Boyd: Jetblue/Southwest headed for financial difficulties

[lowecur]

I think Mr. Boyd is a bit ahead of himself as capacity should retract in the next 12 months. He questions WN's fuel hedge expiration and competition between LCC's as the over riding factor. While I agree that the fuel hedge will unwind a bit, it's the double edge sword of payroll and hedge expirations that will complicate relationships at the "happy house."

He doesn't seem to take into account the demise of Independence or the shrinkage of domestic landscape at both NWA and DL. This will certainly benefit Jetblue and should set the table nicely for their expansion into the mid-size markets.

"Airline consultant Mike Boyd of the Boyd Group in Evergreen, Colo., warns that the legacy carriers are making a mistake if they try to transform into Southwest. That airline focuses on popular routes between large cities and cannot make money flying to small cities.

"You can't operate a global airline like that," Boyd said.

Boyd predicts that the low-fare airlines will face significant troubles in coming years, as their fuel hedges expire and they increasingly begin to compete with one another rather than the legacy airlines.

"In a year or so, we're going to be talking about how Southwest and JetBlue are in so much trouble," he said.


http://www.dfw.com/mld/dfw/business/12679168.htm

 

[SkywayFO]

The competitive edge is going away that is for sure. I think Boyd is and idiot but he may be right on this one.

 

[Heavy Set]

Hey SkywayFO,

Check your PMs - I sent you one a few days ago.

Heavy

 

[General Lee]

Isn't it amazing that when the legacies are finally down and out and may retract some service, and Southwest and Airtran have an opportunity to move into some markets, that Boeing has to stop production of planes? Southwest and Airtran may not be getting as many 737-700s as they wanted for the rest of the year because of the strike. Amazing. We could sell you some used 737-200s....


Bye Bye--General Lee

 

[klhoard]

. . .<snip>. . We could sell you some used 737-200s....


Bye Bye--General Lee

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Sorry, I think we have dibs on those airplanes.
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[FlyBoeingJets]

"Airline consultant Mike Boyd of the Boyd Group in Evergreen, Colo., warns that the legacy carriers are making a mistake if they try to transform into Southwest. That airline focuses on popular routes between large cities and cannot make money flying to small cities.

"You can't operate a global airline like that," Boyd said.

Boyd predicts that the low-fare airlines will face significant troubles in coming years, as their fuel hedges expire and they increasingly begin to compete with one another rather than the legacy airlines.

"In a year or so, we're going to be talking about how Southwest and JetBlue are in so much trouble," he said.

Boyd is master of the obvious.

"You can't operate a global airline like that (SWA)."-- No kidding. Maybe thats why SWA is not flying international.

"(LCCs) begin to compete with one another"--That will happen as LCC fleets continue to get bigger and Legacies in BK get smaller. Do you think UAL's and AA's fleets are smaller with over 4200 pilots on furlough. Uhh....maybe

"LLCs will face significant trouble as their fuel hedges expire."--The U.S. airline industry is forecast to have huge losses due to high oil, overcapacity and increasing airport and security fees. All but one of the big six is in BK or emerging with new low costs and keeping fares low. I say this one is a slam dunk.

Boyd looks at what the experts are saying then claims their opinions as his own.

 

[FlyBoeingJets]

SWA and JetBlue in trouble in a year or so???

If the CASM's continue to come down and debt owed is allowed to be wiped away, you betcha.

America wants their low airfares and competition. If they have that nothing else matters.

Look out cargo industry. I predict your time will come too. I see way too many DHL ads and trucks rolling thru the neighborhood.

 

[GaryK]

Boyd makes some bad assumptions. Things change, no one can predict the future we will make whatever changes we need to in order to continue being sucessfull and increase shareholder value.

 

[Clyde]

Look out cargo industry. I predict your time will come too. I see way too many DHL ads and trucks rolling thru the neighborhood.

I see a DHL truck rolling through my neighborhood quite a bit each day, but it is because he is lost.

DHL's lack of reliability speaks for itself. Most people ask "D-H-who?"

 

[Crash Pad]

Yep D-H-who... I suppose Southwest was always a household name. Toyota was a cheap import and so was honda. Steel is the backbone of America.

In Captialism someone makes a ton of money. Eventually people see said someone making a ton of money and say "I think I can do it better". Over time the ton of money is reduced to a half ton... Then a quarter ton... Next thing you know you are TWA, Pan Am, Braniff, DAL, NWA, UAL, etc...

Remember it took a while for steel, cars, and majors... LCC and cargo your time is coming... Hopefully some of you pilots, however, get to be similar to the recently departed DAL pilots... Hopefully you get to be some of the few blue collar workers in America with a golden... ok make that silver parachute.