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CAL's Gordy B on Jetblue

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Well-known member
Nov 27, 2001
I found this on the MSN/Reuters web site. I have question at the bottom for jblu or other in the know.

www.msn.com in the stock quote section enter: jblu

Continental CEO sees dim prospects for JetBlue
April 17, 2002 4:03:00 PM ET

HOUSTON, April 17 (Reuters) - Continental Airlines (CAL) Chief Executive Gordon Bethune said on Wednesday he was skeptical that upstart rival JetBlue Airways (JBLU) would succeed and said its soaring stock price was proving P.T. Barnum correct.

Barnum, who founded the Barnum & Bailey Circus, was famous for supposedly saying "There's a sucker born every minute."

Bethune made his comments at Continental's annual shareholder meeting in response to a question about his thoughts on JetBlue's stock price rising 70 percent since an initial public offering on Friday. It opened at $27, soared to $45 the same day and has stayed at that level.

"It just says that P.T. Barnum was right," the outspoken Bethune said, drawing laughter from the audience.

"Since 1978 the record pretty well shows that no start-up airline...has really been successful, so the odds of JetBlue having long-term success are remote," he said.

"I'm not going to say it can't happen because stranger things have happened, but I personally believe P.T. Barnum was, in that respect, correct."

Officials at two-year-old JetBlue, a discount airline based in New York, were not immediately available for comment.

Continental would love to see similar success in an IPO for its regional airline unit, ExpressJet Holdings Inc. (XJT), which was in the process of being completed on Wednesday. It was expected to be priced between $14 and $16 per share when it hits the market on Thursday.

"We've had a lot of very, very favorable responses from institutions and retail sales and we expect them to go complete that transaction sometime today," Bethune said.

Bethune also said that Continental, still recovering from the effects of the Sept. 11 attacks, hoped to boost its cash reserves from the current level of about $1.1 billion to $1.5 billion by year's end as a cushion against future shocks.

He said the airline, which is the nation's fifth largest, had 55,000 employees when the attacks occurred, but laid off 8,000 afterwards in cost-cutting measures. The lost work force is slowly being brought back, he said.

"Today I'm pleased to report we are back above 48,000 and we continue to rehire our colleagues as demand returns," Bethune said. REUTERS

© 2002 Reuters

I didn't peg Mr. B for a guy who talks out is a$$. What do you guys think?

Also is it true that Jblu still dosen't pay ramp/terminal/landing fees?

I've also herd that they don't have to pay mx or lease payments on the a320's for a specified amount of time.

Is this why they are doing so well?

Again this is just something I herd and am not knocking the place. If anyone can clear this up I'd appreciate it as I tought Jblu was a good place to go.

Happy Flying
I don't know about ramp/terminal fees, but I do think that they do not have to pay leases on their Airbuses until 2003. Pretty easy to make a profit when you your not even paying for your airplanes.
1) "I didn't peg Mr. B for a guy who talks out is a$$. What do you guys think?"

Huh. I completely disagree. I've read his book and absolutely think he talks out his a$$. I wonder what he thinks of SWA? Of course, I respect your opinion and kind of respect Gordon's opinion, but since you asked...I think "Mr. B" doesn't stand for Mr. Bethune, but rather, "Mother Beeattch"

2) "Also is it true that Jblu still dosen't pay ramp/terminal/landing fees?"

False. JB, in fact, pays among the highest landing fees in the world flying out of JFK, the most expensive airport in CONUS.

3) "I've also herd that they don't have to pay mx or lease payments on the a320's for a specified amount of time."

False. This had been asked before in other threads so do a search if you'd like, epecially on the thread comparing FedEx with jetBlue months ago. Others in the company know more here, but Al Spain told me and others at my interview, this claim is completely false. The company makes regular payments...often in cash.

4) "Is this why they are doing so well?"
Everyone is entitled to their opinion, but since you asked...at the forefront is their sound, solid business plan, their people, their values, their capital, their costs, their market niche, their equipment, their safety/security record, their performance, their loads factors and customer base, etc.
Sorry to disappoint you guys, but we make aircraft lease payments every month, landing fees every landing, and terminal lease payments. You are right on one point.... our aircraft are under warrenty just as all new airplanes are. Yes, we have said many times that our mtx cost will increase down the road. As for Bethune, do you really think he or any other airline CEO (other than our own) is going to make any positive remarks about our success? All of them would love to see us go away, so making negative remarks does not suprise me. And don't forget the XJT IPO coming out. I'm sure he would like to draw investors away from JBLU and flock to XJT or CAL. You think Bethune is cruel? Ask Don Carty what he thinks of JBLU....
I agree the CEO of the biggies are displaying sour grapes about Jet Blue. I have read Bethune's book and I think he is a self absorbed A-hole, but at least he knows how to manage an airline alot better than my ex-employer could.
It never ceases to amaze me how people will make up stories to explain what they cannot understand. The secret is no secret--it is a brilliant business plan and inspired leadership who cares about people--employees and customers alike. There is no smoke and mirrors here. In fact, going public has made even more details of our operation open to scrutiny. Every time we enjoy success there is somebody who says it is a fluke. Funny thing is that the successes continue time and time again. Let the pundits say what they may, history will prove who is right.

I'm very proud and thankful to be part of the jetBlue team. The company is full of great people and our customers love us. I really enjoy saying goodbye to our passengers as they deplane so I can hear comments like, "That was the best flight I've ever taken." I hear it several times almost every time I fly. (BTW, that goes a long way toward job satisfaction for me!) Demand for our stock exceeded supply by 26 times and many shares were sold in blocks of 100-500, indicating that smaller investors who believe in our company have invested in our future. (I expect that many of our new stockholders are also our customers.) As long as we keep the customer happy with low fares and great service I expect we will continue to perform.
What is Gordy smoking? I used to think he did a whale of job turning CAL around, but Gord-o's seriously in denial here.

Look at the record - David Neeleman has NEVER lost money in the airline industry. He turned MorrisAir from a tiny charter operator into a respectable scheduled service, sold it for a tidy sum to SWA, and now took JB from zero to profitable in less than 2 years.

Wake up and smell the Jet-A, Gord.

Go JetBlue!
I am pretty sure that Jet Blue is here to stay. They are trying to do things "right" and the employee force is pretty motivated. There were similar comments when Jet Blue was lobbying for take-off and landing rights in NY, when they confirmed their order with airbus etc etc etc.

However, as they say ... " only time will tell."

By the way is Neeleman a pilot himself?

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