Barger replaces Neeleman as CEO
May 10, 2007, 9:53 am
#16
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Not unexpected at all. Neeleman has presided over one bad decision after another. Let's review some of them:
1. Second fleet type. Never a good idea to intentionally increase costs in hopes of chasing smaller and smaller markets. If you're good at what you do, you can grow a small airline into a big airline with a single fleet type. Just like WN has done.
2. Far too aggressive growth rates. Early success caused the not-so-astute businessman (Neeleman) to think he could turn B6 into WN in less than half the time it took WN to grow large. Big mistake. Too much growth, much too quickly, and losses are generally soon to follow. That's what happened at jetBlue. Loss after loss after loss, even when the dinosaur legacies are turning from their post-September 11 losses into profits.
3. Failure to hedge fuel. Although B6 currently has an effective hedging program, it suffered in the 2004-06 fuel run-up because the leadership failed to emulate WN's effective fuel hedging strategies. The dinosaur legacies, of course, also failed to hedge fuel in the same period, but they were prevented from doing so because of their negative cash flow and poor credit ratings. Not so at B6. When you're nearly bankrupt, you have to pick and choose among the things on which you spend money. B6, on the other hand, was well-capitalized and had positive cash flow soon after it began flying. Yet B6 found itself exposed to fuel price spikes, just like the legacies that couldn't effectively hedge. Neeleman just couldn't stay focused on what mattered. Better to chase smaller and smaller markets with a second fleet type than hedge fuel. What an idiot. And you can see what these stupid decisions did to the stock price.
Had Neeleman slowed aircraft deliveries following September 11 (as WN did) and focused on the inevitable rise in fuel prices, we wouldn't be posting to a thread like this. Instead, he finally lost Soros enough money (and everyone else) to cause a change at the top.
Sure, B6 is a fun, hip airline for customers. It's too bad (for the investors) that it's been so poorly managed for the last seven years.
1. Second fleet type. Never a good idea to intentionally increase costs in hopes of chasing smaller and smaller markets. If you're good at what you do, you can grow a small airline into a big airline with a single fleet type. Just like WN has done.
2. Far too aggressive growth rates. Early success caused the not-so-astute businessman (Neeleman) to think he could turn B6 into WN in less than half the time it took WN to grow large. Big mistake. Too much growth, much too quickly, and losses are generally soon to follow. That's what happened at jetBlue. Loss after loss after loss, even when the dinosaur legacies are turning from their post-September 11 losses into profits.
3. Failure to hedge fuel. Although B6 currently has an effective hedging program, it suffered in the 2004-06 fuel run-up because the leadership failed to emulate WN's effective fuel hedging strategies. The dinosaur legacies, of course, also failed to hedge fuel in the same period, but they were prevented from doing so because of their negative cash flow and poor credit ratings. Not so at B6. When you're nearly bankrupt, you have to pick and choose among the things on which you spend money. B6, on the other hand, was well-capitalized and had positive cash flow soon after it began flying. Yet B6 found itself exposed to fuel price spikes, just like the legacies that couldn't effectively hedge. Neeleman just couldn't stay focused on what mattered. Better to chase smaller and smaller markets with a second fleet type than hedge fuel. What an idiot. And you can see what these stupid decisions did to the stock price.
Had Neeleman slowed aircraft deliveries following September 11 (as WN did) and focused on the inevitable rise in fuel prices, we wouldn't be posting to a thread like this. Instead, he finally lost Soros enough money (and everyone else) to cause a change at the top.
Sure, B6 is a fun, hip airline for customers. It's too bad (for the investors) that it's been so poorly managed for the last seven years.
May 10, 2007, 10:07 am
#17
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I won't say that they've been too poorly managed. Has Neeleman had his management mistakes? Yes, but what CEO wouldn't in a 9+/- year reign? Keep in mind that B6 showed only 2 years of losses in 6 years of opperations. That means the've turned a profit twice as often as when the've posted a loss. Under Neeleman's duration as president, they went from 0 flights and 0 cities to 52 destinations and 575 daily flights. If it was so poorly mismanaged, they would have gone belly up in the matter of months since they ran their first JFK-BUF flight (first ever B6 flight). But that's just MHO.
Last edited by Seat13c; May 10, 2007 at 11:27 am Reason: grammar
May 10, 2007, 10:43 am
#18
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Just another thought, what's going to happen to Neeleman's flight log? I wonder if he's going to keep it up, is Barger going to do his own? Is it going to disappear? Just curious...not that it matters a whole lot.
May 10, 2007, 11:08 am
#20
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The low hanging fruit is gone and a different strategy is needed to continue growing. Basically, the era of just showing up and getting business is over.
May 10, 2007, 1:35 pm
#21
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JetBlue Dumps CEO
http://www.cbsnews.com/stories/2007/...n2785885.shtml
May 10, 2007, 1:39 pm
#22
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Barger replaces Neeleman as CEO
deleted
Last edited by Seat13c; May 10, 2007 at 1:46 pm Reason: deleted as per poster's request.
May 10, 2007, 1:48 pm
#26
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May 10, 2007, 1:58 pm
#27
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I've been experiencing the same problems you have with getting onto FT. However, this thread inparticular, I accidentally deleted it. Due to the forum being up and down for a couple hours, I didn't notice it right away.
I think all the problems have been solved on the website's end and things should be running smoothly again.
I think all the problems have been solved on the website's end and things should be running smoothly again.
May 10, 2007, 2:03 pm
#28
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JetBlue pushes out Neeleman
I'm surprised that this hasn't been posted yet, but I'm sure this board's resident JetBlue cheerleaders are trying to find a way to put a positive spin on this turn of events. There is also speculation over on airlners.net, FWIW, that JetBlue is now the target of a takeover attempt by Delta. This possibility has been floated several times before, but the rumor appears to be picking up steam.
http://www.foxnews.com/story/0,2933,271209,00.html
Posted on another board...
NEW YORK, May 10 (Reuters) - JetBlue Airways Corp. (JBLU.O: Quote, Profile , Research) on Thursday pushed out founder David Neeleman as chief executive three months after a service meltdown.
JetBlue said he would carry on as non-executive chairman playing a more strategic role.
The budget carrier replaced Neeleman, 47, with president and chief operating officer Dave Barger, 49, effective immediately.
The sudden change in leadership comes after JetBlue suffered an embarrassing service disruption on Feb. 14 that exposed weaknesses in the seven-year-old airline's operations.
A Valentine's Day ice storm stranded passengers on planes for hours, led to nearly 1,200 flight cancellations over several days, and cost the company more than $30 million.
"The board suggested to David that he could best serve the company in a more strategic role. David agreed," JetBlue spokeswoman Jenny Dervin said. "The conversation was initiated by the board."
http://www.foxnews.com/story/0,2933,271209,00.html
Posted on another board...
NEW YORK, May 10 (Reuters) - JetBlue Airways Corp. (JBLU.O: Quote, Profile , Research) on Thursday pushed out founder David Neeleman as chief executive three months after a service meltdown.
JetBlue said he would carry on as non-executive chairman playing a more strategic role.
The budget carrier replaced Neeleman, 47, with president and chief operating officer Dave Barger, 49, effective immediately.
The sudden change in leadership comes after JetBlue suffered an embarrassing service disruption on Feb. 14 that exposed weaknesses in the seven-year-old airline's operations.
A Valentine's Day ice storm stranded passengers on planes for hours, led to nearly 1,200 flight cancellations over several days, and cost the company more than $30 million.
"The board suggested to David that he could best serve the company in a more strategic role. David agreed," JetBlue spokeswoman Jenny Dervin said. "The conversation was initiated by the board."
May 10, 2007, 2:34 pm
#29
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For a little while about mid-day today the forums appeared to be fully functional but PMs and posts from today were not viewable.
May 10, 2007, 3:04 pm
#30
Join Date: Nov 2005
Posts: 240
Just got to the hotel on the west coast and we got the news when we landed. I personally think this is a very positive move. Whilst David Neeleman is a hell of a great guy, he is a visionary and not an operational guy. Dave Barger is one of the sharpest people that I have ever met and with his aviation background I think he will forge a strong working relationship with Russ Chew our president of operations. I keep repeating myself, but things are changing operationally at JetBlue and we are going to get stronger as we continue to grow. I haven't had the opportunity to gauge the reaction of the pilot group yet, but I would bet that most pilots, including myself, will welcome this move. Remember David Neeleman will now have more time to devote to other aspects of our operation.