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Jet Blue Productivity Advantage

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pilotyip

Well-known member
Joined
Nov 26, 2001
Posts
13,629
How does United address crew cost per hour on the A-320 $916/hr? How does USAirways do it at $1,063/hr Jet Blue $409 per hour. How can you make money flying against someone with that cost adavantage? Jet Blue guys take home great money they are not in proverty by any means. But they do fly alot of hard block hours to make their paycheck. The United crew works an average of 427 block hours per year and gets paid an average of over 900. Did management elect to make the airline unproductive?, did the pilot group ask for this in bargining?
 
Seems to me that just comparing costs per hour doesn't tell the whole story.

A Jet Blue Captain who's been with JB for three years makes X.

A UAL Captain who's been with UAL for 20 years makes Y.

Don't expect JB's cost structure to stay low forever. If they succeed their labor and equipment costs will increase over time. I've heard smart investor-types say that JB's costs are "artificially low" at this point in time.

Regardless, don't expect the 12+ year Captain (2012) at JB to pull down the same check he/she makes now...and I'd bet pay in the out years will be more representative of the rest of the market.

JB's costs will probably go up, and if UAL is to make it in this environment, their labor costs will probably decrease.
 
How much longer before "JeffG" chimes in, because someone said something negativ about JB?
I've heard smart investor-types say that JB's costs are "artificially low" at this point in time
 
So are you saying an aspiring airline pilot should avoid JetBlue right now since they are eventually going to have a higher cost structure? What are the alternatives? Sit on the sidelines until an ALPA backed carrier starts hiring again?

Perhaps all those guys I've been helping prep for their JetBlue interviews that are from USAir are idiots and just need to wait around for 10-12 years until JetBlue has problems of its own.

Personally, I don't think labor costs are the big issue at JetBlue, nor do I think they will be in the next 10 years. The company is built from the ground up on the premise that if you take care of your customers, they will return and pay a "fair" fare and keep you profitable. You just need to manage your costs to insure you can make money without having to charge $1000 for walk up business class tickets. AirTran, SWA, and Frontier are also doing the same thing, but JB seems to be both the customer and media darling. SWA has been profitable for years, even as flight crew numbers have increased and average tenure has gone up.

I don't know if JB can make money if/when their crew costs 900 bucks/hour. But I DO know United can't make money when its management bungles millions on dreams of buyout mergers, a fleet of business jets for high end service, and the other various hotel/rent-a-car/computer reservation systems they have bought and sold over the years. Nicer seats or satellite TV to make customers more comfortable?...nah...build a nicer frequent flyer lounge. Now that the business travelers have evaporated, many of the majors have forgetten how to take care of the "backpack" customer they used to simply tolerate as a cost of doing business. I'll know JetBlue is on the way to death only when Neelemen hires Stephen Wolf on his staff.

As an ALPA member, I appreciate the benefits that majors have tradtionally provided...good work rules, A and/or B plans for retirement, and a competitive wage. However, those who sling spears at SWA and JB working for "less" compensation ignore the various profit sharing/stock option plans offered to the employees. Those "underpaid" JB employees are hoping that by building a profitable business model (which DOT said United was not) they eventually will be more than rewarded by their investment in the company. Personally, I'd like to have some FedEx stock as part of my compensation package at my carrier--if only to convince the media we aren't a bunch of "overpaid underworked pilots" who have no stake in the company's profitabilty. If JetBlue employees choke their golden goose for an "industry leading" wage, they know while their paychecks go up, their total net worth goes down. Guys who left other carriers over the last 2 years to start with JB are not different than the rest of us--they want to maximize their earnings. However, when they compare the wealth/security of a 12 year Captain at SWA verses guys (or gals) who had a great contract only to see their career disappear when their carriers were liquidated or merged (lets see...Braniff, Eastern, Continental, Pan Am, Flying Tigers, TWA....) they decided to give the former a try.

As for egging on Jeff G...well...imagine a guy who likes his job and is proud of his company in this industry! What an anomaly! I'll bet he even tries to save JB money here or there with gas saving techniques, and even has the gall to be pleasant to other crew members and passengers. He has got what most would love to have....a job he's proud of, a wage he thinks is fair, and a company that for now, at least, has found a way to be profitable in a tough market.

Std disclaimer....I fly rubber dogsh!t in the middle of the night sitting sideways....and I may very well be wrong.
 
Dieterly said:
How much longer before "JeffG" chimes in, because someone said something negativ about JB?

You misunderstand. I try to speak up about incorrect information, not negative information. Of course, rumors being rumors, most of the incorrect information is also negative.

Naturally wages are "artificially low" at this point. How could they not be? You only have your most senior people at the lowest payscale once. After that, barring something unforeseen, wages rise. Why would I argue with that? I'm actually kind of insulted you think I'm so blindly loyal that I am unable to recognize obvious truths when they're presented, or that I would idiotically defend the indefensible. I love my job, but I'm not stupid.
 
Eagleflip,

Amen!

Albie,

You always do an excellent job of an explanation. For those of us who are proud of JB, thanks for sticking up for the little guys. You're right on the money!

Happy Landings,
 
Atta boy!

Albie -

You rock.

Couldn't be more astounded at the disinformation spread by union and other un-named sources about our company. I am happily employed by a great company that pays a great wage and who's leadership I trust.

Those of us in Blue do not wish any one else at any airline any ill will. We have created a low fare customer base at every destination we serve as opposed to "stealing" customers away from other carriers.

As a result, more folks are flying now on our routes than ever did before we were in business. If customers will pay pilots $250,000 to fly an A-320 around the country, then more power to those pilots.

It has nothing to do with what folks think "industry leading wages" are and everything to do with what the market will bear. I see lots of folks flying with us for <$300. If the price was higher, they wouldn't fly at all.

I sincerely hope the major carriers can get their costs under control. At the same time, they need to focus on their strengths: serving people through their "connection" carriers to global destinations with First Class service (if it is so desired).

If I were them, I wouldn't worry about what impact a fleet of 35 airplanes has vs. a combined fleet of 1500.

Folks that want to choke off an industry in order to raise (or justify) their own wages will ultimately get what they deserve - which is a market-driven wage for a market-demanded service. If you can't stand the heat of that reality, find a job in a non-capitalist economy.

Honestly, best luck to all in this roller-coaster industry.

Shaggy
 
Randy - great subject you started here. BTW, just got back from two days of testing at Talladega and things are looking up for the boys from down the street in Michigan!

Albie - marvelous response as always. I must make one minor correction however.
"Sit on the sidelines until an ALPA backed carrier starts hiring again?"
ATA is now respresented by ALPA and is hiring. I know most folks don't count them as a major (which technically they are) or a factor in today's market but they are trying hard to do good things.

jointops, Jeff G, Eagleflip - I know you guys are proud to be with JB and well should be. They are a great airline with great people and are doing great things. I am currently with ATA having started class there five days after my JB interview. I have now been called for a class with JB starting Jan 6th and am agonizing over what to do. I have had PMs from several people offering great advice and I have worked hard to make as close to an "apples to apples" comparison as I possibly can. At this point it's still a toss up in my mind. I would welcome more input from anyone either by PM or here in public about which route to take. It's killing me trying to figure this out but believe me I am very thankful to even be in this position.
 
JB

To all of you fortunate enough to have a job at JetBlue congratulations. It seems like a great company to work for. Many of us are envious and would love to be in your shoes. It's a great service you provide too and the customers are happy. Customer service attitude can't be underestimated and it'll continue to help you build market share and strength.

The market cap of Jet Blue is roughly equivalent to Delta. That is just what it is. Doesn't mean the market knows anything about either company because...well look at the last three years of stock market performance and you'll see the market doesn't really know.

As JB matures, costs will go up. Maintenance costs will increase. Labor will have a big spike because employees will have been around a while. The sweet deal lease David worked is keeping costs down now...what will the 320s cost in 3-5 years?

I hope this goes great for all of you...just don't know if Mr. Market knows the negatives (probably does as the chart is not pretty). It's nice to have an airiline out there that believes treating customers with respect and being passionate about loving your job is part of the company culture and not just lip service.

More than "cost advantages" I think that is why JBLU will flourish in these times. You need to be efficient and contain costs, but company culture is what will keep loyalty where it needs to be and this is an intangible that JBLU will take to the bank.
 
More productivty stuff

United flies there A-320's about 10 hrs a day, USAirways about 9 hrs a day, and JB about over 13 hours per day. United and JB have almost the same average stage length. JB get a free stage ever day over United and does it with half of the crew ratio per airplane. United has to fly their airplanes more hours, with about 25%-30% fewer crews to match the productivty of the LLC's Major changes in work rules, will it happen?
 
JB guys, please help me out. I can see what a first year F/O makes on their web page. But what can one expect as a captain.

thanks
 
pilotyip said:
How does United address crew cost per hour on the A-320 $916/hr? How does USAirways do it at $1,063/hr Jet Blue $409 per hour. How can you make money flying against someone with that cost adavantage? Jet Blue guys take home great money they are not in proverty by any means. But they do fly alot of hard block hours to make their paycheck. The United crew works an average of 427 block hours per year and gets paid an average of over 900. Did management elect to make the airline unproductive?, did the pilot group ask for this in bargining?

wait till JB has to start maintaining those busses, right now they just do light maintenance.... soon they'll have to ramp up a maintenance hub to support that fleet..... JB will just be a smaller SWA and nothing more.

When this economy returns, so will AMR, DAL, UAL...et al.
 
Lets see...

SWA....$15.50 Mk cap 11.8 billion

DAL.....$12.25 1.5 billion

AMR......$7.57 1.18 billion

UAL.......$1.97 129 MILLION

JetBlue$ 26.32 1.16 billion

VT....by my math, being "just another SWA" is exactly what I would be wanting. Even at only 30% of the size of SWA, the market cap (even assuming the multiple deflates somewhat) would be much higher than the majors.

I was concerned if I joined JB I might get bought out and "stapled" to the bottom of someone elses seniority. Looks like I may have had the equation backwards.

Also....it might be cheaper in the long term to sell off old airbuses and get new ones to minimize mx costs. Accepting higher initial costs to control unsheduled mx expenses is exactly what lot of American consumers do when they trade in 5-6 year old cars on newer models. I'm not sure that would work here, but again...I doubt the airbus will be eating anyones cost in mx down the road. If its too high....write it off and get new ones.

Must....get...off...computer....and....go...to...real...work......(I can quit whenever I want...really!)
 
Jetblue is competive not because of the salaries, but because of the work rules, the same is true for Southwest.

At Southwest the pilots fly 80 hours & are paid for 80 hours.
At United the pilot fly 80 hours & are paid for 50 hours.

Southwest has been turning a profit for the past 25 years, I would think after 25 years, they should have senior pilots flying by now???

If Jetblue keeps paying an honest wage for a honest days work, keeps the union out, they should be able to maintain the cost advantage for years to come.

MIKE
 
G100,

I think a search on this site will give you additional pay info on the going salaries.

1st year Captain is $110 an hour for the first 70 hours. Anything over 70 hours is at time and a half (same policy for F/Os, F/As).

Our upgrades are running anywhere from 10 months to a year. I started in March and 4 guys from my class made it to the Dec upgrade. I missed Dec upgrade by 6 people. I missed Jan upgrade by 35. So you can see it's all timing.

Happy landings,
 
United has to fly their airplanes more hours, with about 25%-30% fewer crews to match the productivty of the LLC's

The last I knew JB's target was 14 crew members per airplane. American Airlines has 11 per Super 80 in JFK (and would assume every where else). The red eyes really eat up crews.\

United flies there A-320's about 10 hrs a day, USAirways about 9 hrs a day, and JB about over 13 hours per day.
wait till JB has to start maintaining those busses, right now they just do light maintenance.... soon they'll have to ramp up a maintenance hub to support that fleet

So with this amount of utilization, you don't think we've needed a single C-check? Never had an engine change? We have three maintence hubs, and are working on building a hanger for heavy MX at JFK.

Only time will tell. However, from my perspective, I get treated better, with more respect, and more like a real person in a flight department with 511 pilots, than I ever did in a flight department with six pilots. That's what will keep this company strong and profitable for years to come.

Respectfully,

JayDub
 
Curious:
How much would a year one or two UAL A-320 capt make, if that were ever possible?

How much of a raise does a JetBlue pilot get each year? What will a 12 year JB capt make?

How often do 2 captains fly together on JB? It sounds like there are a lot of captains there.


Does anyone really thing JB "created a low fare customer base"? Of course these customer were "stolen", whether from other airlines, buses, or personal vehicle. It sounds like there are many business travelers on JB, they didn't just magically appear, they don't fly on another airline anymore. Any data on how far the average JB customer drives to the airport?

Don't get me wrong, I'd love to have a flying job right now.

See
 
On date of signing for their current contract, I'm showing $193.73 and $195.34 for a 1st and 2nd yr captain on the A319/320 at United. After all the concessions that may or may not have taken place since then, who knows?
 

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