JetBlue Airways Reports January Traffic

[FDJ2]

JetBlue Airways Reports January Traffic
Thursday February 5, 12:40 pm ET


NEW YORK, Feb. 5, 2004 (PRIMEZONE) -- JetBlue Airways Corporation (NasdaqNM:JBLU - News) reported today that its traffic in January increased 39.7 percent from January 2003, on a capacity increase of 47.0 percent. Load factor for January 2004 was 78.1 percent, a decrease of 4.1 points from January 2003.
JetBlue's operations were impacted by snowstorms in the Northeast, which resulted in a completion factor of 99.6 percent and on-time performance of 78.0 percent.

 

[lowecur]

Looks like the playing field is leveling out. The bloom may have fallen off the rose on B6's invincible aura. The legacy's are definitely having an affect, particularly on the unprofitable coast to coast routes. The problem is there are no winners other than the consumer, which is good. Neeleman was asked if the 190's were available now would he take them. I believe his reply was somewhere along the lines of "in a heartbeat." They will give the airline more pricing power with the addition of smaller cities, where there will be very little competition that can compete with the 190 and B6's IFE.

Kudo's to those legacy's that are climbing back in the game.

 

[N1atEcon]

good lord!!

Man Lowecur You remind me of "chicken little." Yesterday you were in glee that SWA dropped 1.8 LF and today you are jumping all over this Jblu drop. I know you think you are the wiz when it comes to running an airline. Especially by adding RJ's. (lol, couldn't resist that one...) But what you don't understand is that the LCC have some pretty smart finance guys calling the shots. What they are doing is adding a lot of ASM's to get ready for the future. Proactive vs reactive. The whole land grab/market share theory. What they are saying is this. "If we can make money under these horrific economic times lets expand." That way when this cycle turns around we will be better positioned with more ASM's to fill thus more $$$$$$$$$$$$.

P.S. The sky is falling, or is it?

 

[lowecur]

Econo

Man Lowecur You remind me of "chicken little." Yesterday you were in glee that SWA dropped 1.8 LF and today you are jumping all over this Jblu drop. I know you think you are the wiz when it comes to running an airline.

Hey don't take it so seriously, I don't. It's true I embellish to the extreme sometimes, but that's just to get the conversation going. If all the so called professional analysts were so smart, then they would be running airlines instead of Monday morning quarterbacking. I'm an amateur and it shows sometimes, but I do hit the target once in a while.

I think a drop in B6's LF is significant for the legacy's. No one is going to make any serious money in the next few years with this kind of competition, but as I said it's all about attrition. WN isn't headed in the can, but they are living in a world that is much different than it has been for the last 30 years. If the employees can put aside self interest, WN can continue to prosper in the years to come. However, they need to understand that the success of the airline comes first. The real test will come if all the groups can sit down sometime in the next few years and come to an agreement that management has done a great job, and each group will share equitably to do whatever it takes to get the profit margins up to 12-15%. If the agenda is going to be suspicion of managements intentions, then you'll end up just another legacy carrier.

Just my three cents.

 

[dgs]

Let's try to keep this all in perspective. When your numbers are incredibly high (82.2% LF for Jan 03), they can't keep going up. Sometimes there will be fluctuations. 78.1% is a load factor others would kill for in a month like January, which is typically slower and affected by weather. IMHO, this kind of fluctuation is noise level variations around a solid (and profitable) 80% LF.

 

[Flying Freddie]

Flights to cities with three flights a day were sold out. Now adding frequency to those cities makes it 78% loads. Maybe it is time time add other cities starving for lower fares.

 

[V2+10]

Load factors alone can be very deceiving. Airline execs are just as concerned about load factors being too high as they are about them being too low. There is a balance to be achieved. Obviously if load factors are below breakeven, revenue will not be generated. On the other hand, if the load factor is too high, then you are spilling traffic to the competition. Very high load factors mean that many flights are full, especially the most desirable times and destinations. That leaves little or no choice for the many other people also trying to make a reservation due to lack of availability. If seats are not there, then you are going to spill traffic to the competition.

High load factors can also have a detrimental effect on the ability for a person to travel at the last minute. A certain amount of last minute travel availability is desirable, both from the customer convenience standpoint as well as the revenue generating potential for the airline. Last minute fares do, and will continue to command the highest fares (please make them reasonable). It would be hard, if not impossible, for any airline to make money selling all the seats at the lowest fare. The closer you get to the departure date, the higher the price gets. All airlines do this. Some more than others, but that’s another story all together.

The bottom line is that if you sell all your seats ahead of time at rock bottom prices then the airline gets the double whammy of missing out on the potential of last minute revenue as well as spilling traffic to the competition due to lack of availability. If the seats aren’t there, the customer will find them someplace else. In this case, controlled capacity growth is needed to somewhat temper overly high load factors.

Jetblue’s load factors have been extremely high for quite some time. The argument could be made that these load factors have been too high, both from a customer convenience and lost revenue standpoint. Don’t look at JetBlue’s January drop in load factor as a bad thing when in fact it could very well be a good thing.

V2