caphis

Granted I used LAX-JFK for my example, but even with a JFK-LAX, I'm coming up with around $18,000 or so. Again, at $3.50, which is a bit more than what B6 is paying now in hedged fuel costs. Crew cost was added in already.

I'm still wondering how the author of that article got $35,000, though.

sbm12

Very easily. CASM for JetBlue according to their last 10-Q filing is 9.37. So I multiplied .0937 * 150 (seats) * 2500 (miles) and got the resultant cost for the flight. That is a hair over $35K. I never said the cost was all fuel. And I understand that the CASM number is an average and not specific to each flight, but I think that the numbers I presented are reasonable.

caphis

I disagree. You'd be correct if CASM didn't decrease as stage length increased. JFK-LAX is more than twice the average stage length of 1,131 miles.

sbm12

I know that longer flights generally cost less than short ones, but I was willing to use the average number across the carrier since I was talking in averages. Does CASM decrease by half for a flight that is double the stage length? I don't think it does, but I'm not in operations at an airline so I don't know for certain. So I deal in averages.

Even if the flight cost only $20K to operate the o/w fares would still need to average ~$150/seat with 100% LF to be profitable. I don't think that B6 saw those revenues coming and so they've chosen to abort the service launch for now.

caphis

Well, no, it doesn't work in that ratio. But the $35k figure was way out of the ballpark for those I'd heard. The majority of the cost would be in fuel and manpower; those figures are about half of your guesstimate. We can throw in rent, landing fees, and other fixed costs if we want, but my point was just that the "at ~2,500 miles, the flights cost ~$35,000 each to operate" statement just wasn't close.

somedude24

Out of curiosity, how many passengers does this change affect? Since the flights were cancelled at least 15 days before the first one even departs, I'd imagine that the number of aggrieved passengers is somewhat minimized. Nonetheless, I've got to imagine that thousands of potential passengers are affected by this announcement.

Assuming not all of the passengers will agree to be moved to other LA area airports, have any other airlines stepped up to honor the JetBlue fares? (i.e. get your money back from jetblue, show us your e-receipt, and we'll charge you that amount, not a penny more, for a similar itinerary on our airline, which DOES fly to LAX). It could be a great marketing tool. Especially since, in the event a passenger opts for money back from jetBlue, rebooking with shorter notice will likely lead to paying higher fares on other airlines, and make for some particularly ticked off passengers.

sbm12

Fair enough... I updated the blog post to reflect some of the "feedback" I've gotten here. Even at $20K/flight, which I don't think is off the charts, the average seat would have to sell for more than I think JetBlue can drive in revenue, and I think that aborting the service (for now) was a good idea.

caphis

Fair enough.

JetBlueFA

UA and AA are well well entrenched in that market as well. United runs their premium service 757s and AA runs a combination of 757s and 767s. Those 2 thrown into the mix with DL and VX also led to the decision to put off opening LAX for now. I think it was the right decision.

RxCapt

All AA JFK-LAX flights are scheduled with a 3-class 767-200. Occasionally, a 767-300 or 757 is substituted but these aircraft are not regularly scheduled.

JetBlueFA

Thanx for the correction! I thought they might be all 762's but I wasn't completely sure if a 757 was thrown in there for an added frequency.

ScottNYC

I actually DID have a flight for May 23 from JFK to LAX. I received an email yesterday (5/6) stating:

Due to the unprecedented rise in the cost of jet fuel, JetBlue will not be starting service from Los Angeles International (LAX) May 21st as previously announced. We sincerely apologize for the disruption to your travel plans and we hope that you understand this difficult decision. We have taken the liberty of rebooking your flights to and from Long Beach, CA. Your new itinerary is detailed below.

Your flight #679 on Friday, May 23 2008, departing New York, NY (JFK) and arriving in Los Angeles, CA (LAX) has been cancelled.

You are now confirmed on flight #217 on Friday, May 23 2008, now departing New York, NY (JFK) at 6:30 PM and arriving in Long Beach, CA (LGB) at 9:44 PM.

If you would like to make a change to this itinerary, you may do the following on www.jetblue.com: (Note: you will need your confirmation number and new flight number.) convert the value of your booked travel to a credit (valid for one year for any future booking) change to a different flight out of Long Beach, CA request a refund

If you would like to rebook from one of our other Southern California destinations (Burbank or Ontario), please give us a call at 800-JETBLUE (800-538-2583).

We at JetBlue know you value low fares, along with the JetBlue Experience of free television, unlimited snacks, and friendly crewmembers. After much deliberation, we reconsidered our decision to fly out of LAX in order to be able to provide the lower fares and wonderful amenities that we hope to be able to offer to our customers.

In today's business environment, we are committed to providing our award-winning customer service within current economic constraints and the realities of today's energy challenges. We are committed to continuing to deliver the JetBlue Experience you have come to expect from our other Southern California destinations, including Long Beach, Ontario and Burbank. We are also pleased to bring you more intra-West Coast flying from our focus city in Long Beach to Seattle, Oakland, Sacramento, San Jose, as well as nonstop service to Salt Lake City, Las Vegas and Austin.

We look forward to welcoming you on JetBlue in the future. Thank you for choosing JetBlue.

Sincerely,

JetBlue Airways

I'm still not sure if they will honor any changes (since I'd prefer to fly the earlier flight to LGB, but LGB is actually more convenient for me anyways. Using a TrueBlue reward, LAX was what I had to book initially to get a free flight since LGB wasn't available.

ScottNYC

And as an update to my earlier message, I checked my rebooked flight and noticed that there was no new seat assignment. I called the Customer Service # and they were kind enough to grant me an EML seat for free (after I asked if this was possible). This was really nice of the agent considering my flight was a TrueBlue Reward flight to begin with.

FWAAA

I agree that your numbers are reasonable, especially considering that the CASM for the second quarter (where we are now) is likely to be significantly higher now that fuel is almost $4/gal.

But even at $20k per flight instead of your earlier ballpark estimate, transcons are becoming Very Expensive to fly.

Especially if you don't sell any $2,000 F tickets to Hollywood types and Wall St types (like the celebs and bankers on my AA JFK-LAX transcon last night).

jetBlue gets its share of celebs, but it doesn't gouge them for a big, comfy seat. In a way, that's like leaving money on the table. These people buy shoes and handbags at four-figure prices, and if they're willing to do the same for a big airplane seat for six hours, an airline might as well take their money.

LoneStarMike

What is JetBlue going to do with the aircraft that would have operated these flights?