Chase is the king of the SWA conference calls. I always enjoy reading his summary of the calls, even though I don't work for SWA. I'm not quite as well versed as he is, but I'll give a stab at the JetBlue conference call that took place today (Oct. 23), since I have a transcript. Here goes:
Operating revenues $256 million (growth of 65% over 3Q 2002), operating income $53.8 million and operating margin of 19.7% (luv that profit sharing) compared to 13% in 3Q 2002. July and August actually had an operating margin of over 25%, while September was a small loss (as always expected). The end of year average margin is expected to be 17-18%, which could be the crewmember "profit sharing" number, if we stay on target!
Net income was $29 million, compared to $12 million in 3Q 2002. Earnings per dilluted share was .39 cents compared to .18 cents (which is why growth is such a good thing for stock price). CASM dropped 7% to 5.92 cents despite a 6% increase in fuel costs, increased scheduled maintenance, costs for removal of one row of seats on all planes, and an unexpected $400,000 repair for an engine with a bird strike. RASM dropped a bit (half a percent) due to a 3% increase in stage length. (The key is always the spread between CASM and RASM, which is increasing...means more profits).
Completion factor for 3Q was 99.8% even including the blackout and Isabel. There were only 22 cancellations during the blackout and 6 for Isabel. During the Northeast blackout JetBlue operated 246 flights during 27 hours of "manual operation" (no electricity), at JFK. Even CEO David Neeleman worked on the ramp through the first night. Most airlines shut down completely. On time numbers were a remarkable 86.2%, given that all the flights during the blackout were obviously delayed. Load factor for the quarter was a record 87.7%.
Growth plans are huge (and this drives lots of new pilot jobs). Right now there are 80 departures per day out of JFK, and expected to rise to 250-260 with the new terminal. However, Neeleman says expansion will be huge in BOS and IAD too, so that JetBlue won't be a "one trick pony" with JFK. Plan on two new cities in 2004, could be more but not likely.
There is an average of a 24% growth rate planned for the next 8 years. The following is the current airplane delivery rate through 2004 (which is accelerated from the last conference call): 3 Nov 2003, 2 Dec 2003 , 2 Jan 2004, 2 Feb, 1 each April to Sept, 3 Oct, 2 Nov, 1 Dec, for a total of 53 by 12/31/03 and 69 by 12/31/04. Figure on 13-14 pilots per plane, (thanks for those numbers BlueDude), and you can peg the hiring trends. Delivery rates (and hiring) will increase dramatically in 2005 when the Embraer comes on board.
JetBlue will pull out of Atlanta because the profits aren't there now that Airtran expanded so quick. Neeleman said "then it became kind of a war between Air Tran and Delta. We certainly with our cost structure could have stayed in there for a long time just to kind of prove a point, but we're not into proving points. We're just into making money. So we thought it was it was a lot better allocation of assets (to build BOS)" Expect a return to ATL when the 190 comes on board. Song competition hasn't been much of an issue, since NY-FL load factors are still around 87% for JetBlue, even with a significant premimum of price over Song.
Neeleman quote "I think there’s this kind of this old notion that low fare carriers maybe do well when the competitors don't react, and as soon as they start reacting they lose that advantage. I remember talking to Don Burr, CEO of People Express, that they were flying 80% load factors and when everyone matched their prices, they went to 30% load factors. And obviously we're not in that position at all at JetBlue (with load factors at record levels). We get rigorous matching from every airline and we're able to grow and gain market share and continue our profitability. And that's got to be a pretty good sign for us going forward." (Yep, JetBlue is no People Express, that's for sure).
I'll end my summary of the conference call with another quote from Neeleman. I chose this quote, because it summarizes why I am so happy to work for JetBlue. The senior leadership is so smart, but they also really care:
Neeleman "But really the most important thing is our culture, and we're working really hard. And we have a lot of programs in place and a lot of focus on our crew members. It starts with obviously making sure we hire the right people, making sure that they have the best equipment and tools to do the job. And then we're really focusing on our leadership We have a program called principles of leadership, for every single person in this company who is a supervisor level and above. (To keep everyone focused on doing "the right thing").
And so we really want to make this a great place to work. We want people -- our crew members to get up every morning and feel like that they want to go to work. And because we know that if that's the case, then the customers will know that and they'll want to come back and fly us again."
Skirt
proud to be "blue"
Operating revenues $256 million (growth of 65% over 3Q 2002), operating income $53.8 million and operating margin of 19.7% (luv that profit sharing) compared to 13% in 3Q 2002. July and August actually had an operating margin of over 25%, while September was a small loss (as always expected). The end of year average margin is expected to be 17-18%, which could be the crewmember "profit sharing" number, if we stay on target!
Net income was $29 million, compared to $12 million in 3Q 2002. Earnings per dilluted share was .39 cents compared to .18 cents (which is why growth is such a good thing for stock price). CASM dropped 7% to 5.92 cents despite a 6% increase in fuel costs, increased scheduled maintenance, costs for removal of one row of seats on all planes, and an unexpected $400,000 repair for an engine with a bird strike. RASM dropped a bit (half a percent) due to a 3% increase in stage length. (The key is always the spread between CASM and RASM, which is increasing...means more profits).
Completion factor for 3Q was 99.8% even including the blackout and Isabel. There were only 22 cancellations during the blackout and 6 for Isabel. During the Northeast blackout JetBlue operated 246 flights during 27 hours of "manual operation" (no electricity), at JFK. Even CEO David Neeleman worked on the ramp through the first night. Most airlines shut down completely. On time numbers were a remarkable 86.2%, given that all the flights during the blackout were obviously delayed. Load factor for the quarter was a record 87.7%.
Growth plans are huge (and this drives lots of new pilot jobs). Right now there are 80 departures per day out of JFK, and expected to rise to 250-260 with the new terminal. However, Neeleman says expansion will be huge in BOS and IAD too, so that JetBlue won't be a "one trick pony" with JFK. Plan on two new cities in 2004, could be more but not likely.
There is an average of a 24% growth rate planned for the next 8 years. The following is the current airplane delivery rate through 2004 (which is accelerated from the last conference call): 3 Nov 2003, 2 Dec 2003 , 2 Jan 2004, 2 Feb, 1 each April to Sept, 3 Oct, 2 Nov, 1 Dec, for a total of 53 by 12/31/03 and 69 by 12/31/04. Figure on 13-14 pilots per plane, (thanks for those numbers BlueDude), and you can peg the hiring trends. Delivery rates (and hiring) will increase dramatically in 2005 when the Embraer comes on board.
JetBlue will pull out of Atlanta because the profits aren't there now that Airtran expanded so quick. Neeleman said "then it became kind of a war between Air Tran and Delta. We certainly with our cost structure could have stayed in there for a long time just to kind of prove a point, but we're not into proving points. We're just into making money. So we thought it was it was a lot better allocation of assets (to build BOS)" Expect a return to ATL when the 190 comes on board. Song competition hasn't been much of an issue, since NY-FL load factors are still around 87% for JetBlue, even with a significant premimum of price over Song.
Neeleman quote "I think there’s this kind of this old notion that low fare carriers maybe do well when the competitors don't react, and as soon as they start reacting they lose that advantage. I remember talking to Don Burr, CEO of People Express, that they were flying 80% load factors and when everyone matched their prices, they went to 30% load factors. And obviously we're not in that position at all at JetBlue (with load factors at record levels). We get rigorous matching from every airline and we're able to grow and gain market share and continue our profitability. And that's got to be a pretty good sign for us going forward." (Yep, JetBlue is no People Express, that's for sure).
I'll end my summary of the conference call with another quote from Neeleman. I chose this quote, because it summarizes why I am so happy to work for JetBlue. The senior leadership is so smart, but they also really care:
Neeleman "But really the most important thing is our culture, and we're working really hard. And we have a lot of programs in place and a lot of focus on our crew members. It starts with obviously making sure we hire the right people, making sure that they have the best equipment and tools to do the job. And then we're really focusing on our leadership We have a program called principles of leadership, for every single person in this company who is a supervisor level and above. (To keep everyone focused on doing "the right thing").
And so we really want to make this a great place to work. We want people -- our crew members to get up every morning and feel like that they want to go to work. And because we know that if that's the case, then the customers will know that and they'll want to come back and fly us again."
Skirt
proud to be "blue"
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