JBLU Stock

[SpeedBird]

I believe the biggest hit to jetBlue came from new low-cost capacity that was introduced in October by AWA.

They initiated non-stop service from JFK to LAX with only a couple of A319s, but it caused a competitive response by American and others to match fares, in effect adding a whole bunch of new low-cost seats that didn't exist on that market previously. Since LGB is considered by many to be a secondary airport, and thus less convenient to use (versus LAX), jetBlue has had to sweeten the pot by keeping their fares more competitive to retain a percentage of their customers who could now fly to LAX for a comparable price.

Add to this the impact from the wildfires in Southern California and you have the essential elements for a relatively bad quarter for jetBlue, when one compares to YOY statistics.

I also believe that the LGB-ATL service was a drain on their business as well. on a smaller scale they suffered from the same problem that I just described with AWA and their non-stop LAX-JFK service.

As a final note, AWA also will be flying non-stop service between BOS-LAX about the same time that jetBlue will be initiating their new service to BOS-LGB. I would expect to see the same competitive conditions on this new market with same effect on revenue as the LAX-JFK service.

Now it needs to be highlighted that this is having a negative impact on AWA and American airlines also; both airlines which have higher costs than jetBlue. The potential long-term problem for jetBlue is that they have invested heavily in the future of LGB as a focus city, and it may be a persistent issue as more LCCs increase transcon service from various points to Southern California. I think there is news out that states the Dick Branson is scouting LAX as a major hub for his intended Virgin USA LCC. If true, these types of competitive changes will surely slow jetBlue's rapid growth up to this point, and perhaps force a change of stratagem by the jetBlue braintrust.

 

[LearLove]

Holly crapoly, that bitch took a digger!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Now if they were like U, next week their CEO will come out with a memo saying its all the pilots' fault.

 

[ShaggyF16]

fuzzy math

Some interesting points in Souder's article, but like most reporters these days, she neglects to understand the math behind the financials.

"JetBlue will add about 35% to 37% more capacity next year, slowing its growth. The airline's capacity in November was up 53% compared with a year earlier, as JetBlue added frequency across its system."

Our growth hasn't exactly slowed, per se. We continue to accept new jets at a constant (or slightly accelerated) rate. What that naturally means is the percentage capacity growth looks smaller every year as a result of constant real growth.

Not exactly a harbinger of bad tidings.

Some might argue our stock was overpriced for a while due to exuberance of investors looking for anything to invest in. Let's look back on what will hopefully be a steady increase in value over the course of the next 20 years, after smoothing out peaks and valleys like this one. Check out SWA's stock price from 1980 to now....

I personally think JBLU is a great buying opportunity for the long term. That's my gameplan, anyway.

As far as "Insider" trading, most of those "Insiders" are required to exercise and sell their options on a fixed schedule that was set up pre-IPO, specifically to ward off volatility induced by "Insider" trading.

Soros, a different category, actually moved a bunch of shares around to one of his charities, or so I heard. Not sure about that, however.


We're on track, as far as I can tell, though the industry is not without its difficulties...obviously.

The track record has been as we and other LCC add capacity, we actually increase traffic as more folks can now afford to fly. It's the other side of the supply/demand relationship. One can argue whether or not it's good for us aviators paywise (I actually have no complaints), but it's business, and it is great for the paying customer.

Good luck all,

Shaggy

 

[General Lee]

Here's another article:



JetBlue shares dive as margins are cut
By Caroline Daniel in Chicago
Published: December 6 2003 4:00 | Last Updated: December 6 2003 4:00


Shares in JetBlue, the most highly rated stock in the US airline sector, tumbled more than 17 per cent on Friday after it cut its fourth-quarter operating margins, increasing concerns about intense fare competition.


After the market closed on Thursday, JetBlue said it expected its operating margins to be in the range of 13-14 per cent, against previous guidance of 16-17 per cent.

David Neeleman, the chief executive, said: "We're faced with a challenging revenue environment due to capacity additions resulting in lower average fares, particularly in our western markets."

The warning adds to the concerns of a number of analysts about whether the low-cost carriers, which have enjoyed rapid growth during the downturn, can continue their expansion in the face of tougher competition from the legacy carriers.

The comments from JetBlue knocked the shares of other low-cost carriers. America West's shares fell 13.6 per cent to $11.91, AirTran's shares fell nearly 10 per cent to $12.05, and Frontier Air was down more than 8 per cent at $13.81. JetBlue closed down $5.52 at $25.86.

Susan Donofrio, analyst at Deutsche Bank, said JetBlue's announcement "only solidifies our opinion that now that the major carriers are beginning to regain their financial footing, they are becoming more aggressive with JetBlue.

"For example, Delta's Song, which competes directly with JetBlue, is now 10 per cent of the airline's overall capacity and is expected to continue its growth path."

Last month Sam Buttrick, analyst at UBS Warburg, noted that only twice during the past 20 years had small discount carrier margins exceeded those of the major networks. That was in 1991-93 and 2001-03, when the legacy carriers reduced supply.

Now that capacity is starting to come back, Jamie Baker, analyst at JP Morgan, reduced his fourth-quarter earnings forecasts for JetBlue to 17 cents from 22 cents.

He also warned that in spite of the recent steep fall in JetBlue's shares they could come under further pressure if Delta succeeded in getting "a truly meaningful agreement with its pilots sometime in the first half of next year".

The comments add to other negative airline news this week.

Southwest said it expected its December load factors to slip below last year's levels of 66 per cent.

It added that, in line with its previous forecasts, its overall unit costs in the quarter would rise by 4 per cent compared with last year amid higher fuel costs.





These articles are no doubt just flaming "Wall ST. darling" Jetblue. They do bring up interesting points, but I don't think Jetblue will be affected too much. But who knows???

Bye Bye--General Lee

 

[jetblue320]

Although it has a long way to go, it is a good sign nonetheless.

This just in off the wire:


By August Cole, CBS.MarketWatch.com
Last Update: 10:24 AM ET Dec. 8, 2003

SAN FRANCISCO (CBS.MW) -- JetBlue Airways jumped more than 5 percent Monday morning after Merrill Lynch upgraded the shares to "buy" from "neutral" in the wake of the stock's decline during the past two months.

 

[duckman]

BUY, BUY, BUY....
Ya can't loose...!!!!
He, He, He...

 

[duckman]

Are you sure.

Thankfully, though, JetBlue management will never look upon the pilot force as a cost center -- an expenditure that they seek to reduce. They'll never attempt to increase productivity by unilaterally changing work rules, or pay rates, or schedules.

On the contrary, they will always continue to enjoy a harmonious relationship with the pilots, and will schedule future stock splits around new hire class dates as they have in the past.

Tony C....bold statement with no timeframe. Likely very true while current management is place...what about 20 yrs from now when they are all retired? Yep..current JBLU employees don't care about 20+ so if we're only talking in the 'here and now', point taken. But a new CEO could change that all. Look at the Legacy carriers history.. DELTA being the most glaring example.

 

[Falconjet]

Kidding

Duckman: TC was being sarcastic.

 

[TonyC]

Re: Kidding

Duckman: TC was being sarcastic.

WHEW.... I'm glad SOMEbody caught that!

 

[duckman]

Well Shiza TC.
I obviously missed that. You speak from first hand knowledge no doubt!!
Do I feel stupid?? Nah..more like an idiot I'd say..