FlyerTalk Forums - View Single Post - post your odds on JetBlue's survival 1 year out
Old Feb 21, 2007, 6:44 am
  #51  
Intrepid
 
Join Date: Jan 2002
Location: ORD, MBS
Programs: UA Plat., 1.52 MM
Posts: 2,053
My bet:

In order to make a bet on the odds of survival let me list some challenges that confront the CEO of JBLU:
1) By his own admission JBLU will have to hire/rehire staff to cover for the "lack of depth" in all lines of occupations. Payroll will increase fixed costs.
2) By all accounts JBLU must upgrade its reservation system. This and other IT improvments will cost money.
3) Seems that JBLU lacks backup equipment. It will have to acquire/lease and keep some airplanes for contingency. That costs money and will increase fixed costs.
4) To survive contingencies, JBLU needs a backup/secondary hub (in addition to JFK) somewhere in the West. The acquisition/rental/leasing costs of gates, offices, infrastructure, hiring G/As, dispatchers, IT - all cost money and increase fixed costs.
5) To retain market share JBLU will have to keep its fares very competitive. Competitve fares means limit on revenue. Bad for the P&L statement.
6) JetBlue has no control over world price of JetFuel. May become a problem in the future.
7) The good news - the estimated $30 million costs of the last week fiasco are petty cash compared to the future looming capital outlays. (see above).

So.
Will JBLU fly around one year from now? Somehow Yes.
Two years from now? 50/50. If around - then under chapter 11 reorganization. If not around it will have been merged by another airline CEO with a monumental ego who is sober.
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