Neeleman Brags

[lowecur]

Never let it be said that most CEO's don't have an ego. I know Neeleman is pragmatic to the enth degree, so some of his statements may seem boastful but he is stating the facts as he believes them. Here are some of my favorite quotes and thoughts from this article:

• "At $60 oil, or $80 oil, or whatever way you want to look at it -- it could go higher than this -- we think we can continue to make a profit," he said. "Our competitors can't."

• "Either way, we'll get there because our model works under these environments, and it's not working for some of our competitors," he said at his office at JetBlue's headquarters near its hub airport, John F. Kennedy International in New York. "What we're seeing in the market is not sustainable."

• Neeleman said the airline he founded needs to add $10 to the price of a one-way ticket to offset each $20 increase in the price of a barrel of oil

• Neeleman said he is confident the airline can eventually boost its margin because oil prices will either decline or will rise so much that JetBlue's loss-plagued rivals like Delta Air Lines Inc. will be driven out of business.

• "The 190's going to change things," he said. "It's going to change the rules of the game a lot."

Are you listening there Herb?

http://biz.yahoo.com/rb/050708/airlines_jetblue.html?.v=1

 

[enigma]

• "The 190's going to change things," he said. "It's going to change the rules of the game a lot."

Come on, admit it. You added this one, didn't you?




enigma

 

[On Your Six]

Never let it be said that most CEO's don't have an ego. I know Neeleman is pragmatic to the enth degree, so some of his statements may seem boastful but he is stating the facts as he believes them. Here are some of my favorite quotes and thoughts from this article:

• "At $60 oil, or $80 oil, or whatever way you want to look at it -- it could go higher than this -- we think we can continue to make a profit," he said. "Our competitors can't."

• "Either way, we'll get there because our model works under these environments, and it's not working for some of our competitors," he said at his office at JetBlue's headquarters near its hub airport, John F. Kennedy International in New York. "What we're seeing in the market is not sustainable."

• Neeleman said the airline he founded needs to add $10 to the price of a one-way ticket to offset each $20 increase in the price of a barrel of oil

• Neeleman said he is confident the airline can eventually boost its margin because oil prices will either decline or will rise so much that JetBlue's loss-plagued rivals like Delta Air Lines Inc. will be driven out of business.

• "The 190's going to change things," he said. "It's going to change the rules of the game a lot."

Are you listening there Herb?

http://biz.yahoo.com/rb/050708/airlines_jetblue.html?.v=1

Yeah, and didn't he and Mike Boyd think that UAL would be liquidated three years ago? I guess fast-growing SWA or AirTran aren't considered rivals in this case...

 

[EagleRJ]

He's right that the 190s are going to change the rules of the game.

By taking on a second aircraft type, he's broken the formula that is a large part of Southwest's success. Now he's got twice the maintenance training and tooling, twice the spare parts, twice the pilot training expense, aircraft routing concerns, cross-type crew bidding, etc. The fact that it's a brand new series that has so far shown spotty reliability doesn't help either.

Doing this at the same time that the Airbus debt is becoming due is a big gamble. I doubt if JB's profit will look the same in the next few years as it has in the past three.

 

[buttercup]

He is a proud man with a great company he has a right to speak of the fruits of his and his employees' labor.. However, with that being said while everyone was hanging onto JBLU stock hoping for miracles, I took advantage of the fuel situation by more than tripling my money on SWN and double my money on PTEN since last September.. ANd it has only just begun..

 

[elag777]

He's right that the 190s are going to change the rules of the game.

By taking on a second aircraft type, he's broken the formula that is a large part of Southwest's success. Now he's got twice the maintenance training and tooling, twice the spare parts, twice the pilot training expense, aircraft routing concerns, cross-type crew bidding, etc. The fact that it's a brand new series that has so far shown spotty reliability doesn't help either.

Doing this at the same time that the Airbus debt is becoming due is a big gamble. I doubt if JB's profit will look the same in the next few years as it has in the past three.

You must of forgotton that the busses are free till 2050, and the 190's are a gift from the Govt. of South America? and everyone is getting a free type...

 

[Mr Hat]

Thats right, Jetblue doesn't pay for airplanes as long as their pilots clean the cabin!
Just kidding guys...I laugh every time someone points that out.

Though the free type is probably true, most airliner manufacturers will give a certain amount of training for free as part of the purchase price of an airplane.



(PS- I help the FA too)

 

[lowecur]

He is a proud man with a great company he has a right to speak of the fruits of his and his employees' labor.. However, with that being said while everyone was hanging onto JBLU stock hoping for miracles, I took advantage of the fuel situation by more than tripling my money on SWN and double my money on PTEN since last September.. ANd it has only just begun..

SWN is really SouthWest North, or Jetblue. Now tell me about your losses?

 

[ualdriver]

The EMB190 will change things

I agree with Neeleman that the EMB190 will change things, but I think it will largely because of the labor costs associated with operating this 100 seat jet. When JetBlue's labor is 29% (i.e. a SIGNIFICANT portion) of your costs as they are with any airline, and the most expensive portion of your labor bill at your airline (i.e. pilots) are flying this 100 seat jet as cheaply as they are, those kind of savings are a HUGE contribution to the bottom line. You have to keep in mind that the combined total of the cockpit crew for a 5 year seniority Captain and Copilot in a JetBlue EMB190 is about what JUST a 737 Captain makes at UAL, and our payrates are horrible! Comparing those payrates to a more direct competitor, like Delta, makes the numbers look even better for JetBlue. And it won't be 5 year seniority airline crews flying this jet at JetBlue, so it will actually be less! When you are brilliant enough to convince your workers to fly for those kind of rates (and get them to feel lucky and happy about it) then you are going to make money hand over fist! Neeleman is a very, very smart man.

 

[GuppyPuppy]

When you are brilliant enough to convince your workers to fly for those kind of rates (and get them to feel lucky and happy about it) then you are going to make money hand over fist! Neeleman is a very, very smart man.

Who says we are happy about it?

I do feel lucky to have a job at a growing company. Especially since UAL and some sand people f-ed up my career a couple of years ago.

GP

 

[FlyBoeingJets]

Neeleman said he is confident the airline can eventually boost its margin because oil prices will either decline or will rise so much that JetBlue's loss-plagued rivals like Delta Air Lines Inc. will be driven out of business.


"The 190's going to change things," he said. "It's going to change the rules of the game a lot."

So is Neeleman also confident that the stock market will either decline or rise?? That also has nothing to do with JetBlue's margins.

JetBlue Boosting margins will not be due to oil but the health of their competitors.

The only reason the 190 will change things is because, right now, the other carriers are unwilling to pose a challenge. It is a brilliant idea to offer starving pilots a chance at a job where they can eventually be an A-320 Captain making 130K a year. The promise is a fairly quick upgrade for low wages today. Very slick.

If someone else manages to get into the 100 seat fight the future will be different than Neeleman sees it. Right now I'm betting on Neeleman moderate success, but I don't count others out. Neeleman may get blind sided in a few years.

 

[buttercup]

SWN is really SouthWest North, or Jetblue. Now tell me about your losses?

SWN is Southwestern Energy Corporation.. I would never invest in airline stocks ..never.. My gains far exceed my losses, it's all about money management.. I let my winners ride, and the losses I get out with at a 3-4 percent loss and move on to the next equity. JBLU is a good stock to scalp and swing trade. It's intrinsic value is about 6 bucks a share, thus not good for buy and hold!! SWA and JBLU are definetly best of breed, but there's a reason why Warren Buffett doesnt touch airlines, and why George Soros sold a big portion of his JBLU stock a while back!! Watch for a consolidation in the energy sector for the next month or so and then come September load the boat on energy stocks.. You wont be sorry!!

 

[lowecur]

So is Neeleman also confident that the stock market will either decline or rise?? That also has nothing to do with JetBlue's margins.

JetBlue Boosting margins will not be due to oil but the health of their competitors.

The only reason the 190 will change things is because, right now, the other carriers are unwilling to pose a challenge. It is a brilliant idea to offer starving pilots a chance at a job where they can eventually be an A-320 Captain making 130K a year. The promise is a fairly quick upgrade for low wages today. Very slick.

If someone else manages to get into the 100 seat fight the future will be different than Neeleman sees it. Right now I'm betting on Neeleman moderate success, but I don't count others out. Neeleman may get blind sided in a few years.

Jetblue had to pay what they did in order to compete with the RJETs and other regionals that will be flying E-jets for Legacys. I think they planned to pay the pilots more, but once some of the regionals locked in their contracts, they had no choice.

You're not giving the ergonomics and IFE enough credit. The pax are going to want to fly the 190 more than the 320, once you get enough of them in the air. Again, another marketing coup for Jetblue, as they distinguish themselves from SWA and other LCCs.

 

[oldxfr8dog]

Doing this at the same time that the Airbus debt is becoming due is a big gamble. I doubt if JB's profit will look the same in the next few years as it has in the past three.

OK, good one!
You had me for a minute until you added that!

 

[lowecur]

SWN is Southwestern Energy Corporation.. I would never invest in airline stocks ..never.. My gains far exceed my losses, it's all about money management.. I let my winners ride, and the losses I get out with at a 3-4 percent loss and move on to the next equity. JBLU is a good stock to scalp and swing trade. It's intrinsic value is about 6 bucks a share, thus not good for buy and hold!! SWA and JBLU are definetly best of breed, but there's a reason why Warren Buffett doesnt touch airlines, and why George Soros sold a big portion of his JBLU stock a while back!! Watch for a consolidation in the energy sector for the next month or so and then come September load the boat on energy stocks.. You wont be sorry!!

I have made a few bucks trading AWA, AAI, and FRNT over the past few years, but none of them are long term holds. I am well diversified with no more than 10% of my portfolio in any one area. I'm looking to put some $$$ in the Hong Kong market in the next few years. I will probably get a mutual fund since my knowledge is weak on the Far East, but it's a better play than China(too much speculation).

Energy is like the dot.com stocks a few years ago. Lots of money to be made while the momentum lasts, but if the world economy takes a dump you'd better be out before the bottom falls.

 

[On Your Six]

Jetblue had to pay what they did in order to compete with the RJETs and other regionals that will be flying E-jets for Legacys. I think they planned to pay the pilots more, but once some of the regionals locked in their contracts, they had no choice.

You're not giving the ergonomics and IFE enough credit. The pax are going to want to fly the 190 more than the 320, once you get enough of them in the air. Again, another marketing coup for Jetblue, as they distinguish themselves from SWA and other LCCs.

I think we all agree that SONG has better IFE and more comforatable leather seats (plus good food). Now, if SONG/Delta could only get off its arse and order some 100 seaters itself.... But I guess Delta pilots' unwillingness to get paid the lowest wages in the business wouldn't make the 100 seaters operationally competitive... Whoops!

 

[lowecur]

I think we all agree that SONG has better IFE...I do like Song's larger screens, but Jetblue's are fine..... and more comforatable leather seats.... 2X2 seating in the 190 leather seats will be just as comfortable and more passenger friendly getting to and from the isles.... (plus good food). Now, if SONG/Delta could only get off its arse and order some 100 seaters itself.... But I guess Delta pilots' unwillingness to get paid the lowest wages in the business wouldn't make the 100 seaters operationally competitive... Whoops!

Delta will need to get their act together in Chapt 11(sometime in Oct). They may jettison ASA/CMR(I think they have already written off the investment), and go strictly with RJET, and maybe turn the Song logo over to them and their E-jets. Just as with UAIR, under pressure that the courts will decide a new contract in Chapt 11, the pilots will have to give in and let RJET fly the 190/195. The 757's are too large and less versatile to compete with Jetblue.

 

[Brown Cow]

Interesting discussion.

Heard some things the other day about JB and Song. Apparantly JB has FA's training for some oceanic flying, ie. Dublin and Shannon. With a full 320 you would really be stretching one stop. So what gives? It's probably not really true, but the 330 rumor has been going around for some time now. If this is the case, then the 190's will be the least of the problems.......3 airplanes, whewwww!

Consequently, Song is allegedly looking at getting 180 etops which for the 75 will be pretty easy. This, in order to start flying to Europe.

Yay or nay?

 

[furlough-boy]

Probably for the Dominican Republic and Puerto Rico destinations.

Interesting discussion.

Heard some things the other day about JB and Song. Apparantly JB has FA's training for some oceanic flying, ie. Dublin and Shannon. With a full 320 you would really be stretching one stop. So what gives? It's probably not really true, but the 330 rumor has been going around for some time now. If this is the case, then the 190's will be the least of the problems.......3 airplanes, whewwww!

Consequently, Song is allegedly looking at getting 180 etops which for the 75 will be pretty easy. This, in order to start flying to Europe.

Yay or nay?

 

[buttercup]

I have made a few bucks trading AWA, AAI, and FRNT over the past few years, but none of them are long term holds. I am well diversified with no more than 10% of my portfolio in any one area. I'm looking to put some $$$ in the Hong Kong market in the next few years. I will probably get a mutual fund since my knowledge is weak on the Far East, but it's a better play than China(too much speculation).

Energy is like the dot.com stocks a few years ago. Lots of money to be made while the momentum lasts, but if the world economy takes a dump you'd better be out before the bottom falls.

LowCur mutual funds are the biggest scams going in the equities market.. A good friend that I grew up with is a hedge fund manager and you wouldnt believe how bad people get fuc*ed with them.. You're better off buying shares of Berkshire B stock... Warren runs Berk Hath essentially like it's a big mutual fund.. He's always buying selling stock and buying selling companies under the Berkshire Hathaway umbrella.. He goes where the money is.. He's recently bought energy, and has a bunch of China Petro so as well... You can bet he'll be buying more China and Hong Kong too.. Most mutual funds have taxes and fees associated with them in addition to what you have to give Uncle Sam.. If you buy Berk B you only have to pay 15% cap gains tax if held more than a year.. Good luck to you, take all that you can from the market and GIVE NOTHING BACK TO IT!!

 

[Filkster]

"It is a brilliant idea to offer starving pilots a chance at a job where they can eventually be an A-320 Captain making 130K a year. The promise is a fairly quick upgrade for low wages today. Very slick. "

I thought you were talking about MESA there for a minute!!!!!!

RF

 

[Dogwood]

By taking on a second aircraft type, he's broken the formula that is a large part of Southwest's success.

Your view of fleet types is very shallow. If you think that Southwest has only one, think again. And if you think that one airplane was a large part of Southwest's success, think again. It was a very small part. Their success was due to smart management, brand loyalty, a good product, and continued good marketing. Some very successful international airlines have several types.

The varied versions of 737s on the property is equal to 2 fleet types. Sure they save some on training, but that's about it. The parts vary quite a bit on the -300 vs. the -700.

Sure I think you have to keep it under control, but adding a new plane, is certainly not a cause for concern. SW is just so strong they can get away with it at this point.

I hope we never make any decisions, "Just because Southwest does it that way". They are a good company, and we watch them closely, but we try to think for ourselves.

DW (JB FO)

 

[michael707767]

I think we all agree that SONG has better IFE and more comforatable leather seats (plus good food). Now, if SONG/Delta could only get off its arse and order some 100 seaters itself.... But I guess Delta pilots' unwillingness to get paid the lowest wages in the business wouldn't make the 100 seaters operationally competitive... Whoops!

do you think the DAL pilots are in any postition to negotiate much better than what JB is paying for a 100 seater? If you do, you are kidding yourself. The DAL pilots are not the reason for no new 100 seaters at DAL. Money is the reason. We would fly them for a competitive rate if/when Delta can get em.

 

[BluDevAv8r]

Doing this at the same time that the Airbus debt is becoming due is a big gamble. I doubt if JB's profit will look the same in the next few years as it has in the past three.

Now I am not an accountant but....

Whether or not the first part of the sentence is true (or not), you do realize that debt payments (absent interest expense) does not have an effect on the income statement and thus, earnings, right? Now...if the aircraft are leased (versus paid for with debt), totally different story. But remember, earnings (or profit) = revenue minus expenses, and debt payments aren't an expense (except for the interest on those debt payments). And furthermore, positive earnings are great and all but cash flow is what rules in this game and cash flow isn't reported on the income statement.

-Neal

 

[Mr.B]

Don't like airline stocks? Try;

WLDA

52 wk high/low $13.19/$2.56

 

[ivauir]

Your view of fleet types is very shallow. If you think that Southwest has only one, think again. And if you think that one airplane was a large part of Southwest's success, think again. It was a very small part. Their success was due to smart management, brand loyalty, a good product, and continued good marketing. Some very successful international airlines have several types.

The varied versions of 737s on the property is equal to 2 fleet types. Sure they save some on training, but that's about it. The parts vary quite a bit on the -300 vs. the -700.

Your view of fleet types is in error. We do operate one type, there are significant differences with the -700 and lots of unique parts, but the comonality goes way beyond pilot training and the advantages this provides are huge. I do agree with you that smart management is perhaps THE over riding factor in our success, but one of those smart management desicions was to operate one aircraft type. From the dispatchers to the rampers this fleet comonaltiy simplifies our jobs. When there are challenges to operations it simplifies every aspect of reroutes and changes. We always have the right crews, we always have the right ramp equipment, and we always have the right number of seats (Ok there are 20 some odd 500s, but they are on routes with such high frequency that it doesn't matter).

Saying that "The varied versions of 737s on the property is equal to 2 fleet types" is more than a little stretch ... it is just not true.

 

[B6Driver]

All of this can be put to rest at the end of this month when JetBlue reports 2 qtr. results (profits). 3rd and 4th qtr. results will just have to wait.
I can't wait to see the results of the legacy carriers to see if the corner was turned or if they're still in a free fall position. $60+/barrel oil tells me quite a bit about what to expect. Dave N. gets to see the books and trend data and is in the position to make such claims; are you?

 

[michael707767]

Dave N. gets to see the books and trend data and is in the position to make such claims; are you?

Yes he does. On the other hand, he could be trying to pump up the stock price one last time before another aircraft type drives the airline into the ground.

 

[B6Driver]

If it was bad for the company, why would he allow the acft to ever show up on the property? He's not stupid like the rest of the legacy CEO's.
Come to think of it, I should not of even answered your post. Yours made no sence.
Just sit and wait to see how things turn out for JB. It is possible that this acft may not work as well as planned. Then again, if it works as well as expected, profits will be amazing.

 

[skykid]

Yours made no sence.

That says it all!