jaguar

JetBlue's string of 18 consecutive quarterly profits since its inception "is in jeopardy" as concern about Hurricane Rita boosts oil prices, CEO David Neeleman said yesterday."Probably Rita is going to put the final nail in this quarter,"

In this year's second quarter, JetBlue's profit fell 43% to $12.2 million, or 11 cents a share, as spending for jet fuel almost doubled. It was JetBlue's sixth straight decline in quarterly profit.

FWAAA

I don't think B6 has been profitable every quarter of its existence - I think it has been profitable every quarter since it went public, but I may be mistaken.

B6 began operations in Feb 2000, and went public early in 2002. It reported a net loss for the years ended 1999 (pre-flying) and 2000 (first year of flying). It was profitable for the year ended 2001, including the third quarter (which was a rare feat, shared with WN and very few others).

Here's an article about the impending loss:

http://yahoo.reuters.com/financeQuot...0402618_newsml

JetBlue's inability to charge passengers enough to cover its extremely low costs is very telling - it isn't fuel prices - it is overcapacity (and the low yields that overcapacity causes) that's killing airlines.

ByrdluvsAWACO

I'm no B6 Blue Kool-Aid drinker, but I disagree. B6 doesn't seem to have a problem with overcapacity either. It sounds more like the Katrina/Rita duo just caught them off guard. Who could have predicted two catagory 4 hurricaines hitting the gulf in such a short period of time.

prhs1989

It isn't the yields that are causing jetblue problems. No business model is prepared for gas to hit $70 a barrel. When Southwest's hedging comes to an end (I believe next year) and if gas doesn't come down, they will be in the same boat as everyone else.

L Dude 7

And I'm sure this little incident at LAX will probably not do much to add to their bottom line. But it could be a great time to really show how good their customer service is.

jaguar

I disagree. They got national coverage all evening and showed what a first class operation they are.

CO FF

I don't want to debate the impact of today on the economics -- but would the OP or Moderator please change the thread title? B6 set for "first loss" sounds like a bad prediction of the outcome of B6 292.

L Dude 7

Well, the outcome of 292 was clearly not a loss. Though it does create an interesting irony that he come out with that right before the incident. Maybe the planes don't like talks of loss.

There is another issue of accuracy. "First lost after string of profits" may be more accurate.

As for the impact of LAX, B6 has not had much of a problem filling their planes. LAX may give them more publicity, but even positive publicity would likely not register until next quarter. On the other hand, compensation, aircraft repair, etc. will all create costs that are needed now.

FWAAA

I think you'll hear the airline execs disagree with you in the coming weeks. Yields are just too low, even at B6 and WN.

Oh, and about those fuel hedges coming to an end next year - not quite. Here's WN's explanation of their current hedging positions:

http://phx.corporate-ir.net/phoenix....041&highlight=

Southwest's fuel cost advantage gets smaller next year (and each year thereafter), yet WN will have an enourmous cost advantage thru 2009 unless oil falls to $25/bbl in the next couple of years.

prhs1989

I would have to disagree about the yields. As low as the yields are, you can still pull proftis with them. Have you seen Southwest's Monthly load factors. I think their last quarter (or month) was somewhere in the 60% range, and yet they are still putting out profits. Fuel is just to much of a detriment to be able to sustain profits. And, now, with more fuel refineries temporarilly shutting down on the account of the hurricanes, it will be even more difficult for any airline (Except if you are bankrupt, which then you get a free ride) to stay in the black.

FWAAA

We'll have to agree to disagree.

In my simplistic view, when you post a loss, you either need to cut costs or increase revenue. And in the case of B6, only an idiot would suggest cost-cutting, since its non-fuel costs are already about as low as they can go while running an airline.

It's one thing to tell bloated legacy carriers that they need to cut expenses - but it's lunacy to tell WN or B6 to cut costs. Those airlines need to increase unit revenue.

And unit revenue will rise when capacity falls.

guynyc

LOL maybe it should be investigated just to make sure it was an accident, and all in all why it is happening across airlines... and why for JetBlue it happened AGAIN since the same thing happened at JFK in 2002 ( didnt get any live media coverage).

ByrdluvsAWACO

I see the Blue Kool Aid is being passed around.

Do you guys honestly think that the general public is saying "Wow. I'm going to fly B6 because their landing gear didn't break!"

I doubt it. They're most likely saying "I'm not flying that airline because their wheels don't work!"

These are the same people who don't know what type of plane their on half the time.

prhs1989

Wow. I'm going to fly B6 because their landing gear didn't break!" They probably won't be saying that, but when you have passengers coming on "The View" and other media outlets saying the crew was phenomenal and they were the upmost professional, passengers are going to be impressed. And then when you get Broadcasters announcing how they have free Directv with 30 channels and they are one of the few profitable airlines and safety record is superb, and how they fly to Long Beach and Burbank and JFK, it creates a buzz, which will last longer then a minor incident, that was only publicized because their was a "news shortage."

"I'm not flying that airline because their wheels don't work!" This will last for maybe a week. That's like someone not eating meat because of Madcow. When everyone talks about MadCow disease, they'll be frightened. Two weeks later, when the hot topic is about a missing child, they'll completely forget about this incident. No one was hurt or injured, so there is no reason for the American public to remember it.

Jon Maiman

For the record, I don't fly JetBlue because they don't offer service in my area. Otherwise, I would certainly try flying them. The whole media coverage of the LAX Flt. 292 landing gear issue is a symptom of our current times. The broadcast media is only looking for incidents they can sensationalize to report. From all accounts so far, Flt. 292 was handled amazingly well by JetBlue. Yes there should be an investigation to see if there is a design or maintenance issue with the A320 landing gear to ensure it doesn't happen again. However, having the media hovering essentially waiting for a crash and almost sounding disappointed when there wasn't one is ridiculous! While the landing may have been newsworthy, more balanced reporting would have been appropriate. Our media today always seems to be on the hunt for bad news to report. What happened to reporting good news? Better yet what happened to at least trying to be closer to objective? End of rant....

--Jon