Jetblue Loses $32m

[zkmayo]

I dont get some of the posters on here--

You say jB is growing too fast, but deferring some deliveries and selling some older airframes (2-5) while still netting 12 A320s per year and 20% growth after all that is bad decision making?

Their must be some "sweet spot" in there that only geniuses on here know about.

 

[zkmayo]

Not every airline is curbing growth. CAL is growing by 8% this year I believe, and of course SW is growing and expanding. We have cut plenty of planes this year, including slowly getting rid of 737-200s (27 left), 733s (6 left) and 767-200s. (5 left?) It suks.


Bye Bye--General Lee

Jb is still going to grow 20-25%/yr even after these announcements.

 

[32LT10]

If its true that our little house of cards is tumbling down (as some wish it were) and we eventually go away like other failed LCC's of the past, I think those person's joy at the thought of that should be tempered with the thought of what effect it would have on their little corner of the world having a 200 or 300 plane airline with nothing to lose on their hands. Maybe they could afford to continue to loose billions making sure we loose millions until we eventually go away, but what will their balance sheet (and iron clad ALPA contracts) look like then?

Just like the gap in the industry that resulted from the collapse of flyi? The industry did not miss a beat when they shutdown and would not miss a beat if JBLU disappeared. You seem to think that a fire sale on your end would affect the majors. Capacity is capacity. Look at the LF's for the carriers you are competing with. There is not a tremendous amount of slop for the airlines to sell more tickets. You guys are adding capacity faster than you are filling seats (ref, your ASM and RSM numbers from today's report) That decline in LF may be indicitave of the future. Most carriers have pared capacity to match the ASM with RASM and to hopefully allow for measured increases. The JBLU method of throwing seats at the market that people are not sitting in will result in continued losses.

The JBLU business model is looking more and more like flyi everyday. Didn't flyi attempt to do transcons to get the cost down then changed their mind quickly and decided short haul is where the money was? Sure you get better RASM from the short haul but it cost you more to fly them. So while the revenue picture looks better the cost picture looks worse.

 

[7S3W7A]

If the b6 pilots have a 5 year contract then do they re-sign a new contract upon the 5 year point. I imagine there are a bunch of pilots at the 5 year point. If you don't re-sign a new contract then why wouldn't they just boot you to keep costs down. Sounds like that is what it's designed for.

If I was management I would start looking at cutting high employee salary in a hurry.

 

[Tejas-Jet]

We have less employee per airplane then that,

Yeah...it's in the low 70's. Although it was higher before Gary became the CEO.

Tejas

 

[IronCityBlue]

that's not what I was saying

Just like the gap in the industry that resulted from the collapse of flyi? The industry did not miss a beat when they shutdown and would not miss a beat if JBLU disappeared. You seem to think that a fire sale on your end would affect the majors. Capacity is capacity. Look at the LF's for the carriers you are competing with. There is not a tremendous amount of slop for the airlines to sell more tickets. You guys are adding capacity faster than you are filling seats (ref, your ASM and RSM numbers from today's report) That decline in LF may be indicitave of the future. Most carriers have pared capacity to match the ASM with RASM and to hopefully allow for measured increases. The JBLU method of throwing seats at the market that people are not sitting in will result in continued losses.

The JBLU business model is looking more and more like flyi everyday. Didn't flyi attempt to do transcons to get the cost down then changed their mind quickly and decided short haul is where the money was? Sure you get better RASM from the short haul but it cost you more to fly them. So while the revenue picture looks better the cost picture looks worse.

No one would "miss a beat" if any airline winded down and folded. Since you brought up FLYi, what effect did they have on UAL's yields and bottom line while they were operating? So even if your wish is granted and we liquidate, its not going to be 2nd quarter '06. If we really are dragging the industry down like you think (which I disagree with) get used to it because we are going to be around for a while.

And much like the airline industry in general, its the yield not the number of people flying. "Overcapacity" is the lazy analyst's buzz word d'jour. More people are flying than before 2001 when this big downturn started and capacity has been reduced substantially since then. Load factors are sky high for almost every airline. The news and travel pundits are talking about a tight travel summer due to flights being full and even AAA (the auto club, not the airline) has mentioned how there are less road trip bookings than in the past as more people are flying instead of driving because its cheaper. Its yields/revenue that are down. Fuel is killing all of us (except one well hedged airline) and before you argue how low yields are an LCC induced problem, just remember how many legacies have blocked almost every fare increase over the last few years, even as they themselves were loosing billions, while flying nearly full.

 

[lowecur]

The JBLU business model is looking more and more like flyi everyday. Didn't flyi attempt to do transcons to get the cost down then changed their mind quickly and decided short haul is where the money was? Sure you get better RASM from the short haul but it cost you more to fly them. So while the revenue picture looks better the cost picture looks worse.

You obviously don't understand the difference in CASM between a 50 seat RJ and 100 seat E-jet. Flyi failed because you can't make money when 90% of your capacity is flown with CRJ200s with CASM over $17., and that number would be closer to $20. with todays fuel costs. The 190 CASM will probably come in a tad over $11. with $2.10 jetfuel, and their average RASM will be substantially above that. That's why Neeleman said today the 190 routes were all making money.

Jetblue has made a ton of mistakes with route selection and expansion. With all that said, they still have the ability and nimbleness to turn things around quickly. Will they do it? Well time will tell, but other carriers will have fewer options to checkmate them as a higher percentage of their fleet goes E-jet.

imp:

 

[32LT10]

You obviously don't understand the difference in CASM between a 50 seat RJ and 100 seat E-jet. Flyi failed because you can't make money when 90% of your capacity is flown with CRJ200s with CASM over $17., and that number would be closer to $20. with todays fuel costs.
imp:

I understand the CASM/RASM equation very well. The ERJ is not a saviour many think it is. It still cost a lot of money to purchase, operate etc. The CRJ 50 did have a cost disadvantage but the 190 is not a tremendously greater airplane of scale for cost advantage.

Short haul/Transcon pick one or pick all.

 

[lowecur]

I understand the CASM/RASM equation very well. The ERJ is not a saviour many think it is. Really? It still cost alot of money to purchase, operate etc. Should have done your homework there, slick. The CRJ 50 did have a cost disadvantage but the 190 is not a tremendously greater airplane of scale for cost advantage. :laugh: :laugh: :laugh:

Short haul/Transcon pick one or pick all.

OK!....

imp:

 

[bluejuice787]

I understand the CASM/RASM equation very well. The ERJ is not a saviour many think it is. It still cost alot of money to purchase, operate etc. The CRJ 50 did have a cost disadvantage but the 190 is not a tremendously greater airplane of scale for cost advantage.

Short haul/Transcon pick one or pick all.

Uhh, you are wrong, and "alot" is spelled "a" space "lot". I am sure this was just an oversight on your part.

juice

 

[32LT10]

Uhh, you are wrong, and "alot" is spelled "a" space "lot". I am sure this was just an oversight on your part.

juice

Thanks, corrected. Can you help me with some other words I would like to spell in regards to blue?

 

[Dizel8]

#2 Bringing ALPA on after furloughs, is a pipe dream. And I really hope ALPA takes a hard look at JetBlue before accepting them. Talk about badmouthing the industry's pilots, you never work, fly too little, I want to fly coast to coast without any FAR issues.

Yeah, you are right, ALPA is a stand up organization, even the "unfortunate" CAL pilots are true gentlemen. Get back to us when you get a clue about ALPA and who they should allow into the "club".

 

[Ty Webb]

Uhh, you are wrong, and "alot" is spelled "a" space "lot". I am sure this was just an oversight on your part.

juice

This is a message board, not a spelling bee, if that hasn't become obvious by now. If spelling was a requirement for the ATP the skies would be very quiet.



.

 

[727RedTails]

Just ask 32LT10 about how many actual scabs United has in ALPA....

 

[mynameisjim]

..."with CASM over $17., and that number would be closer to $20. with todays fuel costs. The 190 CASM will probably come in a tad over $11. with $2.10 jetfuel, ...

I thought CASM and RASM Were measured in pennies, not dollars. What's with a $17 CASM?

 

[32LT10]

Just ask 32LT10 about how many actual scabs United has in ALPA....

ALPA Scabs? Well we probably have a handful that fell on their swords and asked forgiveness and were granted for whatever reason. Never have I thought that fair to those of us that did not cross. ALPA National is all about dollars. The decided to allow the scabs from CAL into ALPA. I just as soon would have left them out but they did not ask me.

So if we were keeping score I would say UAL has a less than 10 ALPA members that were scabs. Probably around 150-200 good old fashioned scabs left out of the 300+. I could look up the CAL number but I don't have the time or inclination to do it but I seem to recall them having in the thousands of scabs on the property. Therefore if you are using a scorecard CAL has a larger group of "Loyal Employees" than any other carrier.

 

[lowecur]

I thought CASM and RASM Were measured in pennies, not dollars. What's with a $17 CASM?

My bad. CASM is expressed in cents. Therefore, $17 would actually be 17 cents per mile.:0

imp:

 

[Dizel8]

I thought CASM and RASM Were measured in pennies, not dollars. What's with a $17 CASM?

Well, Shiite, no wonder we lost money, lowercur was running the finances. Truth be told, I am not sure lowercur isn't Fastow

 

[YourPilotFriend]

Who has the highest operational costs? Is it big sky at around .65 CASM?

 

[lowecur]

Well, Shiite, no wonder we lost money, lowercur was running the finances. Truth be told, I am not sure lowercur isn't Fastow

Actually, I'm Lay.

imp:

 

[IB6 UB9]

There are so many issues,
#1 how about the fella that is coming up on his 5th year? (why pay anyone)
#2 Bringing ALPA on after furloughs, is a pipe dream. And I really hope ALPA takes a hard look at JetBlue before accepting them. Talk about badmouthing the industry's pilots, you never work, fly too little, I want to fly coast to coast without any FAR issues.
#3 Pay cuts will be installed with no struggles, if someone talks up, they will furlough more. The senior guys that are close to the end of their contract will be the greatest for the cuts, atleast I would.

I have a lot of friends there, and am nervous for the outcome, but All IS NOT WELL AT BLUE HEAVEN!!!

Wow. I just defecated on the loveseat after reading this one. Maybe if we offer to pay ALPA 15% they'll take just a hard enough look at us to let some of us with furlough cards come crawling back. Jonny, you just crowned yourself the village idiot with your (see my original post on this thread) thoughtful and insightful intelligence. Oh wait, now you're in second place again. There's that disgruntled and drunken old 32 ......

edited for civility--IB, keep it nice please...

 

[COpilot]

ALPA Scabs? Well we probably have a handful that fell on their swords and asked forgiveness and were granted for whatever reason. Never have I thought that fair to those of us that did not cross. ALPA National is all about dollars. The decided to allow the scabs from CAL into ALPA. I just as soon would have left them out but they did not ask me.

So if we were keeping score I would say UAL has a less than 10 ALPA members that were scabs. Probably around 150-200 good old fashioned scabs left out of the 300+. I could look up the CAL number but I don't have the time or inclination to do it but I seem to recall them having in the thousands of scabs on the property. Therefore if you are using a scorecard CAL has a larger group of "Loyal Employees" than any other carrier.

We have around 500 left at CO out of approx.4600 on the seniority list. We had around 1300 20 years ago.

 

[Big Air]

Sell A320's, replace with slave wage E-190. Labor efficiency problem solved.

There will be no A320 classes after the May 2006 class until Jan 2007. Take a hard look at the E190 pay scale because jetBlue imposes a 2 year epuipment lock. That means you would be locked into the E190 for two years after completing training. All new hires will get the E190. There will also be no A320 captain upgrades after June 2006.

 

[Longhorn]

The 320 ca upgrades and new hires into the 320 are only stopped until dec, jan at the latest. We are deferring the deliveries to the end of of the delivery cycle, we are still planning on growing, just slowing things down for now. We are planning on a profit for q2,3,4. Yes, not being given the option for the 190 vs 320 for the new hires is not great, but somthing should and will be worked out. I have faith in our mgnt and the fact they WANT us to succeed. I am wiling to give them the chance to get this thing turned around...and I think they will

 

[ExpWayVis31]

And much like the airline industry in general, its the yield not the number of people flying. "Overcapacity" is the lazy analyst's buzz word d'jour. More people are flying than before 2001 when this big downturn started and capacity has been reduced substantially since then. Load factors are sky high for almost every airline. The news and travel pundits are talking about a tight travel summer due to flights being full and even AAA (the auto club, not the airline) has mentioned how there are less road trip bookings than in the past as more people are flying instead of driving because its cheaper. Its yields/revenue that are down. Fuel is killing all of us (except one well hedged airline) and before you argue how low yields are an LCC induced problem, just remember how many legacies have blocked almost every fare increase over the last few years, even as they themselves were loosing billions, while flying nearly full.

IronCity, You obviously were not paying attention in you Airline Economics 101 class. Yield and capacity go hand in hand. Because of over capacity more people are flying because it is still cheep...Reduce capacity, send the cheep seats back to Amtrak & Grey Hound and only fly the pax who are willing to pay the big bucks and you will make $$.

Another part of B6's problem is that they have so much capacity epically in the NY to FLA market is that they are competing with them selves...It is just too easy to pick another flight and get a better deal.

 

[G4G5]

The 320 ca upgrades and new hires into the 320 are only stopped until dec, jan at the latest. We are deferring the deliveries to the end of of the delivery cycle, we are still planning on growing, just slowing things down for now. We are planning on a profit for q2,3,4. Yes, not being given the option for the 190 vs 320 for the new hires is not great, but somthing should and will be worked out. I have faith in our mgnt and the fact they WANT us to succeed. I am wiling to give them the chance to get this thing turned around...and I think they will

So what you are saying is that on top of selling aircraft and cutting back on routes, the 190 pilots can expect a raise?

Sooner or later the music had to stop and someone had to get stuck in those 190 seats. This will be a defining point for a union. If the senior guys take the, F them, I got mine attitude then the junior guys will start to look for some external help.

 

[Longhorn]

Where the heck did you get that I said the 190 guys get a raise? I did not mean that at all so sorry if it came across that way. What I was getting at is that there are guys a that are excited to work here and that having the option to go to either ac is a nice part of the hiring process. I have no idea what will happen to the guys, and I DO NOT think that a raise will be the answer or even in the cards nor did I mean that but there will be a few that are not happy about only having one option for ac. I do not know if NOT having a choice of ac will affect the hiring process or people still wanting to work here so it will be intersting to see what happens. Like I said, the 320 hiring is slowed to the end of the year due to the 2-5 ac going away. We are still taking delivery of the 6 ac that we had planned on for the year so everything should stay nutral up until dec maybe jan, then the 320 hiring should start again. Like I said, I never ment to allude that the 190 guys will get a raise..

 

[zkmayo]

So what you are saying is that on top of selling aircraft and cutting back on routes, the 190 pilots can expect a raise?

Sooner or later the music had to stop and someone had to get stuck in those 190 seats. This will be a defining point for a union. If the senior guys take the, F them, I got mine attitude then the junior guys will start to look for some external help.

How do you equate selling 2-5 320s and slowing 320 deliveries to 12/yr til 2012 and keeping the 190 deliveries as scheduled as pilots getting stuck in seats? That still results in over 20% growth. There will be no 320 upgrades for 6 months. Then they have to keep hiring/upgrading to fill those seats plus the 190s.

In a round about way, the 190 fos may be getting a raise. They are exploring a fo-qualified-as-capt option whereby 190 fos will be typed and pic qualified and will be paid as such when used in that seat.

A union, and God forbid ALPA, is the last thing Jb needs. For some reason, alot of people on this board seem to forget that 90%+ of jb pilots are former alpa members who learned that they didnt do anything for us at our former airlines. Take 1.95% and give us a pos magazine full of DW pictures. Also, many also think that for some reason jb pilot=wet behind the ears airline pilot. Ill drop you a hint: jb=relatively new airline=many highly experienced pilots, many furloughed from alpa airlines.

If 32TL and Frank L. and whoever else think that threatening BK and liquidation are the biggest nightmares they can dream up, guess what, big deal, many of us have already experienced it before and have bounced back. So go ahead and spew your garbage about everything you know about the industry and Ill go ahead and fall all over myself.

 

[MD80DRVR]

In a round about way, the 190 fos may be getting a raise. They are exploring a fo-qualified-as-capt option whereby 190 fos will be typed and pic qualified and will be paid as such when used in that seat.

Maybe you misread the memo. The "Lance Captain" position applied to both fleets not just the E190. Actually, they will need to continue normal upgrades on the E190 since we will have 26 of them by years end and only 144 scheduled Capt. upgrades. 26*7.3=~190 Captains by years end.

 

[IronCityBlue]

IronCity, You obviously were not paying attention in you Airline Economics 101 class. Yield and capacity go hand in hand. Because of over capacity more people are flying because it is still cheep...Reduce capacity, send the cheep seats back to Amtrak & Grey Hound and only fly the pax who are willing to pay the big bucks and you will make $$.

Another part of B6's problem is that they have so much capacity epically in the NY to FLA market is that they are competing with them selves...It is just too easy to pick another flight and get a better deal.

You're right, and I realize yield and capacity go hand in hand. My arguement is I don't believe there is overcapacity right now. A record number of people are flying, capacity has been slashed since 9-11, and everyone is flying full. Not 100% full but mid 70's to mid 80's system wide depending on the airline.

I think about 85% is considered "full" for systemwide loads. You just can't really get much higher than that or your bumped pax and effects of cancellations increase exopentially with each percentage above that.

I don't think we have to send everyone who won't pay "big bucks" to the bus or train for us all to be profitable. We do need to raise ticket prices though, and our management's philosophy is as flawed as anyone's on that topic (or at least it has been, before these latest rounds of fare hikes started sticking). The common consensus in the ivory towers is even though you only need to raise tix 5 or 10 bucks to get back in the black, if you do then all your pax will run to the competitors pushing you further into the red. This is false when all your competitors are running full. The stratedgy of losing money on each pax but making it up in volume is what's killing us all.

You're right about too many seats on some routes. JFK-FLL what, 17 times a day? Hey that's fine if demand is there, but if you can't get the extra 5-10 bucks a ticket then absolutely cut back. And definately cut back on the number of cheap fare buckets.

And speaking of "just picking another flight and getting a better deal", we have been our own worst enemy in that regards too. We have let way too many people intentionally buy tix in the lowest buckets, show up for the flight they originally wanted to fly on, and stand by for free. Since we don't oversell, yet get a similar number of no shows as any other airline, we almost always have seats so that tactic has been consistently rewarded. Sometimes the fare difference is several hundred percent. This has got to stop.

We have finally figured that out, and will be charging I think a 25 dollar change fee each way and, I hope, the fare difference. There is a line between exceptional customer service and giving away the farm. Our previous (albeit probably "unofficial") policy in this regards crossed that line and its time to fix it.