post your odds on JetBlue's survival 1 year out
Feb 20, 2007, 6:00 pm
#46
Join Date: May 2001
Location: IAD
Posts: 6,149
I fail to see how that thread is stupid because I didn't know about the new tail design and most frequent flyers for jetBlue or the new unoffical crew of "jetBlue cheerleaders" very much like to know what the new tail designs are. Its like when other airlines get a new "special livery, aka advertisement for your so call new partner" or something like that and everyone talks about it.
There is far more to discuss when things go wrong or things change than when things go well or are status quo. That is the nature of anything.
Feb 20, 2007, 6:32 pm
#47
Join Date: Feb 2006
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Maybe there's far more to discuss when things go wrong than when things go well, because people just love bad news. Bad news is what sells and that is unfortunate.
Feb 20, 2007, 6:35 pm
#48
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Or maybe people value their time and don't like being stuck in airports and cities for 5 days so they're trying to figure out if this airline really sucks or it was just a fluke.
Feb 20, 2007, 7:39 pm
#49
Join Date: Jul 2000
Location: Connecticut
Posts: 893
I'll offer 80-20 odds in favor of one-year survival.
(But why bet with me? A couple of years ago I'd have put up money that USAir would be gone by '06.)
Aside for the usual variables in this industry - labor, travel demand, routes, new competition, fuel price, gate contracts, etc. - B6 has put a whole lot of extra pressure on itself with last weekend's debacle.
The world will be have the "JetBlue = screwups" thought in the back of its collective mind for many, many months ... so a couple of otherwise medium-scale mistakes would quickly catapult JetBlue back into Letterman's monologue.
I'm always leery of any discounter's ability to overcome problems that are an outgrowth of its "save a buck on operations" business structure.
Let's check back on this thread in the first quarter of '08.
Feb 20, 2007, 10:59 pm
#50
Join Date: Oct 2005
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That's why I said jetBlue "basically" BROKE EVEN. Think about how many airlines in this country would have loved to have a loss of ONLY $1 million in 2006 - or since 2006 was better for the industry as a whole, how about a loss of that size in the 4 years after 9/11/01? Many airlines could only wish they posted a loss that small. In reality, a loss that small in this industry is pretty much break-even. Either way, a HUGE turn around from one year ago for jetBlue
The reply isn't about other airlines losing money. So that means B6 didn't lose money? No, they still lost, yes lost, lost, lost, money in 2006.
Again, losing money in 2005 and 2006 means if they lose money in 2007 it is THREE years in a row of losses.
Feb 21, 2007, 6:44 am
#51
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.
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.
Feb 21, 2007, 10:37 am
#53
Join Date: Mar 2005
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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.
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.
Excellent analysis. ^
Feb 21, 2007, 11:10 am
#54
Join Date: Oct 2005
Posts: 294
My bet is 100% for upcoming year, but 50-50 for the coming three year, with 50% for standalone survival, 50% for being acquired by, at this point, US Airways.
excellent post .. I have a few points to add to that.
1. JBLU achieved tremendous turnaround during 4Q06 by increasing RASM and cutting cost, the full year 2006 saving was estimated to be $75M, I really believe that the cost cutting pushed its system to the limits and there is no margin for operational overflows - that is dangerous. Wait till summer peak when both JFK and Florida are both prone to weather conditions
2. The PR team at JBLU should be fired: they know how to hype a new TV channel, a new cookie, but they do not know how to manage crisis. Worst of all, they have been overhyping JBLU: there is only this much more you can give to passengers within the limit of cost effectiveness, the only smart way with air travel is to manage DOWN expectations and to over deliver, yet its PR team over hyped all along, that would cost the company more than $30M to repair
3. Last but not the least, it is the labor issue. JBLU has counted on its young and unjaded crewmembers to deliver superior service, at lower cost if adjusted cost of living. That would not last forever. The meltdown might be a turning point for labors to organize and renogotiate because they have been overworked and their current seniority (5+) calls for a big bump. And when that thing surfaces, it is going to be a downward spiral. But I do not think that it is going to happen within the next year, three years probably.
excellent post .. I have a few points to add to that.
1. JBLU achieved tremendous turnaround during 4Q06 by increasing RASM and cutting cost, the full year 2006 saving was estimated to be $75M, I really believe that the cost cutting pushed its system to the limits and there is no margin for operational overflows - that is dangerous. Wait till summer peak when both JFK and Florida are both prone to weather conditions
2. The PR team at JBLU should be fired: they know how to hype a new TV channel, a new cookie, but they do not know how to manage crisis. Worst of all, they have been overhyping JBLU: there is only this much more you can give to passengers within the limit of cost effectiveness, the only smart way with air travel is to manage DOWN expectations and to over deliver, yet its PR team over hyped all along, that would cost the company more than $30M to repair
3. Last but not the least, it is the labor issue. JBLU has counted on its young and unjaded crewmembers to deliver superior service, at lower cost if adjusted cost of living. That would not last forever. The meltdown might be a turning point for labors to organize and renogotiate because they have been overworked and their current seniority (5+) calls for a big bump. And when that thing surfaces, it is going to be a downward spiral. But I do not think that it is going to happen within the next year, three years probably.
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.
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.