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jetBlue - Is the Honeymoon Over?

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I think the honeymoon is over and Needleman is going to have to actually start paying some normal airline bills, like heavy checks, maturing workforce, dealing with the E190 debacle, etc.
 
Snecma said:
I don't get it. If they're problem is too much growth, how will more growth solve their problems?
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The growth is coming in the form of "Cowbell". Probably won't help, though. Because if history has told us anything, it is that once an airline starts losing money, liquidation is just right around the corner.
 
DIAMONDDD said:
The growth is coming in the form of "Cowbell". Probably won't help, though. Because if history has told us anything, it is that once an airline starts losing money, liquidation is just right around the corner.
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Now thats funny.

Neeleman (in his best Christopher Walken accent) - "I just gotta...have...more...airplanes."
 
Well, we all know you sure as He!! can't shrink to profitibility.TC
 
NEW YORK -- JetBlue Airways (JBLU) was downgraded to underweight from equal-weight at Morgan Stanley, citing concerns over competition and rising expenses.
The discount air carrier's stock was last down 38 cents, or 3.4%, at $10.69, and hit a low of $10.27 in intraday trading, the lowest price seen since November 2002.
"JetBlue is currently facing increasing unit costs while flying aircraft into markets where capacity additions are quite large relative to the capacity decreases being seen in many other domestic markets," analyst Douglas Runte said in a note to clients.
"As a result, we expect that JetBlue's domestic unit revenue will underperform the unit revenue performance we expect from most other airlines."
 
As sure as the sun sets...THE HONEYMOON IS OVER not only for JBLEW but Airtran and Southwest.
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Your HOMO honeymoon might be over boeing747-800, but the party has just started at Southwest. Now step away from the computer and go see brokeback mountain, again. :eek:
 
"JetBlue faces more challenging market conditions than many of its competitors, we believe, with revenue challenges in its Florida markets (equal to 35-40% of capacity), as well as expense pressures from the introduction of a new aircraft type, rising airport costs and increasing maintenance expenses," wrote Morgan Stanley analysts.

Rivals like Continental Airlines are moving in on the Florida market, Morgan Stanley pointed out.
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Nice try. Thanks for playing. Have a nice day.
 
HighSpeedClimb said:
I just fly JB from JFK to OAK for $99....Nice product guys, but $99 OW...Nobody can keep these fares that long and make profits...
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What's worse, that seat only made $200 all day. Those stage lengths are way too long for those fares. They say no airplane makes money on the ground, but its not entirely true. If the thing stays in the air for six hours a leg, it makes much less than the airplane who's sitting at the gate eight times a day. Maybe thats one reason Neeleman didn't make it at Southwest.
 
SWA/FO said:
Your HOMO honeymoon might be over boeing747-800, but the party has just started at Southwest. Now step away from the computer and go see brokeback mountain, again. :eek:
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You have used this in more than one post. Are you trying to tell us something about yourself? "Not that there is anything wrong with that...." (Seinfeld)
 
JetBlue will likely face more "strenuous" times going forward. A few factors that JetBlue and others will face:

1. Virgin America might enter the transcon market initially with cheap capacity and better/sexier service (I read 19 A320s "planned" in year one)

2. SWA is ramping up its fleet with many 737-700s due this year (many of which will compete for transcon dollars which will keep those fares low)

3. AirTran is adding 737-700 capacity and expanding the use of those aircraft westward

4. Northeast-Florida market is getting saturated with all airlines adding capacity to those markets (DAL and CAL are playing tough and matching fares to defend their market shares). Squeezing profits out of these routes will become more and more difficult given the competitive fares.

5. Legacy carriers are reducing their unit costs to compete more effectively with the LCCs. Adding high-yield international routes will help to subsidize low-margin (and loss-leading) routes that compete with JetBlue, SWA and AirTran (these low-margin routes will still provide important feed for the international routes).

6. Add to that potentially increasing fuel costs with the Iran situation - I've heard worst-case scenarios of $130 per barrel (no airline will survive at that level including SWA).

I think the entire industry should prepare for a very bumpy ride going forward - it should be interesting...
 
On Your Six said:
6. Add to that potentially increasing fuel costs with the Iran situation - I've heard worst-case scenarios of $130 per barrel (no airline will survive at that level including SWA).

I think the entire industry should prepare for a very bumpy ride going forward - it should be interesting...
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I have to disagree with you on the "no airline will survive" quote. Airlines will survive. People will fly. Maybe not in the numbers we see today, but they will fly, and someone will provide that service. Only if we enter an economic era worse than the great depression will all airlines fail. Remember, if oil prices rise because of Iran, they will rise for ALL nations. The US, with one of the stronger economies in the world, will have a better chance of surviving $130 a barrel oil than weak economies. Like my signature says, Mon, don't worry, be happy.

Have a little faith man
:-)
 
On Your Six said:
JetBlue will likely face more "strenuous" times going forward.
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This is what happens when they deal in the skin trade.:pimp:
 
HighSpeedClimb said:
I just fly JB from JFK to OAK for $99....Nice product guys, but $99 OW...Nobody can keep these fares that long and make profits...
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It's possible...........just go into bankruptcy!!
 
I don't hear the fat lady singin'...

First of all, the author (Courtney Miller) has made a fundamentally flawed assmption. JetBlue does not get its customer base solely by taking travelers from other airlines. JetBlue stimulates new traffic. People that otherwise wouldn't fly, are buying tickets. On routes where DAL and JetBlue compete, JetBlue has only affected DAL's traffic by a few percentage points.

In Q4 '05, JetBlue had a loss. The gas prices were high, hurricanes shut down a large percentage of major revenue markets for some time, the accounting laws for stock options were re-written, and JetBlue took the one time charge in Q4 '05 (SWA has not accounted for theirs yet).

I think you have to look at the Revenue vs. Cost. Fourth quarter 2005 CASM was just under .07 cents. RASM was nearly .072 cents. Not exactly stellar, but I doubt they're looking for anyone to stick around and turn out the lights.

The last quarter was one of the toughest I can remember for the airlines, but JetBlue still covered their costs. The days of wine and roses may seem gone for good, but I think the cork is still in the bottle at JetBlue.
 
3BCat said:
First of all, the author (Courtney Miller) has made a fundamentally flawed assmption. JetBlue does not get its customer base solely by taking travelers from other airlines. JetBlue stimulates new traffic. People that otherwise wouldn't fly, are buying tickets.
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Citation, please.

I'm interested in seeing the numbers.

3BCat said:
I think you have to look at the Revenue vs. Cost. Fourth quarter 2005 CASM was just under .07 cents. RASM was nearly .072 cents. Not exactly stellar, but I doubt they're looking for anyone to stick around and turn out the lights.

The last quarter was one of the toughest I can remember for the airlines, but JetBlue still covered their costs. The days of wine and roses may seem gone for good, but I think the cork is still in the bottle at JetBlue.
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Let's hope so.

The quarter was tough for all the airlines. I don't beleive JetBlue is immune to normal market forces. Do you?
 
Occam's Razor said:
Citation, please.

I'm interested in seeing the numbers.



Let's hope so.

The quarter was tough for all the airlines. I don't beleive JetBlue is immune to normal market forces. Do you?
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I don't think they are immune. I think they are better prepared to survive in a tough, make that very tough, marketplace.

http://www.usatoday.com/money/biztravel/2003-08-12-jetblue_x.htm
 
I know guys at my airline who were hot and heavy about going to work at JetBlue a year ago, but now they're having second thoughts.
I feel one of the main contributing factors to JetBlue's losses is that they're now having to pay for their aircraft like all the other airlines, and they're finially realizing that you cannot make money while charging only $100 to go from east coast to west cost.
It's funny how with inflation, everything else in the world goes up over time except airline tickets. In some cases, airline tickets were even higher in the 70's than they are now.
 

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