Bloomberg News
June 15, 2006
JetBlue Airways Corp., which is scaling back growth plans after two straight quarterly losses, has reached a preliminary agreement to sell five Airbus A320 jets, chief executive David Neeleman said yesterday.
JetBlue wants to produce as much as $80 million in savings and added revenue this year. The Forest Hills-based carrier said in April it would sell two to five A320s, and it later decided to sell all five because of strong interest from potential buyers.
The airline "is very pleased with" the pending sale, Neeleman said at a Merrill Lynch transportation conference in New York. "It's not certain, but it's in the works," he said. He didn't give a price or identify who's buying the planes.
JetBlue, which began flying in 2000, reported its first losses as a publicly traded company in the final quarter of 2005 and the first quarter of 2006. The low-cost carrier said it failed to respond quickly enough to rising fuel prices, expanded too fast and didn't manage its fare system well enough.
Airbus' 156-seat A320s are valued at about $20 million each when sold used, according to data from the Teal Group, an aerospace consulting firm based in Fairfax, Va. A new A320 has a list price of $62 million to $66.5 million.
The jet sales are slowing JetBlue's capacity growth this year to 20 percent to 22 percent, down from a planned 28 to 30 percent. The airline expects the same growth rate next year because it also delayed deliveries of 12 more planes to 2011 and 2012 from 2007 and 2009, Neeleman said. "We have business for the existing airplanes we have on order," he said. Still, he said JetBlue may consider selling more planes. "The offers we received were in line with what we expected. We're pleased with that and could expect to do some of that in the future if the need warranted it."
Neeleman yesterday repeated an earlier forecast that the carrier will make money in the second, third and fourth quarters this year.
June 15, 2006
JetBlue Airways Corp., which is scaling back growth plans after two straight quarterly losses, has reached a preliminary agreement to sell five Airbus A320 jets, chief executive David Neeleman said yesterday.
JetBlue wants to produce as much as $80 million in savings and added revenue this year. The Forest Hills-based carrier said in April it would sell two to five A320s, and it later decided to sell all five because of strong interest from potential buyers.
The airline "is very pleased with" the pending sale, Neeleman said at a Merrill Lynch transportation conference in New York. "It's not certain, but it's in the works," he said. He didn't give a price or identify who's buying the planes.
JetBlue, which began flying in 2000, reported its first losses as a publicly traded company in the final quarter of 2005 and the first quarter of 2006. The low-cost carrier said it failed to respond quickly enough to rising fuel prices, expanded too fast and didn't manage its fare system well enough.
Airbus' 156-seat A320s are valued at about $20 million each when sold used, according to data from the Teal Group, an aerospace consulting firm based in Fairfax, Va. A new A320 has a list price of $62 million to $66.5 million.
The jet sales are slowing JetBlue's capacity growth this year to 20 percent to 22 percent, down from a planned 28 to 30 percent. The airline expects the same growth rate next year because it also delayed deliveries of 12 more planes to 2011 and 2012 from 2007 and 2009, Neeleman said. "We have business for the existing airplanes we have on order," he said. Still, he said JetBlue may consider selling more planes. "The offers we received were in line with what we expected. We're pleased with that and could expect to do some of that in the future if the need warranted it."
Neeleman yesterday repeated an earlier forecast that the carrier will make money in the second, third and fourth quarters this year.
