Jetblue will slow growth even more

[Heavy Set]

(Rewrites first paragraph, updates with growth plan details, profit forecast)

WASHINGTON, July 24 (Reuters) - JetBlue Airways Corp (JBLU.O: Quote, Profile, Research) on Tuesday reported a higher second-quarter net profit and said it would continue to slow growth by deferring some regional jet orders and selling other aircraft.

JetBlue reported net income of $21 million, or 11 cents per share, compared with $14 million, or 8 cents, a year ago.

Wall Street analysts expected earnings of 11 cents per share, according to Reuters Estimates.

Revenue for the quarter was up 19.4 percent to $730 million while fuel expenses decreased 2.8 percent over the same period a year ago to $2 per gallon.

Passenger revenue per available seat mile was up 5.4 percent to 8.46 cents, while costs excluding fuel rose 3.3 percent. Capacity was up 12 percent while passenger traffic rose 13.7 percent.

The company said it would defer 16 Embraer (EMBR3.SA: Quote, Profile, Research) 190 regional jet aircraft originally scheduled for delivery between 2007-2012 to 2013-2015. JetBlue will also sell three Airbus (EAD.DE: Quote, Profile, Research) A320s later this year.

"Slowing capacity growth will allow us to strengthen our balance sheet and facilitate earnings growth," said Dave Barger, who took over as chief executive from David Neeleman in May.

JetBlue stretched deliveries and sold five Airbus jets in 2006.

JetBlue expects to report a third-quarter operating margin between 6 and 8 percent based on an assumed aircraft fuel cost of $2.18 per gallon, net hedges. Pre-tax margin for the quarter is expected between 1 and 3 percent.

JetBlue shares were down 22 cents, or 2 percent, at $11.08 in early trading.

 

[calfo]

...starting to circle the bowl...

 

[skiav8tor]

...starting to circle the bowl...

Right...we're making money again, and getting smarter as we grow (albeit, slower), so it must be all over!! That didn't take long...

 

[samballs]

Right...we're making money again, and getting smarter as we grow, so it must be all over!! That didn't take long...

Seems like that has stopped

 

[CHQ-FO]

Seems like that has stopped

Growth, even at the lowered rate, is 10% per year.

 

[Cheeta]

Growth, even at the lowered rate, is 10% per year.

10 down to 7 E190's -300 seats per year added

5 sold 06 3 sold in 07 320's net +300 seat over last year.

no change in groth for 07...16%

we reduced 190's but sold fewer 320's

will see about next year

190 is now flying 11.2 hrs a day and above 95+% dispatch relibliity...big improvment over 6 months ago

new mods really did work!

 

[FlyBoeingJets]

10 down to 7 E190's -300 seats per year added

5 sold 06 3 sold in 07 320's net +300 seat over last year.

no change in groth for 07...16%

we reduced 190's but sold fewer 320's

will see about next year

190 is now flying 11.2 hrs a day and above 95+% dispatch relibliity...big improvment over 6 months ago

new mods really did work!

Yeah, but what is the time to Captain with current growth projections? 5 years or more?

In 3 years we have good odds the growth will slow even more. A 5 year time to Captain now might turn into 7+.

 

[MD80DRVR]

...starting to circle the bowl...

Sounds like you guys are too.......

Continental also announced plans to slow 2008 capacity growth to between 3% and 4%, down from earlier projections of 5%-7%.

The airline announced plans to sell 10 Boeing 737-500s to Russian carrier Transaero, with Bloomberg saying the planes are expected to leave Continental's fleet between October 2007 and November 2008. Reuters notes that transaction comes "amid the softening domestic market," adding that Continental is "in discussions to sell another five 737s." Bloomberg writes that Continental "has delayed until 2010 from 2009 the delivery of six 737NG aircraft. It also has moved forward to 2008 from 2009 the delivery of three 737-900ER jets."

 

[skiav8tor]

Yeah, but what is the time to Captain with current growth projections? 5 years or more?

In 3 years we have good odds the growth will slow even more. A 5 year time to Captain now might turn into 7+.

That's still a time frame more attractive than any other Major/National/LCC...

E190 - 2-3 years
A320 - 4-5 years

 

[Jetjockey]

My airline pays more, my airline is growing faster, my airline will have a sooner upgrade, my girlfriend is prettier than your girlfrined, my dad can beat up your dad. My god! Who the frick cares!

At least this piece of shee(i)t industry we try to earn livings at, is turning around. Let's all be happy for that.

 

[skiav8tor]

Actually...well said!! I'll bet the convenience store clerks don't act like we do...we each work for who we do, because we love to fly, and the company lets us!!

 

[XBOEINGDRVR]

Good one Jetjockey....its so true. made me laugh!

 

[BigMeat]

I didnt know that the E-190 was a regional jet. Does that make jet-blue the regionals? Cals upgrade is around three years give or take.

 

[Headfake14]

Just about everyone is slowing growth. SWA cut deliveries in half I think for next year. So whats the big deal....we are in the GREEN. This industry is a SIN wave...we all know that.

So the 190 deliveries are slowing...BUT, like was said before, the reliability is better...utilization will go up and it'll be like we still got 10 ships this year.

ride the (sin) wave baby...

 

[IronCityBlue]

Just about everyone is slowing growth. SWA cut deliveries in half I think for next year. So whats the big deal....we are in the GREEN. This industry is a SIN wave...we all know that.

So the 190 deliveries are slowing...BUT, like was said before, the reliability is better...utilization will go up and it'll be like we still got 10 ships this year.

ride the (sin) wave baby...

OK I gotta admit that's one way of looking at it that I hadn't thought of. I doubt utilization will ever increase proportionately relative to the recent (additional) deferrals, there is definately additional pilot positions that can be created by using those planes more efficiently. Not to mention I think we have 4 or 5 spares for a fleet of less than 30 aircraft. If reliability really is improving I would immagine at least 2 or 3 of those could be moved into the schedule.

OK I'm officially 10% less torqued off now, thanks! :beer:

 

[clickclickboom]

9 months ago this thread would have turned into a jb bash fest about how we will be gone in 12 months.. Obviously hearing about other airline slowdowns has put some of the posters " in check "

The reality is that economic indicators show a slowdown in the USA.. If companies are looking to control growth selling their depreciated aircraft is an easy way to go.

The Euro is strong and airlines here can get top dollar due to demand and the perceived discount the buyers are getting based on the exchange rate.


I would rather have a job in 12 years then an upgrade in 12 months!!!

 

[PCL_128]

That's still a time frame more attractive than any other Major/National/LCC...

E190 - 2-3 years
A320 - 4-5 years

AAI - 3 years
CAL - 3-4 years
Spirit - likely 4 years with projected growth
Frontier - 4 years

 

[capt. megadeth]

That's still a time frame more attractive than any other Major/National/LCC...

E190 - 2-3 years
A320 - 4-5 years

Yeah, can't wait to make $84/hour to be a 3 year E190 capt! :laugh: That's soooooo attractive. GMAFB!

Oh yeah, and be based in the biggest dump in this country. Where do I sign up?

P.S. I have nothing against JetBlue but I don't think they are paying you guys enough. The pay is a joke.

 

[brainhurts]

Yeah, can't wait to make $84/hour to be a 3 year E190 capt! :laugh: That's soooooo attractive. GMAFB!

Oh yeah, and be based in the biggest dump in this country. Where do I sign up?

P.S. I have nothing against JetBlue but I don't think they are paying you guys enough. The pay is a joke.

We are working on it. There have been improvements.

 

[Cheeta]

Yeah, can't wait to make $84/hour to be a 3 year E190 capt! :laugh: That's soooooo attractive. GMAFB!

Oh yeah, and be based in the biggest dump in this country. Where do I sign up?

P.S. I have nothing against JetBlue but I don't think they are paying you guys enough. The pay is a joke.

The day you start year 3:

RSV=75 hrs @86.42 combined rate

line =84 hrs @90.61 combined rate

I agree not enough...but....high than US Airways rates

 

[Splinter]

My airline pays more, my airline is growing faster, my airline will have a sooner upgrade, my girlfriend is prettier than your girlfrined, my dad can beat up your dad. My god! Who the frick cares!

At least this piece of shee(i)t industry we try to earn livings at, is turning around. Let's all be happy for that.

A-MEN! We should all focus our efforts in improving our QOL, pay, and benefits throughout the industry, not pecker size contests. The only smart move to make as an airline pilot is to quit/retire. No airline job has stability, so why argue over where is better to work? Let's keep the rhetoric to something more substantial like REAL rivalries...like "Yankees Suck", and "Auburn University, so easy a caveman can do it".

 

[Splinter]

Yeah, can't wait to make $84/hour to be a 3 year E190 capt! :laugh: That's soooooo attractive. GMAFB!

Oh yeah, and be based in the biggest dump in this country. Where do I sign up?

P.S. I have nothing against JetBlue but I don't think they are paying you guys enough. The pay is a joke.

How long has your airline been in business? What did they pay in year 7? (adjusted for inflation, of course)

Not to say we don't press for more. IMO, there should be no Captain seat in the industry less than $100/hour, period, and no ticket should EVER be cheaper than Amtrak or Greyhound.

 

[On Your Six]

How long has your airline been in business? What did they pay in year 7? (adjusted for inflation, of course)

Not to say we don't press for more. IMO, there should be no Captain seat in the industry less than $100/hour, period, and no ticket should EVER be cheaper than Amtrak or Greyhound.

She flies a 757/767 for UPS. I know a few JB guys who have moved over to UPS too. I guess working nights is preferrable to earning low wages on the E190...

 

[capt. megadeth]

How long has your airline been in business? What did they pay in year 7? (adjusted for inflation, of course)

Not to say we don't press for more. IMO, there should be no Captain seat in the industry less than $100/hour, period, and no ticket should EVER be cheaper than Amtrak or Greyhound.

Airline started in 1988.

Year 7 FO is $129.73/hr and year 7 Capt is $161.28/hr all fleets

In 2012, year 7 FO will be $161.28/hr and year 7 Capt will be $244.07 all fleets

I agree there should be no Capt seat less than $100/hr. Furthermore, I don't think it should be legal to charge less for a ticket than it would cost to at least break even on the flight.

All that being said, I am not bragging about our rates (God willing we stay in business for a loooong time.....you just never know), I am just answering your question. I do think that JetBlue is f***ing you guys up the a$$ with no lube with those 190 rates. It's a shame. That fact alone makes me doubt and not like your management.

 

[curtaindriver]

AAI - 3 years
CAL - 3-4 years
Spirit - likely 4 years with projected growth
Frontier - 4 years

Those numbers are bogus!! You can't look at the most junior captain and say that is the upgrade time looking forward. Cal, with age 65 coming will slow, not to mention selling 737-500's. AAI deferring some deliveries...impossible in 3. Frontier...seriously? Getting 13 planes in the next 3 1/2 years. No way 4 year upgrade. Spirit, I'll give you that.

JetBlue must raise the pay on the 190....no doubt

CD

 

[WDE]

Agree, the E-190 rates suck, but then again so does Bama!

 

[IronCityBlue]

beware the law of unintended consequences

I don't think it should be legal to charge less for a ticket than it would cost to at least break even on the flight.

I share your frustration over domestic fares. But if we passed a law like that, it would actually have an opposite effect from what I think you are advocating.

It would prevent established (especially legacy) airlines from matching fares of start ups like SkyBus and lower CASM airlines like JB, AirTran and Southwest. That would give a huge advantage to airlines that are cheaper than others, which would put even more pressure on all airlines to become even cheaper.

A better way would be to make it way more difficult to start up an airline in this country. Of course JB was a start up, all airlines were. But at some point the cycle of buy new planes, pay new workers first year start up pay, and pass the savings along to the consumer has got to stop.

It won't be long before we're talking about SkyBus's declining cost advantage, increased labor and maintenence costs, etc at the very same time the next start up appears on the scene.

 

[FlyAuburn]

Agree, the E-190 rates suck, but then again so does Bama!

That's right! War Eagle! Have you guys seen that video of the Bama coach picking his nose and eating it during a basketball game? Busted!!! :laugh:

 

[capt. megadeth]

I share your frustration over domestic fares. But if we passed a law like that, it would actually have an opposite effect from what I think you are advocating.

You may be right. I am not an expert in that kind of stuff. I just think something needs to happen to prevent all this crap.

 

[skiav8tor]

REAL rivalries...like "Yankees Suck",


Go Red Sox...!!