The Mood at Jet Blue

[shon7]

For all the B6 insiders -- is there a doom and gloom atmosphere and an urgeny to address the business model -- or has the leadership come out and addressed the performance and solution.

I have been flying you guys quite often now and overall it seems like business as usual.

 

[Blue Dude]

Any urgency is at HQ. We're already doing all we can. It's up to the planners to get more revenue (primarily through better route and capacity planning) and mitigate fuel cost. So for the most part, I'd say it's business as usual. We're certainly not being made to feel as though we didn't do our part. No feeling of "save those pennies, or else!" or that our salaries are going to be on the chopping block. It's a management issue, no more, no less, and everyone knows it. The rank and file is by and large unaffected.

 

[Eagleflip]

I agree...While there has certainly been a general sense of "reality" around the crew room since last year's financial statement was issued, there are no overt or covert signs of pressure on the flight ops group. Fortunately, both Dave's communicated our financial position well in the closintg months of the year (open within the limits set by the gov'mint, naturally! ), so most of our folks were ready for the brutal truth when it officially came out.

There are, naturally, several areas that need improvement, and it seems that progress is being made on some of them.

And a bit of progress is far better than none at all.

To answer your question directly, I think the mood is close to the same as we had a few months ago.

 

[wndshr]

For all the B6 insiders -- is there a doom and gloom atmosphere and an urgeny to address the business model -- or has the leadership come out and addressed the performance and solution.

I have been flying you guys quite often now and overall it seems like business as usual.

YES there is a doom and gloom panic at B6...I know at least 8 people that have put their resumes in with UAL, DAL and NWA. 3 have already been hired ever since hearing the shocking news!!!!

 

[Dizel8]

I think the mood in general is pretty good. We knew about the loss as Eagle said, so really wasn't a surprise.

The employees are doing what they can, so it really has to do with management and more importantly, the economy and in particular oilprices.
Of course, we all wished we had great hedges like SWA and management could probably have done more in that area, but that really is beyond my expertise.

There are issues, as there always are, but they are being addressed and the company is pretty open to suggestions.

As for the stock, needless to say, all wished it was trading higher, but it is what it is. Personally I found it crazy that it went to 70+ that quickly and I think it is undervalued now, but it is the street running that show.

The 190 has issues, but then, so do all new planes. Dispatch rate is going up and in time it will be a good airplane.

Terminal 6 is at capcity, or very close thereto, so it will be nice when the new one opens.

There has been a decrease in load factor, but that may very well be due to the company putting too much lift in certain markets, hence why they want to open new markets. The 190 is a great airplane for that, as long as the issues get resolved.

I can of course only speak for myself, but I am certain that jetblue will continue to be a great place to work and all in all, wouldn't want to be any place else at the moment.

 

[coogebeachhotel]

Uppercrust? Where is the flame? Mommy has not let you out of the crib yet?

 

[ATR-DRIVR]

Uppercrust? Where is the flame? Mommy has not let you out of the crib yet?

Don't forget 'dave'! Before this gets to 10 post's I'll bet he'll jump right on in.
sigh

 

[G4G5]

On Tuesday, Morgan Stanley downgraded the stock to underweight from equal weight and now forecasts a loss of 56 cents a share this year, instead of a 2 cent profit. The airline should be profitable in 2007, according to Morgan Stanley.

Today's Barrons came out with an article if someone has access could they please post it.

 

[AA717driver]

Uppercrust? Where is the flame? Mommy has not let you out of the crib yet?

It's a school day. He should be posting around 3:30 p.m. or whenever the short bus drops him off.TC

P.S.--Awsome avatars cooge!

 

[zonker]

Barron's Article

================================



JetBlue Won't Be in the Black Until 2007

JetBlue Airways Corp. (JBLU: Nasdaq)
By Morgan Stanley ($11.07, Feb. 7, 2006)​

WE ARE DOWNGRADING OUR RATING on JetBlue to Underweight from Equal-Weight and reducing our estimate for fiscal year 2006 to a loss of 56 cents per share, down from earnings of two cents a share. Our estimate for fiscal 2007 is for earnings of one cent a share.

The revenue environment in the U.S. is generally positive, with declining capacity in many markets pushing fares up; however, capacity in certain key JetBlue markets is increasing as competitors add new flights with larger aircraft. Thus, we estimate that JetBlue's revenue performance will lag the industry in 2006 and at least early 2007. With nonfuel expenses rising materially, we believe that the company faces major headwinds into 2007.
JetBlue reported a 2005 fourth-quarter loss of 19 cents share (excluding items), missing consensus and our estimate for a loss of 14 cents a share. The company also released guidance that it would report a loss in 2006, the first annual loss since the company's initial public offering. JetBlue faces more challenging market conditions than many of its competitors, we believe, with revenue challenges in its Florida markets (equal to 35% to 40% of capacity), as well as expense pressures from the introduction of a new aircraft type, rising airport costs and increasing maintenance expenses as its aircraft fleet ages.
The competitive environment in 2006 in JetBlue remarkets will be daunting, with large amounts of capacity being added in key JetBlue markets. Continental's addition of Boeing 757-300s (the largest single-aisle commercial aircraft and one with low operating costs) on key Florida routes will pressure JetBlue; not everyone will consider Newark as an alternative to JFK International Airport, but enough may, which would affect JetBlue's large JFK operations, in addition to its smaller Newark operations.
We will continue to monitor Continental's competitive response to JetBlue -- a significant change in Continental's Florida capacity would cause us to re-examine our Underweight rating on JetBlue.

--Douglas Runte, CFA
--Jeremy A Falk
--Jay Bharadwa​

 

[radarlove]

There are issues, as there always are, but they are being addressed and the company is pretty open to suggestions.

Pretty much every company is "open to suggestions." The real question is, what happens to the best suggestions? Do they get acted upon?

Something to ponder.

 

[AlbieF15]

When FedEx bought Tigers back in 89 get access to China, everyone said Fred Smith overpaid. Now they lionize him as a genius and make him a CEO poster child. They again complained "kinkos hasn't been successful...." after less than 2 years of data points after the buyout. Back in 1998 I "overbought" a house down here in Florida--paid more than the norm for an active duty captain, and a few years later bought a rental that is still NOT cash flow positive. Common thread to all these is the financial timeline wasn't based on next quarter, or next year, but years down the road.

I think Jetblue is looking at a 5-10 year timeline to get where they want to be. There will be some rough quarters as expenses pop up and investments in aircraft, infrastructure, and training have to be absorbed. However, like Airtran, the company offers a superior product that generally is better than the competitions when measured head to head (who said head?). Neelemen is both conservative in his estimates and aggressive in his plans, and I think anyone who rides out a few rough quarters as an employee (sorry--crewmember) is going to be in good shape a few years down the road. Stockholders, on the other hand, have a lot more dynamics to deal with--and while those guys who bought AA two years ago at 3-6 bucks look like geniuses, I think the track record for airline investors says you are better off taking the money to Vegas and hitting the tables.

 

[Dave Siegel]

Don't forget 'dave'! Before this gets to 10 post's I'll bet he'll jump right on in.
sigh

Hi, it's Dave!

Looks like you were wrong, ATR-DRIVR. 10 posts, and I stayed silent, but I knew it would break your little heart not to hear from me.

ALBIE F15 said:

"I think Jetblue is looking at a 5-10 year timeline to get where they want to be. There will be some rough quarters as expenses pop up and investments in aircraft, infrastructure, and training have to be absorbed. However, like Airtran, the company offers a superior product that generally is better than the competitions when measured head to head (who said head?). "


Albie's right. JetBlue is looking at a 5-10 year plan, to go out of business. Since I'm always known for my optimism, I give them 10.

Saying that AirTran and JetBlue offer superior products is truly entertaining. AirTran is like WalMart, and JetBlue is also WalMart, but the Smurfs want everyone to think they're Sax Fifth Avenue. Well, blue kool-aid drinkers, maybe if you say it enough people will believe you. I doubt it, but then again, I am smarter than all of you, except of course, the great Mr. Lorenzo.

 

[Uppercrust]

Uppercrust? Where is the flame? Mommy has not let you out of the crib yet?

Sorry I've had a busy week but will be back in force on Monday!

 

[stonewall]

Hi, it's Dave!

Looks like you were wrong, ATR-DRIVR. 10 posts, and I stayed silent, but I knew it would break your little heart not to hear from me.

ALBIE F15 said:

"I think Jetblue is looking at a 5-10 year timeline to get where they want to be. There will be some rough quarters as expenses pop up and investments in aircraft, infrastructure, and training have to be absorbed. However, like Airtran, the company offers a superior product that generally is better than the competitions when measured head to head (who said head?). "


Albie's right. JetBlue is looking at a 5-10 year plan, to go out of business. Since I'm always known for my optimism, I give them 10.

Saying that AirTran and JetBlue offer superior products is truly entertaining. AirTran is like WalMart, and JetBlue is also WalMart, but the Smurfs want everyone to think they're Sax Fifth Avenue. Well, blue kool-aid drinkers, maybe if you say it enough people will believe you. I doubt it, but then again, I am smarter than all of you, except of course, the great Mr. Lorenzo.

I guess there is a difference between offering a "superior" product for the employees and the customers. Say what you will about the management, but I've had nothing but good experiences on Airtran and JB. I'd even say excellent service all around. Same with Continental. Based on just from my perspective as a commuter, I'd say it's 1) Continental 2) JB 3) Airtran 4) SWA 5) NWA

Unlike you, I hope none of them go under. Alot of my buds would be out of jobs.

 

[Dave Siegel]

Unlike you, I hope none of them go under. Alot of my buds would be out of jobs.

Hi, it's Dave again. Magnum makes assumptions again. I never said that I WANTED JetBlue to go out of business, I simply predicted that they WILL be out of business in 10 years. Many of my good friends are at JetBlue, and although they do not possess the intellect that I, as management, have earned through attaining an MBA, I still have no problem with them taking my clothes to the cleaners, delivering my newspaper, or walking my dogs.

Magnum, you are a very nasty person, and you shouldn't judge people so quickly next time.

 

[Marko Ramius]

WADR so what????

However, like Airtran, the company offers a superior product that generally is better than the competitions when measured head to head (who said head?). quote]

This is business and in the end has little to do with the superiority of a given product but the effectiveness of the system involved. JetBlue offers a better product, but Airtran has consistently shown it has a better, albeit less glamoruous system. A comparison of the offering(s) of LCC's and major carriers generally finds WN lacking amenties wise, but their system is far more effective than the aforementioned carriers overall. Their fuel hedges have helped this point for sure, but they are clearly aware of that and working on fixes to the system. It's like Wendy's; sure they make a better burger/fry than McDondald's (imo) but they can't move it thru their system as effectively. This is the difference between Song and Ted. Song was/is a creative attempt to change and redifine the product and experience they give the customer. Ted is a different system to process UA's lower fare customer segment effectively. The overwhelming views of the ted product vs. Song, JetBlue, etc are rightfully subpar yet it continues along with full a/c like WN because the system is producing it's desired resutls. We as pilots continually focus on things that have nothing to do whether an airline works or not just what we personally feel is important-remember FlyI consistently received high pax/reviewer raves.

 

[GogglesPisano]

It's like Wendy's; sure they make a better burger/fry than McDondald's (imo) but they can't move it thru their system as effectively. .

It doesn't move through my system effectively either.

 

[screwed_again]

YES there is a doom and gloom panic at B6...I know at least 8 people that have put their resumes in with UAL, DAL and NWA. 3 have already been hired ever since hearing the shocking news!!!!

Yeah, cause the majors are hiring now????????????????????

 

[roadrunnerblue]

Yeah, cause the majors are hiring now????????????????????

And so we can expect a pay raise next (like in 2001)?