JBLU's take on Ted

[T-Bags]

"I don't know where you come up with "Positive cash flow during the month was $7 million per day.” Please give us your source because it seems to be backwards from what the Denver Business Journal is reporting."

UNITED.COM Straight from investor relations, financial releases, october results.

"How did they increase their cash on hand to $2.6B while losing $2.8B for the year? I'd like to understand and resolve the discrepancy."

Smoke and mirrors. Lets say you own a 747-400. you bought it new for 200 million and planned on depreciating it away over the course of 25 years. Lets say it has a book value after 10 years of 130 million. In BK, to improve the "post BK" numbers, you decide that jet is now worth 30 million. Guess what, you just "lost" $100 million!!!!! No cash changed hands, nobody's trailer was repo'd, but you LOST $100 MILLION ON ONE JET!!! That's the "game" of BK. You revalue as much as you can AS LOW as you can, and go from there. That's why a thourough understanding of the COMPLETE financial picture is VITAL!! How much per year in cash flow? Lease rates? defered expenses? depreciation schedules? All of it matters.

For example
Company A buys A320's and depreciates them over 25 years with a 20% residual value.
Company B buys A320's and depreciates them over 20 years with a 10% residual value.
Same jets, same price. Lets assume identical revenue and identical cash flow, it's entirely plausible for Company A to report a "profit" and company B to report a lose. In all cases A will have higher "earnings". Which company is the better long term bet?


In other words, most of that loss you cite isn't "real", and Denver biz was WAY off on even it's "operating loss" prediction (by something like 300 MILLION). Not a credible publication....

 

[Mugs]

As I understand the "turnaround," it means they are only losing $5.3M per day in the fourth quarter, vs. losing $7.7M per day average for the year. An improvement? Sure. But I still stand by my statement that "United is hemmoraging money daily."

So you took the $476 million loss figure and divided by 90 days to come up with a loss figure ---cash out the door--- of $5.3 million per day for the 4th quarter? You divide two numbers and come up with a conclusion that you stand by? That is why some of the speculation on this board about airline finances can be truly amusing. If I were to use similar logic, I would conclude that JBLU only makes money because they are not making any aircraft payments. T-Bags does his homework before drawing conclusions, which is rare on this forum.

 

[merikeyegro]

cash flow

You can be cash positive without actually making money. It's really quite easy.

Positive cash flow is simply determined by having more cash on hand, from whatever source, at the end of the month than you did at the beginning. Cash can be obtained by sales, by investment from owners, by loan from a bank, or by selling off investments in other businesses/stocks. You can also be cash positive by selling off inventory parts or long-term assets such as aircraft, computers, buildings, etc. The company can also choose to "spread out" the cash by realizing it in successive months versus realizing it all in one month.

Cash at beginning of month ($600M) + Loan ($300M) + Sale of aircraft ($100M) - Parts purchases ($150M) = $850M, or a net positive cash flow of $250M for the month. Notice I didn't even add in revenue realized from sales. It's that simple...

Positive net income is determined by taking in more revenue than you dole out in expenses. If you are paying back or receiving loans, buying supplies on credit, refinancing debt, delaying payment for supplies, etc., none of these activities will show up on your income statement as expenses. Of course, all sales will show up as revenue. It's very easy to skew the statement to make it look as if you're making money.

In the end, it's VERY EASY to cook books to make it look good. Positive operating cash flow means very little unless your net income is positive. Check that statement. In the airlines, just as in your home finances, you have to make lots of money, pay out less, owe very little, and have enough greenbacks on hand to get you through next week. All the pretty statements in the world won't matter (ref: Enron). Be careful of what you read. Accounting is a very easy subject to perform, once understood. If you don't understand it, it can bite you in the butt...

 

[P3-Adub]

BK = Chef !

Suppose TED and UAL mainline will be in pretty good shape on emergence from BK ???? Think so.

 

[General Lee]

Here are the latest TED slogans:

"TED, the end of United" and "TED, doesn't include U N I" (You and I)

I do hope they compete well against Frontier. It will be a good battle in the West.

Bye Bye--General Lee

 

[NoName]

i hope between ted, Delta and Song, and American that they can supdue some of the arrogance at Jetblue. im glad to see Delta and American really going on the offensive in the Northeast.

 

[V2+10]

i hope between ted, Delta and Song, and American that they can supdue some of the arrogance at Jetblue.

I think you are making a false assumption about what you call "arrogance" at JetBlue. Please remember that many, if not most, employees at JetBlue come from other airlines...majors...regionals...corporate...and military etc. and pinch themselves everyday for the opportunity to work for such a forward thinking company that actually values it's employees with a whole lot more than just lip service. It's truly rare in these days. Just look at most (not all) employees at other airlines and see what they have to say about their lot in life. You have to admit, most of it ain't so good.

JetBlue corporate should be applauded for being forward thinking and knowing how to respond to opportunities as they arise. This is not arrogance...it's just plain smart business.

Do JetBlue employees sometimes lay on the blue frosting a little thick? Yep...no question. But tell me, if you worked for a dynamic company with a management team that you truly believed in, would you not be proud of what you are building? Again this is not arrogance...this time it's pride.

Don't be upset about it...learn from it.

V2

 

[dgs]

Pride, not arrogance

V2+10 -- I was thinking exactly the same thing--that pride in our company has been mistaken for arrogance.

This thread has also gotten very twisted from my first post, where I make the point that I don't wish anybody at United ill will, but that they could do some things to improve their product quality by improving how they treat their customers--particularly in Denver. Unlike others who hope jetBlue will suffer an untimely death, I do not wish the same for any other airline. I think the flying public will be better served by a better product quality for reasonable prices.

As for Ted, my impression is that it doesn't have much support from the rank and file United employee. If you can't change the culture, how will you improve the product?

Now for the numbers game. It appears you can make the numbers prove any point you want. (Taking out a $300M loan or selling aircraft may put cash in the bank, but they do not add to the bottom line or affect the profitability equation.) If you read my earlier posts, I was attempting to focus on the service issue, not finances. I'm sorry if I was pulled off topic.

Now before you flame me, ask yourself--How do you feel about customer service and do you think Ted will make a difference?

 

[Palerider957]

My parents each have a pass card that gives them access to the whole DAL system for FREE. They live very close to a DAL served airport--BUT, they have been so poorly treated, and the customer service is SOOOOOOO bad at DAL(right down to the angry, nasty gate agents and FA's), that they choose to drive more than an hour and PAY full fare to travel on Jet Blue.

For those who argue the "smoke and mirrors" of BK, and that the other legacy and pretend LCC's aren't doing so poorly--you cannot argue that JBLU makes money, every day, without all of this crap.

They treat their passengers and employees like they are something more than a cash machine....this is a concept that my airline will NEVER understand.

You at JBLU are doing something right

 

[Extra300S]

Palerider who do you work for?

I really doubt you are a Delta Pilot, probably another sore ASA driver, why not direct you anger to getting your resume to jetblue?


P.S. I aint a DAL guy either!

Just chill dude.....

 

[General Lee]

Palerider,

Yes, you are an ASA driver, and I have recently non-revved on Delta on both the Domestic and INTL side, and even though the flt attendants were a little on the "senior" side, they provided very good service and did not have an "attitude." When I see someone doing a good job I often tell them I am a Delta employee and that I think they are doing a great job. They appreciate it. I think your parents might have hit a bad streak, and that is unfortunate, but a lot of our employees are actually trying to provide a good service, and there are always a couple bad eggs at every airline--probably Jetblue too.


As far as the Jetblue guys' "arrogance"---I don't see it that way in full, I see it as extreme happiness due to expansion. Their airline is expanding, and they are willing to put up with lower wages now, due to the fact that they are growing and will have "better days ahead" in their minds. That is understandable. Good for them. When you hear some good news, like our announcement yesterday to fight at JFK and expand a little, even I felt good for a couple minutes. They have that all of the time. If things were to turn on them and their stock would sink, they had to stop expanding for some reason, etc....we would not hear too much from them.

Bye Bye--General Lee

 

[Palerider957]

Extra300 General Lee

Don't get me wrong, it burns my as.s to see my own family giving revenue to such a strong competitor. I simply concur with the above posts that state a new paint job and "zaniness" won't pay the bills.

I spoke with a DAL FA while deadheading to DFW a few weeks ago, she said they had reduced the number of FA's on that plane (757) by three. This poor FA busted her as.s getting cabin service done, but she didn't have any extra time to give to passengers. She was very pleasant, but I have met many more who are especially bitter--pax can't help but see this.

As my Dad said, the Jet Blue people seem to WANT to work, they enjoy the passengers, and are fundamentally optimistic. This is a much more relaxing environment, in an otherwise stressfull event (for non-frequent flyers). This friendly feeling will certainly bring about repeat business (it has already from my family).

At DAL/ASA (especially ASA) things are stacked against customer oriented employees (such as myself). So many others have abused the passenger before you come into contact with them, they are confused, tired and pis.sed off--there's no going back from that.

General, I strongly agree that telling people they are doing a good job is important, but it has to be sincere. The posters put up and "holiday cookies" handed out really seem more to entrench bitterness then foster good will.

Having rambled on, I'll say things have improved a bit, but we (DAL/ASA/CMR) have a long way to go before there is a real sense of team work and commitment to customer service system wide.

 

[SDF2BUF2MCO]

Extra300 General Lee

As my Dad said, the Jet Blue people seem to WANT to work, they enjoy the passengers, and are fundamentally optimistic. This is a much more relaxing environment, in an otherwise stressfull event (for non-frequent flyers). This friendly feeling will certainly bring about repeat business (it has already from my family).

At DAL/ASA (especially ASA) things are stacked against customer oriented employees (such as myself). So many others have abused the passenger before you come into contact with them, they are confused, tired and pis.sed off--there's no going back from that.

Having rambled on, I'll say things have improved a bit, but we (DAL/ASA/CMR) have a long way to go before there is a real sense of team work and commitment to customer service system wide.

Stating the obvious, the folks at JB are more upbeat because they see (real or imagined ) a "bright" future which has a positive effect on their effort. On the other hand, the future is a little uncertain and perhaps not as bright right now at DAL which effects confidence and morale. The customer could care less. They just want a cheap ticket and great service. That's people being people.
Would like the think it's a big enough place for everyone to prosper but I'm skeptical of the media and guberment reports that say the US economy is improving especially since the mad rush continues to produce products outside the US. Good luck to all and buy USA made products whenever possible.

 

[General Lee]

Palerider,

You are correct about the reduced staff on the planes, but the number was incorrect. On the 757 they went from 5 to 4, and on Song they actually increased the number of seats up to 199--so they are really busy. But, on the Song flights the people are distracted more because of the IFE. But, you are right---they are working harder. And, that can lead to unhappiness. Some of that productivity gains DL got when dealing with the stews just bit them in the a$$, since they announced that they are recalling 200 flight attendants for the JFK expansion.

And, as far as DL/DCI starting to work together for a common goal, that will start with good leadership and not whipsawing us against the other groups. I hope that happens eventually.

Bye Bye--General Lee

 

[Palerider957]

And, as far as DL/DCI starting to work together for a common goal, that will start with good leadership and not whipsawing us against the other groups. I hope that happens eventually.

Bye Bye--General Lee [/B][/QUOTE]

I couldn't agree more, General.

 

[sfomarc]

Does anyone have the name and address of the CEO for United? I just took an international flight from BWI to SIN and wanted to write a constructive letter to the CEO rather than to some customer service rep whom will reply with some pre-printed form letter.

Thanks

 

[Extra300S]

Thanks for Flying United!

What was wrong with your flight? Why didn't you just fly on Southwest? Oh- I know why........never mind.

 

[sfomarc]

Extra 300S

What was wrong with your flight? Why didn't you just fly on Southwest? Oh- I know why........never mind.

This was an international flight which I paid $2700.00 for, hope this answers your question.

 

[zonker]

Extra 300S



This was an international flight which I paid $2700.00 for, hope this answers your question.

Hopefully someone will thank you for your business and take an interest in making sure you're a repeat customer.