Jb Cost Savings
radarlove said:
You didn't major in math in college, did you?
If you actually saved $40MM this year, JBLU would break even for the year, even after your $42MM loss in the first quarter. News Flash: Not.
If you were to save $100MM, you would earn more profit for the year than LUV. Double news flash: Not.
In 2005, JBLU's TOTAL REVENUE was only $1,700MM and you're telling me that pilot-induced cost savings are going to save $100MM? Twenty percent of your entire cost structure (unfortunately, JBLUs costs are higher than revenue) is going to be saved?
That would send your profit margin through the roof, better than all of the other airlines combined. Not.
Your figures are wrong.
Understand these are potential savings.. I am not saying that JB came up with ideas to save money flipped a switch and put 140 million into their pockets. What i am saying is that the company has established policies and procedures that could potentially save the company that amount.
Let me give you an example:
Lets say you have 100 planes.
For example lets say that you have 95 employees per plane and if you average the salaries of all areas of the company lets say the average salary per employee is $65,000.
That comes out to $617,500,000 in payroll.
As deliveries come in the company streamlines their employee base to a level that is similiar to Airtran ( Around 65) or Southwest (Around 80) but for simplicity sake lets use the same 100 airplane amount
Now take 80 employees per plane at $65,000 x 100 planes and you get $520,000,000 in payroll.
The hypothetical savings is approximately $97,500,000 per year. Now lets say that the company expands to 200 planes offset the additional salary expense as the workgroup matures and you can see that there is a potential yearly savings of 100 million or more.
Jetblue has a very lean operation but we are overstaffed in many places to deal with the rapid growth that jb has experienced over the last 6 years.
As for the 40 million I discussed above: JB is aiming for over 80% use of single engine taxi, We already use a lower Thrust Reduction Altitude, Enter Updated Winds into the MCDU, Fly at Optimum Altitudes when possible, Use of Flaps 3 for landings, Limit use of APU on ground, lowering min fuel at some airports when the weather is good we are even modifying the jetbridges to allow us to hook up the ground power prior to them being secured on the plane with the door open. That will alllow us to get the engine shut down down anywhere from 60-120 seconds sooner. At $10 per min at idle and a svings of $10-$20 per flt x 146,000 that alone could save nearly 3 million per year!
Now we have just over 400 flights per day..
Do the math that is about 146,000 flights per year
Take $40 million and divide it out and it is about $273 per flight or about 125 gallons of gas. Peanuts when you consider nearly 5000 gallons of burn on a transcon.
I take my hat off to JB We are all aware of where the legacies started out with the quest to save money..
