JB gettin nervous?

[Lampshade]

[FONT=ARIAL, Helvetica, Geneva][FONT=ARIAL, Helvetica, Geneva][FONT=ARIAL,]NEW YORK, March 8 (Reuters) - JetBlue Airways Corp. would consider deferring deliveries of some aircraft or issuing new equity as it seeks to keep its debt under control, its chief executive said on Wednesday.

"We're going to look at (slowing deliveries) very seriously as we look at our routes and where the capability is and where the substantial profitability (is)," David Neeleman, the airline's founder, said at an investor conference. He said the airline, which is forecasting a full-year loss, would also consider selling new shares as it seeks to keep its debt at no more than 75 percent of its total capital.

If the New York-based airline did delay deliveries of aircraft it has on order from Airbus or Embraer , it would be a significant retreat from the aggressive growth strategy the airline has pursued so far.

Neeleman said that given strong demand from airlines elsewhere for both of JetBlue's mainstay planes, the Airbus A320 and the smaller Embraer E-190, it would be easy to defer the planned deliveries. "One of the advantages we have is that we have airplanes that are very desirable on the world market," he said.

The airline is slated to take delivery of 17 A320s this year and 17 next, and 18 E-190s in each of 2006 and 2007, boosting its fleet to 162 planes from 92 at the end of 2005.

[ END - http://www.reuters.com Fair use excerpt ]



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[grog_sit_reserv]

Let see, popcorn, beer.... This is gonna be great!

 

[lowecur]

smart move!

35 a/c per year is too many without a liquidation of a legacy in the near term. I doubt they will defer on the 190, as that is where their RASM bread will be buttered in the next 3 to 5 years. The 320 on the other hand makes sense, as the growth from AirTran, SWA, and Virgin USA will be based on similar sized a/c. In other words, grow where you can make money.

imp:

 

[32LT10]

Wow, I did not expect to see this (TIC). The unwinding process of the blew hoos is going to be enjoyable to watch. The circus is leaving one ring at a time.

 

[Dave Siegel]

Hi, it's Dave!

I hate to say that I told you so, so I'll let Frank do that. In this tough economic times, unless pilot wages can be controlled, anticipate this trend to continue. This is one of the few intelligent decisions Jet Blue has made. Clearly they are not in the same league as Southwest and likely never will be.

9 years, 10 months may be too optimistic after all.


I'll talk to you again soon.

 

[GogglesPisano]

Doe anyone have a link that lists airlines' overall debt situation (ie: debt-to-revenue or debt-to-capital)?

 

[fam62c]

This could be a problem. SWA will have the same problem at some point in the future. Once the growth slows down the costs will rise. Growth brings in new airplanes that are under warranty and new employees at the bottom of the payscales. The discount airlines bank on high growth rates to keep costs under control. Southwest is in the same boat. Once their fuel hedging slows down and the growth rate on a percentage basis slows down (maintaining high growth on a percentage basis becomes much harder as the airline gets bigger) their costs will rise substantially. Jet Blue is still a pretty new carrier and the have new equipment and new employees at low pay rates and they are already losing money. This is a bad omen because where can JetBlue really cut costs, they are already one of the cheapest providers. I think that they made a couple mistakes: they were too quick to add a second fleet type with it's related costs and inefficiencies (SWA has been very smart here) and they have a ton of scheduled deliveries without any real idea of where they can place the planes to operate profitably. I'm not a JetBlue basher by any means and I would like to see ALL of the airlines do well but there is simply way to much capacity out there for that to happen. Jet BLue will have a tough time getting back on track without cheap fuel or reduced competition.

 

[FNG320]

Inaccurate Reporting.

[FONT=ARIAL, Helvetica, Geneva][FONT=ARIAL, Helvetica, Geneva][FONT=ARIAL,]NEW YORK, March 8 (Reuters) - JetBlue Airways Corp. would consider deferring deliveries of some aircraft or issuing new equity as it seeks to keep its debt under control, its chief executive said on Wednesday.

"We're going to look at (slowing deliveries) very seriously as we look at our routes and where the capability is and where the substantial profitability (is)," David Neeleman, the airline's founder, said at an investor conference. He said the airline, which is forecasting a full-year loss, would also consider selling new shares as it seeks to keep its debt at no more than 75 percent of its total capital.

If the New York-based airline did delay deliveries of aircraft it has on order from Airbus or Embraer , it would be a significant retreat from the aggressive growth strategy the airline has pursued so far.

Neeleman said that given strong demand from airlines elsewhere for both of JetBlue's mainstay planes, the Airbus A320 and the smaller Embraer E-190, it would be easy to defer the planned deliveries. "One of the advantages we have is that we have airplanes that are very desirable on the world market," he said.

The airline is slated to take delivery of 17 A320s this year and 17 next, and 18 E-190s in each of 2006 and 2007, boosting its fleet to 162 planes from 92 at the end of 2005.

[ END - http://www.reuters.com Fair use excerpt ]



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I was pretty unhappy about this also. However I recently talked to some of our pilots who were in the latest recurrent training class (two days ago) where David N was speaking. His comments/response were to a reporter that asked the some question and published the recent report. He asked some leading questions, but didn't ask enough questions to get the whole story and then mis-quotoed him and slanted the story. The reporter asked if JetBlue had "considered" delaying deliveries. Answer his question, David said yes. All options were considered. It would be prudent to consider all options. (third hand paraphrase) However at recurrent, David then stated that JetBlue has no intention of delaying any aircraft deliveries. Ther reporter didn't ask this question. He just ASSumed the rest.

You have to remember, the leadership is responsible to "look" at all options and how they would be used. But JetBlue is not planning on delaying any aircraft deliveries.

The reporter asked a leading question, then took the answer and twisted it to mean something else, He did not as the next logical questions. Looks like someone trying to just make some headlines. Pretty shoddy reporting.

Just my opinion.....

FNG

 

[Frank Lorenzo]

JetBlue Airways Shares Tumble on Analyst's Concern About Problems Beyond Fuel Prices

NEW YORK (AP) -- JetBlue Airways Corp. shares tumbled more than 7 percent Friday after a Wall Street analyst downgraded the company, citing structural problems that could lead to losses. Bob McAdoo, an analyst with Prudential, lowered his rating on the New York-based discount airline to an "Underweight" or "Sell," from a "Neutral Weight," or "Hold." The ratings move came after JetBlue reported last month its first quarterly loss, and guided to a 2006 loss due to higher fuel prices.
However, McAdoo suggested problems at JetBlue might stem from broader issues at the carrier. He said 17 of the last 20 markets the airline added have not been profitable, even with reduced fuel prices.



Well guys, I told you so. You're losing money, even with cheap dinosaur juice. There is only one logical conclusion - Neeleman is paying his employees too much money.

Here is Frank's free advice for the day. Take a pay cut to retain the talent you have in the executive suites. You get what you pay for, and time has proven that a highly compensated executive suite full of Harvard and Wharton Business School graduates is the only way to go.

 

[Mamma]

Frankie,
Love the advice! Just wondering if you have read your "unauthorized" biography as of late? Are you sure you are fit to make such suggestions?

[FONT=Trebuchet MS, Arial, MS Sans Serif]Frank Lorenzo[/FONT]

[FONT=Trebuchet MS, Arial, MS Sans Serif]Francisco (Frank) A. Lorenzo was one of the most notorious players in the history of commercial aviation in the United States. Born in 1940, he was the son of Spanish immigrants in Queens in New York. He went to Columbia University and then received a business degree from Harvard Business School in 1963. He had an early interest in aviation that led him to take control of Texas International Airlines (TIA), a company that was on the verge of bankruptcy, in 1971. The Deregulation Act of 1978 allowed Lorenzo to expand his business dealings and he systematically began to acquire companies such as Continental Airlines, New York Air, Frontier Airlines, and Eastern Airlines, in his bid to compete with the new non-unionized airlines. By the mid-1980s, he had acquired a reputation for vicious business practices that were particularly unfair to the labor force. By filing for bankruptcy at different points in his career, he was able to bypass unionized labor and impose harsh working conditions on the employees of his various corporations. His rise to the top was finally thwarted when Eastern Airlines collapsed in 1991 and a U.S. bankruptcy court ruled that Lorenzo was unfit to run the company. Lorenzo left the debacle with a vast personal fortune and tried to found a new airline called Friendship in 1993, but the U.S. Department of Transportation did not grant him permission.[/FONT]​