wrong. B6 has solid exposure to highly profitable Q1 flying (e.g. Florida, Caribbean) whereas UA’s hub structure and overall market strength lends itself to poor performance in Q1. Maybe these numbers speak more to a good UA quarter as opposed to bad B6 quarter, but it’s troubling nonetheless.


more relevant is the adjusted pre-tax margin since that excludes special items
B6 - 3.7%
UA - 4.1%
DL - 9.0%
WN - 9.8%
So B6 and UA are about the same ballpark. We will see how Q2 looks, but I would expect about the same numbers too.

In the end comparing right out numbers compared with long established carriers with double and triple the longevity and double to triple the fleet is a little more complicated. You have to remember B6 right now is heavily investing in the future of the airline, (ie new fleet types, certification of new ops specs and such with it, new continents, new infrastructure, building up more massive presence in their core focus cities). When you compare that to the carriers your listing, all now well established and matured, I would be curious like to see what their margins were when they were building up to the market share at their respective hubs/focus cities, which led them all to get assistance from ch11 I might add, something B6 never did. It’s an expensive endeavor. They are also doing it conservatively and smart. But years down the road when all the pieces fall in place, the revenues/margins will be one to be smitten of. Amazon was losing tons of money in the 90’s when they were branching out from being a quaint lil online bookstore to the massive online retailer they are now. And now look at them. B6 They are still maturing, just going from it’s latter college years do to speak when all the peers one compares it through are well matured into their “latter phase”
This is why the majors act aggressively as soon as B6 makes a move,ie tatl, they know where they are headed towards with their investment. B6 is playing the cards smart, but let me remind you, all more for its future.

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