Moodys revises Jetblue debt to Negative

[Dangerkitty]

GeneralLee...

are you serious? You honestly can't see the parallels between Jetblue and People's Express/New York Air?

Jetblue has a good product that the customers like. That's fantastic! But as they grow as a company, as their employees become more senior, and as they deviate from their successful formula (i/e new E-Jets) they will find themselves at risk for failure.

Wall Street is obviously beginning to recognize that unfortunate reality.

I have a new rule for flightinfo.com.

If you don't understand nor realize someone's attempt at sarcasm during a post then you are required to write a 10 page thesis on sarcasm and the pros/cons it has had on American Literature.

 

[General Lee]

Sooooooooooo............When did you apply?

The way people are retiring here, I should be number 1 at Delta in a few months..... No, I don't plan on applying there, and I was just making fun of the Jetblue guys who think their $hit don't stink. Every airline has problems with high fuel prices, and Neeleman has stated that even $80 a barrel oil could be handled by Jetblue and their great business plan. Obviously Moody's feels differently. But, they are a good airline with Live TV, and people like that. I don't think People'sExpress had any one gadget besides lower fares. Jetblue has lower fares and free Live TV. They are the ones to beat, and we are trying to compete with Song.

So, let me say it again: I think jetblue is a good airline with some great ideas (LiveTV and now the E190 etc). But, as the years go by, the costs will mount (mx for Airbi etc), and that may be why the pay scales for the E190 are "regional" level---to help pay for future costs.....


Bye Bye--General Lee

 

[lowecur]

This is nothing that was not expected. With oil reaching $62 a barrel, I would expect further down grades.

I believe most of the U.S. airline industry, cept for you know who, has a negative rating.

 

[lowecur]

The way people are retiring here, I should be number 1 at Delta in a few months..... No, I don't plan on applying there, and I was just making fun of the Jetblue guys who think their $hit don't stink. Most of the people who post Jetblue are nice people. I think they get tired of hearing that they lowered the bar. Most of the pilots that pound them are out of work, and find them a good scapegoat. Every airline has problems with high fuel prices, and Neeleman has stated that even $80 a barrel oil could be handled by Jetblue and their great business plan. He believes that. Can they do it? Yeah, I think they can. He said for every $20 increase in oil, Jetblue only needs a $10 ticket increase. Obviously Moody's feels differently. Moody's sees the smaller margins and unproven new business plan, and they owe bond investors a fair rating. Are they wrong?...No. Once they see the 190 will be a plus to their financials, they will reaffirm to stable. But, they are a good airline with Live TV, and people like that. I don't think People'sExpress had any one gadget besides lower fares. Jetblue has lower fares and free Live TV. They are the ones to beat, and we are trying to compete with Song.

So, let me say it again: I think jetblue is a good airline with some great ideas (LiveTV and now the E190 etc). But, as the years go by, the costs will mount (mx for Airbi etc), and that may be why the pay scales for the E190 are "regional" level---to help pay for future costs.....the 190 is regional because MidAtlantic and Republic set the bar for the E-jet. Why should Delta or the new US Airways have a cost advantage. You have a short memory.


Bye Bye--General Lee

.....

 

[BenderGonzales]

People's Express had "gadgets" - Buy Your Lunch Onboard!
Oh "People's" had its own "gadgets". You paid for tickets once you were underway (like a train). The F/As accepted cash for snacks en'route. The entertainment was watching pilots load and unload luggage.

Growth Junkies
ol' Lorenzo and Donn Burr were growth junkies too. Remember the 747? Might have been a white elephant for People's Express, but it had much lower costs per seat mile than the E-190.... and it was a proven airframe without the gremlins that the Brazillian's seem to install as standard equipment.

The original Greyhound Air. Thats what people wanted. That's what People's Express provided.

Jetblue Provides Value to its Customers
Today people want a little bit more for their money and, frankly, its fantastic that Jetblue was able to recognise this and provide a product that its customer wants for a fair price. The Legacy airlines could learn a lot about providing value from Jetblue. The onboard entertainment is a stroke of genius!

Just because something works today, doesn't mean it will work tomorrow!
This doesnt mean that I believe Jetblue will ultimately be successful. I hope it will for its employees. But I have my doutbs. Over time I believe they will experience growing pains as their fleet and their employee group matures.

If "W" doesn't do somethin' about oil prices, we'll all be driving Flintstone cars!
This may all be academic. If oil prices don't come under control the ONLY company that could be profitable will be Mesa -- and only if they buy 757s and fly them at their existing B1900 payrates. (tongue-in-cheek...a little)

 

[General Lee]

Lowecur,

I don't think Republic or MDA set the bar for the E190. The E190 never flew at MDA, and Republic just now has decided to use them for USAir. The Jetblue E190 rates were established first, and they are very low for a 100 seat aircraft. No short term memory loss here for me. The part that made me mad about that deal is the lack of outrage from the current jetblue pilots, since most knew at the time that they wouldn't have to fly those new planes since they were still getting plenty of Airbi. And, any airline can sustain higher gas prices as long as they add money to the fares. Could Neeleman sustain his product without raising fares and higher oil does come along? No.


Bye Bye--General Lee

 

[Eagleflip]

General, we agree on (at least!) one thing...our current EMB rates are "Regional" in nature. And in my mind, they are wrong. Time will tell what will happen with this particular pay scale. I am optimistic, however, that the rates will be changed for the better once the jet proves its economic utility.

 

[LarryinTN]

that may be why the pay scales for the E190 are "regional" level---to help pay for future costs.....

The JB E190 pay rates were, I believe, derived by taking the A320 pay rates and keeping the same hourly rate per seat. That the resulting E190 rates are so low just points out what I long ago discovered...

On a cost per seat (or per ASM) basis, the regional pilots are grossly OVERpaid while the wide body, international pilots are well UNDERpaid.

I figured this out nearly 15 years ago while flying the trusty J32 for American Eagle. We were in contract negotiations all convinced that we deserved more than the $28k/$15k a J32 Capt/FO was earning yet the company kept telling us that we were already being paid as much as they could afford. I broke out the calculator to prove them wrong and found out that the numbers did not support our case! It was right then and there that I forever gave up on any notion that a career at a Regional Airline was an acceptable option for me.

Here's an example of how the calculation works...

According to AirlinePilotPay.com the rates at DAL for a B777 crew is $216/$147 for the CA/FO. That's $363/hr for the entire crew. The rates for a typical ASA CRJ-200 crew might be $75/$40 or $115/hr. A DAL B777 has 268 so the crew cost per seat-hour is $363/268 = $1.37 while on the ASA CRJ it's $115/50 $2.30. Try it on a UAL crew and the disparity is even worse!

I'm sure the idea of sticking with the same cost/seat from the A320 sounded really good to the JetBlue guys until they started running the numbers. Hopefully they'll remember to hold their management to that same formula if/when they even get larger airplanes!

 

[LarryinTN]

Eagleflip,

Has there been any word on what new cities the E190s will allow JB to open? Sure would be nice to see you guy in BNA!

 

[lowecur]

Lowecur,

I don't think Republic or MDA set the bar for the E190. If you don't think the 170 and 190 are one series, then you need to do your homework. You can't have a regional rate on the 170 and mainline rate for 190. That's just plain silly. The E190 never flew at MDA, and Republic just now has decided to use them for USAir. The Jetblue E190 rates were established first, and they are very low for a 100 seat aircraft. Symantics. Reread what I just said. No short term memory loss here for me. The part that made me mad about that deal is the lack of outrage from the current jetblue pilots, since most knew at the time that they wouldn't have to fly those new planes since they were still getting plenty of Airbi. And, any airline can sustain higher gas prices as long as they add money to the fares. Could Neeleman sustain his product without raising fares and higher oil does come along? No.


Bye Bye--General Lee

Again, the E-jets are one series. They were never met to be broken apart. Smart huh? Check the archives, Skywest had a contract to fly up to a 99 seater long before Jetblue. The MDA and Republic rates were just part of the natural progression of the 170.

 

[General Lee]

Again, the E-jets are one series. They were never met to be broken apart. Smart huh? Check the archives, Skywest had a contract to fly up to a 99 seater long before Jetblue. The MDA and Republic rates were just part of the natural progression of the 170.

With your reasoning, we could have the next series, the E192 with 120 seats, and then the E193 with 140 seats, and then the E194 with 160 seats, and then the E196 (I skipped one number) with 180 seats-----and since they are all within 20 seats, they should all have regional rates........ That is wrong. I know they have the same systems and cockpits, but they bring in more revenue and we should be paid for that. And, bringing up SkyWest's fiasco to fly the same rates for up to 99 seats was the biggest labor upset in history. Some people like to bring up the fact that I fly the 757 and the 767 for the same rate at Delta. Well, as true as that is, we brought the 757 rates UP TO THE 767 rates. That is different. We didn't lower the rates from the 767 to the 757 rates. Nope.

Your reasoning sounds like you don't come from a labor backround, rather a management one or a guy working at GEICO. It's all about the number of seats and the airplanes in the same category. The E190 now competes with 737-200s, and almost to the 717 or A318. Yet, it has CRJ 50 rates.


Bye Bye--General Lee

 

[mach zero]

Growth Junkies
ol' Lorenzo and Donn Burr were growth junkies too. Remember the 747? Might have been a white elephant for People's Express, but it had much lower costs per seat mile than the E-190.... and it was a proven airframe without the gremlins that the Brazillian's seem to install as standard equipment.
QUOTE]

I am finally glad there is someone else on this board that echos what I was saying about Embraer's product reliability. In the years I spent flying their equipment, I had more failures, glitches, and lost pay from mtx. cancellations than I did on any of the 7 other types of airliners I have flown.

 

[E170Guppykiller]

I believe most of the U.S. airline industry, cept for you know who, has a negative rating.

You mean UPS?

 

[lowecur]

With your reasoning, we could have the next series, the E192 with 120 seats, and then the E193 with 140 seats, and then the E194 with 160 seats, and then the E196 (I skipped one number) with 180 seats-----and since they are all within 20 seats, they should all have regional rates........ My my, where to draw the line. The problem is there is no line when the pilots have no power. Get the power back, and then you can draw the line. The only way you get the power back is for the airlines to start making money again. Once you get it back be sure to remember how mgt screwed you, and the cycle will start all over again. Isn't it grand? That is wrong. I know they have the same systems and cockpits, but they bring in more revenue and we should be paid for that. I think the rates should be pro-rata from the bottom up. Get the power back and then you can start from the top down again. And, bringing up SkyWest's fiasco to fly the same rates for up to 99 seats was the biggest labor upset in history. So stop blaming Jetblue. Some people like to bring up the fact that I fly the 757 and the 767 for the same rate at Delta. Well, as true as that is, we brought the 757 rates UP TO THE 767 rates. That is different. We didn't lower the rates from the 767 to the 757 rates. Nope.

Your reasoning sounds like you don't come from a labor backround, rather a management one or a guy working at GEICO. My family are all union electricians. They all priced themselves into no work. Look no further than the new CBA in the NHL. Being reasonable has never been part of labor relations throughout the history of mgt and labor.........hence the cycle will continue. It's all about the number of seats and the airplanes in the same category. The E190 now competes with 737-200s, and almost to the 717 or A318. Yet, it has CRJ 50 rates. Next time you talk to a NWA DC9 pilot, ask him why the 10s rates were never priced like an RJ? Quick answer, same series.


Bye Bye--General Lee

Adios! Jimmy.

 

[General Lee]

How about the MD-80 at NW (aquired thru the Republic merger---just like the DC9-10)compared to the DC9-10? Same series, right? It is just a stretched DC-9. And the E190 is a stretched E170. Amazing how I am able to convey my point and always contradict you. Hey, we have 737-700 rates now, and they are less than the 738 rates. Why? Because the 738 is bigger. The E190 is in a larger class, and should have better pay.

And, I suppose we can get the "power" back when management continues to make bad decisions and take their retention bonuses and run..... We are not to blame here. Sure, we had high rates, but they were earned and at the time we got them we deserved them. We were making huge profits back then, and then Leo Mullin made some HUGE mistakes (like the $2 billion stock buy back 2 weeks prior to 9-11, instead of paying off some debt..... Thanks Morgan Stanley and all of you dumba$$ MBAs that helped Leo make that stupid decision), and yet he left with $16 million and credit for a 30 year pension. That SERP program was genius too. Yeah, it was our fault....How about high priced management? Is it wrong to want to make a decent living? What about when management makes the mistakes? It's hard to get the power back when you didn't make the mistakes. Leo thought USAir and United would liquidate, and he also didn't see the LCC thing coming. That must have really been my fault.


Bye Bye--General Lee