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JetBlue made good this quarter

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MD80DRVR said:
Maybe it has something to do with the fact we're buying lots of new airplanes, building a hotel, building a new terminal, buying new simulators, opening new cities, hiring tons of people etc....
Mgt has done a poor job in the last 3 or 4 years. They spent their cash on high end infrastructure like drunken sailors in lieu of fuel hedges. Route planning got snookered into the long haul paradigm, and continued opening cities with only a few flights instead of building out a strategic network. They should have stuck to their original plan of opening short to medium haul markets and connected the dots, thus allowing 10 - 15 flts per station, which in turn keeps productivity high.

The 320 is a terrible plane for transcon, and at this point they have too many on order. They should have made an announcement this quarter to keep the fleet flat at around 90 for the next 36 months. By putting this off, they will be forced to make the announcement at some point in the not too distant future. They can turn this around, but it will take a few years. In the meantime, the easypickens on legacy routes is over, and the hunter will the hunted in the next few years. In that time period Jetblue will have to do what they can to keep their head above water until they can turn this battleship around.

:pimp:
 
IMO, a good comparison of B6's results can be matched against FL, which posted very strong results. On a quarterly revenue basis both airlines are closely matched (B6: $612m;FL: $528m). However, on the net income side of the equation FL has produced double the return over B6 with $32m compared to $14m. FL has not gone through a major shakedown of its workforce and uses an LCC business model.

The major difference as I see it is FL's use of smaller gauge aircraft which are optimized against a route structure that is has shorter stage lengths than B6. The good news for B6 is that they are moving in the right direction with the E190 fleet acquisition and new route announcements.

I think the A320s are too big for short haul and too small for long haul and are therefore caught between a rock and hard place as far as future fleet growth opportunities go. I think A319s would be a better type variant going forward for B6.
 
SpeedBird said:
IMO, a good comparison of B6's results can be matched against FL, which posted very strong results. On a quarterly revenue basis both airlines are closely matched (B6: $612m;FL: $528m). However, on the net income side of the equation FL has produced double the return over B6 with $32m compared to $14m. FL has not gone through a major shakedown of its workforce and uses an LCC business model.

The major difference as I see it is FL's use of smaller gauge aircraft which are optimized against a route structure that is has shorter stage lengths than B6. The good news for B6 is that they are moving in the right direction with the E190 fleet acquisition and new route announcements. The 190 will only be 5% of the total B6 capacity by year end. If you keep bringing the 320s on board, it will take years to get the proper equilibriam. They need to cap the 320 capacity asap until the 190 can catch up. Also, B6 has turned to accepting airport incentives when opening new stations. This has been in the form of advertising and reduced landing fees for the first year. This pales in comparison to the 3 to 4M per year(travel bank) accepted by FL to open new stations and keep them running.

I think the A320s are too big for short haul and too small for long haul and are therefore caught between a rock and hard place as far as future fleet growth opportunities go. I think A319s would be a better type variant going forward for B6.
I've been saying this. The 320 looked good while picking low hanging fruit the last 6 years, but the 319 is a more functional a/c for Jetblue at this stage of their growth. New a/c deliveries should be only 319s, as an equal number of old 320s go out the back door. I believe they need to give Airbus a (2) Year lead time, so it wouldn't be possible until 2009.


:pimp:
 
Maintenance Costs???

I just read the 10Q -- I'm surprised the increase in mx costs haven't been discussed. The last line in this paragraph is what concerns me most about JBLU's future. This statement didn't leave room for speculation. I guess this is due to the expiring "warranty" periods on the older aircraft.

From 10Q Summary:

[FONT=&quot]Maintenance materials and repairs increased 67%[/FONT][FONT=&quot], or $9 million, due to an average of 28 additional operating aircraft in 2006 compared to the same period in 2005 and a gradual aging of our fleet. Cost per available seat mile increased 35% due primarily to operating under engine and airframe third-party maintenance contracts in 2006, compared to expensing these repairs on a time and materials basis in the same period of 2005 when we also benefited from one-time warranty coverage on our engines. This increase was partially offset by three fewer airframe checks in 2006 compared to 2005. Maintenance expense is expected to increase significantly as our fleet ages.[/FONT]
 
Schwanker said:
Cost per available seat mile increased 35% due primarily to operating under engine and airframe third-party maintenance contracts in 2006, compared to expensing these repairs on a time and materials basis in the same period of 2005
Translation: $3 million a month in new third party MX contracts.

Instead of booking MX expenses as they occur we are paying for them with a power-by-the-hour contracts: scary stuff.

With these contractual arrangements there is no "speculation" required.

Later…:beer:
 
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Wow...a month old thread comes back to life. Have'nt be beat this to death.
 
Snoopy Mendoza said:
Translation: $3 million a month in new third party MX contracts.

Instead of booking MX expenses as they occur we are paying for them with a power-by-the-hour contracts: scary stuff.

With these contractual arrangements there is no "speculation" required.

Later…:beer:

As I understand it, that is what management is attributing the 35% increase for - Apr thru Jun (past expenses). They later go on to say they expect future expenses to increase significantly.
 
If you are senior to me:

The problem we are facing is the MX expense line item.

Be scared and accept the recall.;)
Later...:beer:
 
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Snoopy Mendoza said:
If you are senior to me:

Ha! Thats good.


Reality check for the Voodoo priest that brought this thread back to life:

It costs more to perform maintenance on 120 airplanes than it did on 100 airplanes. Its going to cost even more to do maintenance on 200 airplanes than what it does for 120. And if you think thats rough.... just wait until we get to 400 planes and see how much the maintenance costs then.
 

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