post your odds on JetBlue's survival 1 year out
Feb 20, 2007, 11:42 am
#3
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I give B6 an 85% chance of survival a year from now.
I also predict a full year net loss, yet again. That will make three in a row. While the legacies' finances continue to recover, jetBlue manages to pull defeat from the jaws of victory.
I also predict a full year net loss, yet again. That will make three in a row. While the legacies' finances continue to recover, jetBlue manages to pull defeat from the jaws of victory.
Feb 20, 2007, 11:42 am
#4
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It's ridiculous even to ask. Absent another terrorist attack, the odds are 100%. I believe that JetBlue currently has an unsustainable business model, but that's an entirely different and much longer-run problem. It's also amenable to corrective action over that longer run.
Feb 20, 2007, 12:03 pm
#6
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Will JetBlue be around next year? Yes.
However, a few thought of what might happen:
1)Customer bill of rights being released is just something for the moment to be though out to the public in an attempt to A) show something is being done and B)buying some time to get things straightened out.
2)JetBlue is re-evaluting their whole structure. Last week's events came crashing down on them to show them a couple things. They need to fill in the gaps in their system where they are running awefully thin. With them very recently going from 4 to 3 FA's per A320 flight, they should have had an abundence of extra FA's on the payroll ready to go. Which means they need to schedule much better. With running a high a relatively high cap with as few flights to each destination as possible, they need to have the resources availible to run extra sessions when something like this occurs. They will also need to do some serious route build ups (connect dots and add more frequencies where possible) before they add too many more cities in. Flexability is key.
3)They will be evaluating their gate useage at JFK. If they can't find ways to increase the gate capicities, they will need to have A)be prepared to use stairs when needed and/or B) have agreements with other airlines at JFK to use their empty gates at other terminals in unusual/extrenuous events. (I rather arrive at T-2/3-Delta- rather than sit on the tarmac for several hours.)
4) Re-evaluate their whole internal stucture and accountabilities as well as their staff capabilities. Also,that whole staff cross training works if the cross trained staff works at the terminal (or on flights) at least 2-3 shifts a month. If they don't, they will only be used in the heat of the battle, which they be (more or less) like chickens running around with thier heads cut off, not knowing what to do.
However, a few thought of what might happen:
1)Customer bill of rights being released is just something for the moment to be though out to the public in an attempt to A) show something is being done and B)buying some time to get things straightened out.
2)JetBlue is re-evaluting their whole structure. Last week's events came crashing down on them to show them a couple things. They need to fill in the gaps in their system where they are running awefully thin. With them very recently going from 4 to 3 FA's per A320 flight, they should have had an abundence of extra FA's on the payroll ready to go. Which means they need to schedule much better. With running a high a relatively high cap with as few flights to each destination as possible, they need to have the resources availible to run extra sessions when something like this occurs. They will also need to do some serious route build ups (connect dots and add more frequencies where possible) before they add too many more cities in. Flexability is key.
3)They will be evaluating their gate useage at JFK. If they can't find ways to increase the gate capicities, they will need to have A)be prepared to use stairs when needed and/or B) have agreements with other airlines at JFK to use their empty gates at other terminals in unusual/extrenuous events. (I rather arrive at T-2/3-Delta- rather than sit on the tarmac for several hours.)
4) Re-evaluate their whole internal stucture and accountabilities as well as their staff capabilities. Also,that whole staff cross training works if the cross trained staff works at the terminal (or on flights) at least 2-3 shifts a month. If they don't, they will only be used in the heat of the battle, which they be (more or less) like chickens running around with thier heads cut off, not knowing what to do.
Feb 20, 2007, 12:12 pm
#7
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No question Jetblue will be around in one year. Simple math will tell this future:
Total Assets: 4.8 billion
Total liabilities: 2.8 billion.
Ability to weather the storm = 2 billion.
All figures at December 31, 2006 financial earnings press release.
The two billion represents assets that can be sold for book value or higher. Air Canada is selling or leasing 15 A320s this year. The market can withstand sale lease back transactions on either the E190s or A320s, we are not talking about old MD80s or old 737 Classics that are unmarketable at anything beyond 3 million scrap value.
Total Assets: 4.8 billion
Total liabilities: 2.8 billion.
Ability to weather the storm = 2 billion.
All figures at December 31, 2006 financial earnings press release.
The two billion represents assets that can be sold for book value or higher. Air Canada is selling or leasing 15 A320s this year. The market can withstand sale lease back transactions on either the E190s or A320s, we are not talking about old MD80s or old 737 Classics that are unmarketable at anything beyond 3 million scrap value.
Feb 20, 2007, 12:14 pm
#8
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THey will certainly be around. They just won't be as healthy as they are now.
Feb 20, 2007, 12:20 pm
#9
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I agree with FWAAA. I give them 85 percent, but they will limping along.
Their business model is unsustainable; Neeleman is better at starting an airline than seeing it mature; and the airline's operations are like a house of cards.
Employee morale will continue to deteriorate; revenue growth will stagnate; the product will grow old; amenities will start to disappear, or heretofore free amenities will now carry a charge/fee. We have seen it happen before.
The bloom is off the rose.
Their business model is unsustainable; Neeleman is better at starting an airline than seeing it mature; and the airline's operations are like a house of cards.
Employee morale will continue to deteriorate; revenue growth will stagnate; the product will grow old; amenities will start to disappear, or heretofore free amenities will now carry a charge/fee. We have seen it happen before.
The bloom is off the rose.
Feb 20, 2007, 12:24 pm
#10
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What a STUPID thread!
OF COURSE jetBlue will be around one year from now. Terrorism threats play a role - but thankfully it has been quiet in that area. Even if fuel prices were to sky rocket, which they have not being steady in the $50-$60 range, jetBlue has enough cash on hand to survive.
Many said jetBlue won't live past 5 - that they are the next PE - well, 7 years later and they are still here.
To the poster above who said this will be a third year of loss for jetBlue while other airlines are getting their act together....here's a little news flash: JetBlue basically BROKE EVEN in 2006. That's not a loss. 2005 was a loss...and the company's RTP plan has proven wonders thus far.
To the poster above who said jetBlue will be taost WHEN Virgin America get its license....HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
OF COURSE jetBlue will be around one year from now. Terrorism threats play a role - but thankfully it has been quiet in that area. Even if fuel prices were to sky rocket, which they have not being steady in the $50-$60 range, jetBlue has enough cash on hand to survive.
Many said jetBlue won't live past 5 - that they are the next PE - well, 7 years later and they are still here.
To the poster above who said this will be a third year of loss for jetBlue while other airlines are getting their act together....here's a little news flash: JetBlue basically BROKE EVEN in 2006. That's not a loss. 2005 was a loss...and the company's RTP plan has proven wonders thus far.
To the poster above who said jetBlue will be taost WHEN Virgin America get its license....HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
Feb 20, 2007, 12:26 pm
#11
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For those folks that have JetBlue as part of your screen name, I don't think you need to respond to this thread; I'm pretty sure I know where you stand. 
Feb 20, 2007, 12:36 pm
#12
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Odds one year out: 100 % that they will still be in business.
Action steps for consideration:
1. Neeleman moves to chairman position, and a new CEO is brought in to move away from the charismatic/paternalistic management model they have been suffering under. They need someone from the "New Airline" way of thinking as opposed to the UAL/AA/NWA/DAL etc models. New CEO gets to bring in his/her own top team. This will be good for the stock.
2. Come to grips with middle mgmt staff capabilities of the fine folks that they initially hired at start-up. These were local JFK people from Pan Am, TWA, some of the cargo carriers, and yes even dreaded Tower Air. All good people that know the business and how to work with the intricacies of the FAA, but times have changed.
3. Reconfirm the wisdom of the second airplane type. Neeleman may have been right on this call since Boeing is now actively looking at a 100 seat aircraft as part of the Yellowstone project.
4. Actively prepare for unionization of pilots and other working groups - it is only a matter of time.
5. Commit to building the core business and resisting forays into other areas and spending money that does not directly benefit the core.
6. The new CEO must figure out a way to move away from this screwy pax compensation plan that was just announced.
Action steps for consideration:
1. Neeleman moves to chairman position, and a new CEO is brought in to move away from the charismatic/paternalistic management model they have been suffering under. They need someone from the "New Airline" way of thinking as opposed to the UAL/AA/NWA/DAL etc models. New CEO gets to bring in his/her own top team. This will be good for the stock.
2. Come to grips with middle mgmt staff capabilities of the fine folks that they initially hired at start-up. These were local JFK people from Pan Am, TWA, some of the cargo carriers, and yes even dreaded Tower Air. All good people that know the business and how to work with the intricacies of the FAA, but times have changed.
3. Reconfirm the wisdom of the second airplane type. Neeleman may have been right on this call since Boeing is now actively looking at a 100 seat aircraft as part of the Yellowstone project.
4. Actively prepare for unionization of pilots and other working groups - it is only a matter of time.
5. Commit to building the core business and resisting forays into other areas and spending money that does not directly benefit the core.
6. The new CEO must figure out a way to move away from this screwy pax compensation plan that was just announced.
Feb 20, 2007, 1:18 pm
#13
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JetBlue will be around even with additional competition. B6 has a pretty good management team in place (maybe bad decisions/choices... but good team) and they have a good product.....
I believe it would have to be a combination of conditions to cause them to want to shutdown operations.....what I do believe is that the model they use right now will be changing 90% in the future to cut costs even further.....they may bleed a bit but they'll be alive and kicking^
I believe it would have to be a combination of conditions to cause them to want to shutdown operations.....what I do believe is that the model they use right now will be changing 90% in the future to cut costs even further.....they may bleed a bit but they'll be alive and kicking^
Feb 20, 2007, 1:26 pm
#14
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To the poster above who said this will be a third year of loss for jetBlue while other airlines are getting their act together....here's a little news flash: JetBlue basically BROKE EVEN in 2006. That's not a loss. 2005 was a loss...and the company's RTP plan has proven wonders thus far.
In 2006, B6 lost $7 million before special items; hardly call that "broke even."
Special items consisted mainly of $6 million gain from the sale of five A320s. With the proceeds from the asset sale included, the net loss was close to break even at $1 million.
I prefer to judge the results before gains from asset sales are factored in. YMMV.
Today Neeleman said that the fiasco of this past week will easily cost the airline $20 million, maybe $30 million or even more.
There goes this year's profits.
Feb 20, 2007, 1:26 pm
#15
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I don't think that the customer relations fallout from this nightmare per se will do the airline in. However, the cost of this problem will severly add to its already financial stress. Moreover, the cost of the guarantees it is putting into place could be huge if another incident occurs.
For B6 it is more its business model and fare structures, cost of expansion, possible future labor issues, and inability to react to severe situations due to lack of infrastructure that could do them in.
Still, even after this sizable gaffe there still appears to be Jet Blue loyalists. And they are attacking the PR nightmare (maybe too late) in a straight forward and honest manner.
I give them 60/40.
For B6 it is more its business model and fare structures, cost of expansion, possible future labor issues, and inability to react to severe situations due to lack of infrastructure that could do them in.
Still, even after this sizable gaffe there still appears to be Jet Blue loyalists. And they are attacking the PR nightmare (maybe too late) in a straight forward and honest manner.
I give them 60/40.