ExpWayVis31
Well-known member
- Joined
- Mar 8, 2005
- Posts
- 76
Welcome to Flightinfo.com
- Register now and join the discussion
- Friendliest aviation Ccmmunity on the web
- Modern site for PC's, Phones, Tablets - no 3rd party apps required
- Ask questions, help others, promote aviation
- Share the passion for aviation
- Invite everyone to Flightinfo.com and let's have fun
Plane Business Banter on JBLU
- Thread starter ExpWayVis31
- Start date
- Watchers 7
Welcome to Flightinfo.com
- Register now and join the discussion
- Modern secure site, no 3rd party apps required
- Invite your friends
- Share the passion of aviation
- Friendliest aviation community on the web
General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
- 20,442
B6Busdriver
pushbutton pusher
- Joined
- Mar 1, 2003
- Posts
- 902
I tried to cut and paste it for the General so he would have something to drool on. Looks like they have it set up so you can't cut and paste. I wouldn't pay a nickle for her crapola. Everything is compared to WN but she's not biased. She has a brother who flies for WN but I'm sure that has no influence on her.
lowecur
Well-known member
- Joined
- Sep 14, 2003
- Posts
- 2,317
Here's some parts of it, with my commentsGeneral Lee said:
:But, from a business perspective, what concerned me in 2000 is what concerns me now. Just like a mother hen.
That is, JetBlue is really not structured as a major airline. What she means is it's not like Southwest. Oh, it has major airline status because of its size, but that is not what I am talking about. What I am talking about is the way the airline is structured, route-wise. OK.
I would argue that what JetBlue is, is more of a set of profitable niches. But they really aren't profitable because they didn't hedge enough like SouthWest, they just moved furniture around ie: ticket money. It has the New York/Florida niche, it has its trans-con niches. It continues to add on to both. Now, it hopes to build up its Boston service. But I see that as more or less an add-on to its established New York/Florida business. But the airline doesn't really have what would be called a "national route system." But they are only 5 years old.
There's a reason for that.
It would be more costly. Now you're thinking like the 2 Dave's.
Instead, the airline has taken full advantage of those routes that provide the best return at the lowest CASM. After all, the airline posts a 1,347-mile stage length. Smart.
But here's the problem with this plan of attack. OK. First, revenues are not what they used to be across the board. Hey, it's a sign of the times. Secondly, with JetBlue, the expense side of the equation is now starting to raise its ugly little head just a bit more than it did in the past. All part of the growing process. In fact, the biggest surprise from the last earnings call was the cost guidance.
But back to the operational side. Look at the trend lines for the airline's revenues and its expenses. Unless we have a sharp change in the first quarter it would appear to me that these two lines will probably come very close to crossing, if in fact they don't indeed do so. Well so would SouthWest if you took out investment income.
And, let's face it. Only because of some "furniture moving" did the airline manage to post a profit for the fourth quarter. I mentioned that.
In fact, even though the airline is a "low-cost" airline, look at the airline's debt. The airline's debt level, which is the blue line in the graph below, is inching higher and higher. In fact, the airline now has a higher long-term debt/asset ratio than AMR. It makes sense to gamble with hyper-growth if you expect airline capacity to shrink considerably in the next few years, and you know how to play a smart chess game.
Of course, that lowly green line down there is clearly Southwest, which operates under the assumption that less debt is more. Although note here the subtle uptick we see even here, after years of steady declines. But hey, there's still a big gap between it and the rest of the pack. This was thrown in for effect.
And yes, Northwest Airlines has the highest long term debt/asset ratio.
Another cost item to consider in 2005 will then be the airline's interest expense. Nearly all of the airline's debt carries varible rates of interest. In January the airline said that it was going to have to borrow $800 million in 2005. Have you looked at your credit card interest rates lately? Airlines are no exception. With interest rates rising, borrowed money will be more expensive in 2005. A drop in the bucket if you spread it out over a long term. Did you know that SouthWest has $605M in debt that comes due in 2006?
Okay, so having said all that, what is going to happen when the airline starts to take delivery of its new 100-seat Embraer jets the end of this year? Now you're talking turkey.
I'm not sure. I am.
On the one hand, the argument can be made that the smaller jets will allow the airline to go after those smaller point to point markets it has shunned in the past. The smaller jets will allow the airline to serve these markets more profitably. Now the "US Airways Killer" moniker just might be on target. Yes.
The other thing this will do is it will allow the airline to create more feed into its already established niches. Kind of like Southwest -- only backward. Southwest started with point to point and went long haul. With JetBlue, it started almost exclusively long haul and now intends to use the 100-seaters to set up its point to point network. They'll do a lot of pt to pt, and probably a small percentage of feed.
This part of the story appeals to me. Me too!
What doesn't appeal to me, however, is how the airline is going to continue to do this, while still keeping up such a break-neck growth rate.
The charts tell the story.
While costs continue to rise revenues are turning flat. Just wait till those 190s start increasing the RASM on the shorter routes.
The good side? Labor costs at the airline are the lowest in the industry. Productivity at the airline is exceptional.
However, then there is the other side of the argument.
Why does the airline want to complicate matters by operating two different airline types? It will be called the new airline paradigm at the end of 2007. More costs, more headaches, more training. They laughed at SWA when they were small.
One thing that will help here is the fact that the airline has already set up a "pass-through" plan for its pilots. In other words, there won't be any seniority cat fights here. Or at least there shouldn't be. New hires will begin flying in the right seat of the Embraers, move up to Captain, then make the move to the Airbus right seat, and eventually Airbus Captain.
This of course brings up the issue of unionization.
Last week I talked about the fact that as profit sharing checks drop at WestJet and stock options aren't the perk they used to be, this could be a factor in stepped-up union activity at the airline.
The same could be said here, but unless something starts to turn more negative than what I see now, I don't think it should be a problem. Most pilots I know who fly for the airline seem to be pretty darn happy. They are a swell group.
One thing that I think has improved with the airline is the "humility" factor. As many of you may recall I wrote here in the spring of 2004 that I was hearing some not-so-positive things about the airline and it's "attitude." In addition I had observed first-hand the same problem.You didn't have to look far to see where the problem was coming from. It started at the top with CEO David Neeleman, who can, if he doesn't watch it, come across as quite smug. The combination of being a competitor and having ADD sometimes can do that, but I'm sure his employees like him.
B6Busdriver
pushbutton pusher
- Joined
- Mar 1, 2003
- Posts
- 902
SWA/FO said:
Fair enough. She is a WN cheerleader regardless. My hat is off to you guys and the way your operation is run. I have bought tickets, ridden passes, and jumpseated with you guys many times. My beef goes back to the Burbank thing and her response. The week before when Korean Airlines crashed one it was the picture of the week in her then freebie column. Yet when Southwest ran one off she didn't mention word one, not even acknowledging it happened. We shared some spirited e-mails that I treasure to this day.
General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
- 20,442
Craap Free
But, from a business perspective, what concerned me in 2000 is what concerns me now.
That is, JetBlue is really not structured as a major airline. Oh, it has major airline status because of its size, but that is not what I am talking about. What I am talking about is the way the airline is structured, route-wise.
I would argue that what JetBlue is, is more of a set of profitable niches.It has the New York/Florida niche, it has its trans-con niches. It continues to add on to both. Now, it hopes to build up its Boston service. But I see that as more or less an add-on to its established New York/Florida business. But the airline doesn't really have what would be called a "national route system."
There's a reason for that.
It would be more costly.
Instead, the airline has taken full advantage of those routes that provide the best return at the lowest CASM. After all, the airline posts a 1,347-mile stage length.
But here's the problem with this plan of attack. First, revenues are not what they used to be across the board. Secondly, with JetBlue, the expense side of the equation is now starting to raise its ugly little head just a bit more than it did in the past. In fact, the biggest surprise from the last earnings call was the cost guidance.
But back to the operational side. Look at the trend lines for the airline's revenues and its expenses. Unless we have a sharp change in the first quarter it would appear to me that these two lines will probably come very close to crossing, if in fact they don't indeed do so.
And, let's face it. Only because of some "furniture moving" did the airline manage to post a profit for the fourth quarter.
In fact, even though the airline is a "low-cost" airline, look at the airline's debt. The airline's debt level, which is the blue line in the graph below, is inching higher and higher. In fact, the airline now has a higher long-term debt/asset ratio than AMR.
Of course, that lowly green line down there is clearly Southwest, which operates under the assumption that less debt is more. Although note here the subtle uptick we see even here, after years of steady declines. But hey, there's still a big gap between it and the rest of the pack.
And yes, Northwest Airlines has the highest long term debt/asset ratio.
Another cost item to consider in 2005 will then be the airline's interest expense. Nearly all of the airline's debt carries varible rates of interest. In January the airline said that it was going to have to borrow $800 million in 2005. Have you looked at your credit card interest rates lately? Airlines are no exception. With interest rates rising, borrowed money will be more expensive in 2005.
Okay, so having said all that, what is going to happen when the airline starts to take delivery of its new 100-seat Embraer jets the end of this year?
I'm not sure.
On the one hand, the argument can be made that the smaller jets will allow the airline to go after those smaller point to point markets it has shunned in the past. The smaller jets will allow the airline to serve these markets more profitably. Now the "US Airways Killer" moniker just might be on target.
The other thing this will do is it will allow the airline to create more feed into its already established niches. Kind of like Southwest -- only backward. Southwest started with point to point and went long haul. With JetBlue, it started almost exclusively long haul and now intends to use the 100-seaters to set up its point to point network.
This part of the story appeals to me.
What doesn't appeal to me, however, is how the airline is going to continue to do this, while still keeping up such a break-neck growth rate.
The charts tell the story.
While costs continue to rise revenues are turning flat.
The good side? Labor costs at the airline are the lowest in the industry. Productivity at the airline is exceptional.
However, then there is the other side of the argument.
Why does the airline want to complicate matters by operating two different airline types? More costs, more headaches, more training.
One thing that will help here is the fact that the airline has already set up a "pass-through" plan for its pilots. In other words, there won't be any seniority cat fights here. Or at least there shouldn't be. New hires will begin flying in the right seat of the Embraers, move up to Captain, then make the move to the Airbus right seat, and eventually Airbus Captain.
This of course brings up the issue of unionization.
Last week I talked about the fact that as profit sharing checks drop at WestJet and stock options aren't the perk they used to be, this could be a factor in stepped-up union activity at the airline.
The same could be said here, but unless something starts to turn more negative than what I see now, I don't think it should be a problem. Most pilots I know who fly for the airline seem to be pretty darn happy.
One thing that I think has improved with the airline is the "humility" factor. As many of you may recall I wrote here in the spring of 2004 that I was hearing some not-so-positive things about the airline and it's "attitude." In addition I had observed first-hand the same problem.You didn't have to look far to see where the problem was coming from. It started at the top with CEO David Neeleman, who can, if he doesn't watch it, come across as quite smug.
Stick to selling Afflack
But, from a business perspective, what concerned me in 2000 is what concerns me now.
That is, JetBlue is really not structured as a major airline. Oh, it has major airline status because of its size, but that is not what I am talking about. What I am talking about is the way the airline is structured, route-wise.
I would argue that what JetBlue is, is more of a set of profitable niches.It has the New York/Florida niche, it has its trans-con niches. It continues to add on to both. Now, it hopes to build up its Boston service. But I see that as more or less an add-on to its established New York/Florida business. But the airline doesn't really have what would be called a "national route system."
There's a reason for that.
It would be more costly.
Instead, the airline has taken full advantage of those routes that provide the best return at the lowest CASM. After all, the airline posts a 1,347-mile stage length.
But here's the problem with this plan of attack. First, revenues are not what they used to be across the board. Secondly, with JetBlue, the expense side of the equation is now starting to raise its ugly little head just a bit more than it did in the past. In fact, the biggest surprise from the last earnings call was the cost guidance.
But back to the operational side. Look at the trend lines for the airline's revenues and its expenses. Unless we have a sharp change in the first quarter it would appear to me that these two lines will probably come very close to crossing, if in fact they don't indeed do so.
And, let's face it. Only because of some "furniture moving" did the airline manage to post a profit for the fourth quarter.
In fact, even though the airline is a "low-cost" airline, look at the airline's debt. The airline's debt level, which is the blue line in the graph below, is inching higher and higher. In fact, the airline now has a higher long-term debt/asset ratio than AMR.
Of course, that lowly green line down there is clearly Southwest, which operates under the assumption that less debt is more. Although note here the subtle uptick we see even here, after years of steady declines. But hey, there's still a big gap between it and the rest of the pack.
And yes, Northwest Airlines has the highest long term debt/asset ratio.
Another cost item to consider in 2005 will then be the airline's interest expense. Nearly all of the airline's debt carries varible rates of interest. In January the airline said that it was going to have to borrow $800 million in 2005. Have you looked at your credit card interest rates lately? Airlines are no exception. With interest rates rising, borrowed money will be more expensive in 2005.
Okay, so having said all that, what is going to happen when the airline starts to take delivery of its new 100-seat Embraer jets the end of this year?
I'm not sure.
On the one hand, the argument can be made that the smaller jets will allow the airline to go after those smaller point to point markets it has shunned in the past. The smaller jets will allow the airline to serve these markets more profitably. Now the "US Airways Killer" moniker just might be on target.
The other thing this will do is it will allow the airline to create more feed into its already established niches. Kind of like Southwest -- only backward. Southwest started with point to point and went long haul. With JetBlue, it started almost exclusively long haul and now intends to use the 100-seaters to set up its point to point network.
This part of the story appeals to me.
What doesn't appeal to me, however, is how the airline is going to continue to do this, while still keeping up such a break-neck growth rate.
The charts tell the story.
While costs continue to rise revenues are turning flat.
The good side? Labor costs at the airline are the lowest in the industry. Productivity at the airline is exceptional.
However, then there is the other side of the argument.
Why does the airline want to complicate matters by operating two different airline types? More costs, more headaches, more training.
One thing that will help here is the fact that the airline has already set up a "pass-through" plan for its pilots. In other words, there won't be any seniority cat fights here. Or at least there shouldn't be. New hires will begin flying in the right seat of the Embraers, move up to Captain, then make the move to the Airbus right seat, and eventually Airbus Captain.
This of course brings up the issue of unionization.
Last week I talked about the fact that as profit sharing checks drop at WestJet and stock options aren't the perk they used to be, this could be a factor in stepped-up union activity at the airline.
The same could be said here, but unless something starts to turn more negative than what I see now, I don't think it should be a problem. Most pilots I know who fly for the airline seem to be pretty darn happy.
One thing that I think has improved with the airline is the "humility" factor. As many of you may recall I wrote here in the spring of 2004 that I was hearing some not-so-positive things about the airline and it's "attitude." In addition I had observed first-hand the same problem.You didn't have to look far to see where the problem was coming from. It started at the top with CEO David Neeleman, who can, if he doesn't watch it, come across as quite smug.
Stick to selling Afflack
michael707767
Well-known member
- Joined
- Sep 20, 2002
- Posts
- 1,640
stillflyn
Well-known member
- Joined
- Oct 27, 2004
- Posts
- 228
Dogwood
Well-known member
- Joined
- Jan 14, 2005
- Posts
- 346
According to Al Spain when I was up there in Jan., new hires will have a choice of the 190 or the Bus. Because of a 2 yr freeze, the F/O will be able to go to the left seat when a position is available, without someone coming in on top of them.
There is a bid coming up soon that also fits into the equation, and will determine which of the current crewmembers will be part of the process.
So, some of what Holly says is true, but I doubt a 190 Capt will go to the bus F/O position. They'll just stay there until they can hold Bus Capt in 2 1/2+ years.
There is a bid coming up soon that also fits into the equation, and will determine which of the current crewmembers will be part of the process.
So, some of what Holly says is true, but I doubt a 190 Capt will go to the bus F/O position. They'll just stay there until they can hold Bus Capt in 2 1/2+ years.
stillflyn said:
Share this page
Latest posts
-
-
Connecting Jump Pack to EarthX Battery
- Latest: Cactus Charlie
-
Latest resources
-
-
-
-
-
AC 90-89C - Amateur-Built Aircraft and Ultralight Flight Testing HandbookAmateur-Built Aircraft and Ultralight Flight Testing Handbook
- Neal
- Updated:
