Jetblue Loses $32m

[lowecur]

They are selling 2 older 320s, and deferring 5,5,2 -320s per year from 2007 to 2009....total of 12. This is all preliminary stuff and you will see bigger sales and deferrals as the year goes on, once the NWA/DL saga's are over.

Lots of work to do, but it's doable if they continue to right size growth in an airline world that Neeleman didn't expect. What happened to his matra that he hopes oil continues to go up, cuz all Jetblue has to do is raise fares by $10. for every $10bbl of oil.:laugh: I'm beginning to wonder if this guy has a clue on how to run an airline.

http://biz.yahoo.com/pz/060425/97926.html

imp:

 

[airline#5]

It must be the 100 seater rates draggin down the bottom line.

 

[IB6 UB9]

This thread should bring out the finest of personalities...I predict numerous thoughtful and insightful posts.

 

[COpilot]

I just hate that term,,, "Right Sizing"

"D'oh"!

Your right IB6, not much more insightful than that, sorry.

 

[Bavarian Chef]

Are we a legacy yet? We're losing money, we're parking airplanes (sort of) -- what's next? Oh that's right labor concessions. As my kid would say: "Can we do it? Yes we can!"

 

[JBFlyer]

"Mr Scott....I need those shields NOW !!!"

Can't wait to see how this thread pans out.

 

[Bavarian Chef]

Please don't dork out on me, man. Get a hold of yourself, Jim! I'm a pilot not a doctor...

 

[Jonny Sacko]

Are we a legacy yet? We're losing money, we're parking airplanes (sort of) -- what's next? Oh that's right labor concessions. As my kid would say: "Can we do it? Yes we can!"

Nope, just a company losing money that will have to raise rates to stay in business.

 

[filejw]

To bad he didn't stick to his original plan. Underused facilities (JFK/LGB)one type A/C and just grow a bit slower.Now he just looks like everybody else with some of the same problems.

 

[General Lee]

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

 

[GVFlyer]

The investor conference call is on now. It seems that the strategy is to raise prices (transcon $349 to $399), cut costs, increase labor efficiency and slow the increase of capacity. Go Forward Plan, Right Size, Return to Profitability Plan, blah, blah, blah...

I think that the whole losses issue was predictable when Neeleman spent $125 million on unneeded facilities and abandoned the Herb Kelleher LCC one aircraft model.


GV

 

[lowecur]

In conference call David is telling analysts:

• Losing money on north/south market. LGA/JFK to FL capacity will be reduced 15%, BOS to FL 25%, and Transcons 10% this summer
• 2 to 5 a/c will be put up for sale....for now
• Transcon further pull down to begin in fall
• Route network diversification to shorter legs
• More cities will be added than 8-10 originally announced
• All 190 routes are profitable with adjusted 55% increase in RASM
• RASM will increase to low teens in 2nd Q/190 will be key driver to significant RASM growth throughout the year
• Costs to be reduced by $70M per yr - 93 per employees per plane to be reduced. Forecasting a profit for the remainder of year!
• Terminal 6 @JFK will have 7 more gates starting in June = 21 Total. Also, they have use of 4 gates in one of the adjacent terminals. In fact they are using 1 gate over there for some flts now.
• Connecting traffic will become a larger percentage in this adjusted model. This means JFK & BOS will serve as the primary hubs with possibly MCO as a gateway for the Islands/Latin America.

 

[#1 Windmilling]

Listening to the call, I have to ask, why does Jamie Baker speak as if he has a pole stuck in his as%%$$#$s? "David, whyyyyyy do you thiiiiink that the neeeew markets wiiiiillll appppppeaaal to the buisssennnesss travvvveler?" What a clown!

#1W

 

[Frank Lorenzo]

I feel bad for Neeleman. As an early birthday present, I bought him some new software.

http://www.strategydynamics.com/products/peopleexpress2000.asp

 

[canyonblue737]

They are selling 2 older 320s, and deferring 5,5,2 -320s per year from 2007 to 2009....total of 12. This is all preliminary stuff and you will see bigger sales and deferrals as the year goes on, once the NWA/DL saga's are over.

Lots of work to do, but it's doable if they continue to right size growth in an airline world that Neeleman didn't expect. What happened to his matra that he hopes oil continues to go up, cuz all Jetblue has to do is raise fares by $10. for every $10bbl of oil.:laugh: I'm beginning to wonder if this guy has a clue on how to run an airline.

http://biz.yahoo.com/pz/060425/97926.html

imp:

Before anyone flames me... I am about to make an anti-Lowecur comment, not in anyway an anti-Jetblue or pro-Southwest comment. Thank you.

Lowecur, dude... your airline predictions, so detailed over the years, well they have been dead wrong. You have been prediciting big Jetblue success and a big Southwest demise? So far wrong on both accounts. You willing to admit you don't know anymore than the rest of us yet?

 

[lowecur]

Before anyone flames me... I am about to make an anti-Lowecur comment, not in anyway an anti-Jetblue or pro-Southwest comment. Thank you.

Lowecur, dude... your airline predictions, so detailed over the years, well they have been dead wrong. You have been prediciting big Jetblue success and a big Southwest demise? So far wrong on both accounts. You willing to admit you don't know anymore than the rest of us yet?

OK, I don't know anything more than the rest of you. Jeesh, I can't believe I stooped that low.

imp:

 

[elag777]

B6 stock up 10% as of 12:30pm EST............

 

[32LT10]

B6 stock up 10% as of 12:30pm EST............

The stock should go up today with those thinking that the changes are going to save the carrier. This will be followed by a precipitous decline in the stock in the coming weeks.

With the airline slowing growth and selling planes did anyone ever find out what the furlough ritual would be at JBLU? With senior guys in the EMB over some of the junior guys in the Bus will they rationalize the list in seniority order and how much will the retrenchment itself cost in the long run. Finally is the projection of 600 new hires this year still holding and what are the guys that are waiting on classes being told?

 

[IronCityBlue]

careful what you wish for

The stock should go up today with those thinking that the changes are going to save the carrier. This will be followed by a precipitous decline in the stock in the coming weeks.

With the airline slowing growth and selling planes did anyone ever find out what the furlough ritual would be at JBLU? With senior guys in the EMB over some of the junior guys in the Bus will they rationalize the list in seniority order and how much will the retrenchment itself cost in the long run. Finally is the projection of 600 new hires this year still holding and what are the guys that are waiting on classes being told?

There is no way we will hire 600 this year. For what its worth 530 was the highest number I had heard from any real source (read: not your average line pilot taking a swag based on gut feelings) and even the 530 was a best case scenario. With the selling of airframes that number will of course be reduced. Although some of the background checks take endlessly long for some of the folks waiting for offers, we don't really have that deep of a "pool" so interviewing and hiring should continue throughout the year for the most part.

If the end of the world is 20 something percent growth instead of 30 something percent growth, I guess we'll have to dig in and try to find a way to survive.

That same doom and gloom report also says we will be profitable soon too, based on I think $2.10 a gallon jet fuel (not the higher priced car gas). I'm not sure of the exact barell/crack spread price that is correlated from, but our projections on oil were in the neighborhood of mid to upper 60's for quite a while, and we have decent (though not completely comprensive) protection on spikes above that. If oil stays at 70 something or goes higher and stays there, they'll be plenty of pain to go around.

Even though we sign individual contracts, we have a common seniority list and that is part of our contracts. Furthermore, if they furlough people everyone gets 70 hours a month pay for the duration of their 5 year contract. Since its a binding contract the only "get out of jail free card" the company has is to cower in bankruptcy up to the legal limit and throw out contracts and in general not pay their bills.

IF they do that, expect them to renogiate lease payments, interest, gate fees and in every other bill and debt in general. They may even get spry and impose a pay cut on everyone. As much as you blame your and the industry in general's woes on JetBlue (how do you spell that again?) do you really want to deal with an even leaner and meaner Blue (sp?) in the future? Be careful what you wish for.

On a totally unrelated note, the conference call and quartly report (the same one you just read all the way through to form your fact based deductions upon) both say how effective and reliable the E190 is becomming. Its a great airplane and shaping up to be a narrowbody competitor and an RJ killer. That means any legacy who loosens up their scope clause to allow that airplane to be outsourced to a portfolio of low bidders will likely recieve an even bigger "bargaining credit" that they can use to lessen the next round of pay cuts or preserve an A or B fund for a few more weeks.

If they do try to furlough out of order (or at all), we will bring in ALPA ASAP. No one gets your furloughs back on the property faster than ALPA.

 

[Side Stick]

The stock should go up today with those thinking that the changes are going to save the carrier. This will be followed by a precipitous decline in the stock in the coming weeks.

With the airline slowing growth and selling planes did anyone ever find out what the furlough ritual would be at JBLU? With senior guys in the EMB over some of the junior guys in the Bus will they rationalize the list in seniority order and how much will the retrenchment itself cost in the long run. Finally is the projection of 600 new hires this year still holding and what are the guys that are waiting on classes being told?

I would expect to see that number adjusted down a little. There is already talk of short lines, offering LOAs, and Capt qualified F/Os.

Probably won't see furloughs unless we attack Iran. Some believe that will happen soon, btw. Then all bets are off.

 

[zonker]

Even though we sign individual contracts, we have a common seniority list and that is part of our contracts. Furthermore, if they furlough people everyone gets 70 hours a month pay for the duration of their 5 year contract. Since its a binding contract the only "get out of jail free card" the company has is to cower in bankruptsy up to the legal limit and throw out contracts and in general not pay their bills.

IF they do that, expect them to renogiate lease payments, interest, gate fees and in every other bill and debt in general. They may even get spry and impose a pay cut on everyone. As much as you blame your and the industry in general's woes on JetBlue (how do you spell that again?) do you really want to deal with an even leaner and meaner Blue (sp?) in the future?

On a totally unrelated note, the conference call and quartly report (the same one you just read all the way through to form your fact based deductions upon) both say how effective and reliable the E190 is becomming. Its a great airplane and shaping up to be an RJ killer. That means any legacy who loosens up their scope clause to allow that airplane to be outsourced to a portfolio of low bidders will likely recieve an even bigger bargaining credit that they can use to lessen the next round of pay cuts or preserve an A or B fund for a few more weeks.

If they do try to furlough out of order (or at all), we will bring in ALPA ASAP. No one gets your furloughs back on the property faster than ALPA.

A paycut from the employees won't make this company any leaner. We're already cut to the bone in that department.

It's a revenue problem and until they fix it our problems won't go away.

 

[Green]

The investor conference call is on now. It seems that the strategy is to raise prices (transcon $349 to $399), cut costs, increase labor efficiency and slow the increase of capacity. Go Forward Plan, Right Size, Return to Profitability Plan, blah, blah, blah...

I think that the whole losses issue was predictable when Neeleman spent $125 million on unneeded facilities and abandoned the Herb Kelleher LCC one aircraft model.


GV

Increase Labor efficiency???!!! How? Don't you guys work right up to the FAR limits? Maybe he is referring to paycuts? I can't imagine the pilot group would be willing to take a pay hit. I guess Dave could just impose one but that would be asking for a union.

 

[Ty Webb]

quartly report

. . . . the conference call and quartly report

Our Flightinfo.com Dictionary defines quartly report as, "The loud belch that is sure to follow chug-a-lugging a 32-ounce bottle of low-grade beer".


.

 

[SWA/FO]

Costs to be reduced by $70M per yr - 93 per employees per plane to be reduced. Forecasting a profit for the remainder of year!

We have less employee per airplane then that, I believe.

imp: the SWA/FO

 

[IronCityBlue]

spelling beigh

Our Flightinfo.com Dictionary defines quartly report as, "The loud belch that is sure to follow chug-a-lugging a 32-ounce bottle of low-grade beer".


.

You're right, and all subsequent quartly reports issued in direct response to the original would be referred to as quartly retorts.

I stand corrected. :beer:

 

[Hutchman]

Increase Labor efficiency???!!! How? Don't you guys work right up to the FAR limits? Maybe he is referring to paycuts? I can't imagine the pilot group would be willing to take a pay hit. I guess Dave could just impose one but that would be asking for a union.

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

 

[Jonny Sacko]

There is no way we will hire 600 this year. For what its worth 530 was the highest number I had heard from any real source (read: not your average line pilot taking a swag based on gut feelings) and even the 530 was a best case scenario. With the selling of airframes that number will of course be reduced. Although some of the background checks take endlessly long for some of the folks waiting for offers, we don't really have that deep of a "pool" so interviewing and hiring should continue throughout the year for the most part.

If the end of the world is 20 something percent growth instead of 30 something percent growth, I guess we'll have to dig in and try to find a way to survive.

That same doom and gloom report also says we will be profitable soon too, based on I think $2.10 a gallon jet fuel (not the higher priced car gas). I'm not sure of the exact barell/crack spread price that is correlated from, but our projections on oil were in the neighborhood of mid to upper 60's for quite a while, and we have decent (though not completely comprensive) protection on spikes above that. If oil stays at 70 something or goes higher and stays there, they'll be plenty of pain to go around.

Even though we sign individual contracts, we have a common seniority list and that is part of our contracts. Furthermore, if they furlough people everyone gets 70 hours a month pay for the duration of their 5 year contract. Since its a binding contract the only "get out of jail free card" the company has is to cower in bankruptcy up to the legal limit and throw out contracts and in general not pay their bills.

IF they do that, expect them to renogiate lease payments, interest, gate fees and in every other bill and debt in general. They may even get spry and impose a pay cut on everyone. As much as you blame your and the industry in general's woes on JetBlue (how do you spell that again?) do you really want to deal with an even leaner and meaner Blue (sp?) in the future? Be careful what you wish for.

On a totally unrelated note, the conference call and quartly report (the same one you just read all the way through to form your fact based deductions upon) both say how effective and reliable the E190 is becomming. Its a great airplane and shaping up to be a narrowbody competitor and an RJ killer. That means any legacy who loosens up their scope clause to allow that airplane to be outsourced to a portfolio of low bidders will likely recieve an even bigger "bargaining credit" that they can use to lessen the next round of pay cuts or preserve an A or B fund for a few more weeks.

If they do try to furlough out of order (or at all), we will bring in ALPA ASAP. No one gets your furloughs back on the property faster than ALPA.

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!!!

 

[IronCityBlue]

logical conclusions

A paycut from the employees won't make this company any leaner. We're already cut to the bone in that department.

It's a revenue problem and until they fix it our problems won't go away.

I agree with you 100%. I wasn't predicting (and certainly not advocating) that's what would happen. I merely brought that up as a consequence to someone else's doom and gloom predictions relating to us. IF our sky is falling as some predict (which btw I don't believe it is) THEN we will eventually be pushed into CH 11. IF that happenes, THEN we would become even leaner and meaner than we already are.

Since the poster to whom I was responding to seems to think we are a major source of industry and pilot professional woes as it is now, I was showing him (or her) how much worse it would be if his/her wish came true.

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?

 

[IronCityBlue]

right

There are so many issues,
#1 how about the fella that is coming up on his 5th year? (why pay anyone)

First of all, everyone who has hit the 5th year mark has been renewed thus far. Not renewing people at that point simply doesn't provide that much savings for the company. They would have to hire and upgrade people and have as many as 4 training events over all 4 seats in both planes to replace just one 5th year guy. Hardly woerth the couple bucks an hour savings they would get by keeping people a couple years more junior. Also, that's one of few guaranteed ways to get a union on property and even if you're a anti-management conspiracy theorist them doing that for the pittance of savings they would get (less the massive cost of non growth related training) just doesn't add up.

#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.

Oh no he didn't! You didn't just threaten us with ALPA refusing to let us join, did you? Oh my God, he did, didn't he! Moderators, may I suggest a flightinfo.com post hall of fame, with this being the first entry? That's rich my friend!

Even though you don't deserve a flame-retardant, logical response, I'll give you one anyway. We are badmouthed FAR more than we badmouth any other airline or its pilots. I think you knew that though. The coast to coast thing you are referring to is primarily about duty time limits and circadian cycles as being more important than flight time hourly limits. If you disagree with that you disagree with NASA in addition to almost all of European and Canadian regs wich like it or not, are going to manefest themselves here. The duty times that are being looked at are not long enough to reliably make sense for very many transcon turns. More like one Florida leg after one transcon or something to that effect, with the end result being less radical disruptions to natural sleep cycles and fewer working days per week/month/year. Nice try with the slam though, really.

#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 bet you would. Speaking of senior pilot greed and ALPA, did you know that every legacy airline and ALPA have created more jobs than they have furloughed in the last 5-6 years? Jobs that didn't go to the ALPA brothers and sisters they should have, though. They went to portfolios of outsource providers, many not ALPA or union at all. This happened with the blessing and support of ALPA. In fact, it could not have happened otherwise. The senior pilots all sold their brothers and sisters down the river for "bargaining credits" to mitigate their own pay cuts, or to temporarily postpone the emimination of pension funds. Makes you wonder why we are begging for ALPA on the property here. Oh that's right...

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

In case you weren't paying attention, all is not well in the passenger aviation industry. What's your point?

 

[HighSpeedClimb]

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

How can you cut more than you already pay these poor folk.
E190 FO from $37 to $53 and CA $71 to $89 OUCH
Of course you could pay those same rates for the A320. Their union would never agree to that. Wait, what union?