AMR''s loss = JetBlue gain

[Hopeful]

LOOKS LIKE JETBLUE READY EXPAND AS AMR SHRINKS:

Business News Bulletin
Carty May Be Grounded At AMR Meeting
Tara Murphy, 04.24.03, 10:00 AM ET

NEW YORK - Making headlines this morning, AMR''s board is set to meet today to discuss Chief Executive Donald Carty''s future at the parent of cash-strapped American Airlines.


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Sources in media reports say board members aren''t pleased with Carty, who failed to inform the airline''s unions of executive benefits and a pension fund that would be protected in bankruptcy. AMR (nyse: AMR - news - people ) could name former Sears Roebuck (nyse: S - news - people ) Chairman and CEO Edward Brennan or University of Oklahoma President David Boren as interim chairman if Carty steps down.

U.S. stocks got off to a weaker start this morning, after finishing stronger yesterday thanks to some good news from corporate earnings. Qualcomm (nasdaq: QCOM - news - people ) delivered improved quarterly profits and upped its full year guidance due to strong demand for its advanced cell phone chips, while Aetna (nyse: AET - news - people ) beat Wall Street expectation and turned a profit on a downturn in medical cost increases.

Elsewhere, Pizza Hut and Taco Bell chain operator Yum! Brands (nyse: YUM - news - people ) warned that SARS could take a bite out of its 2003 results, after posting a 5.6% decline in earnings.

On the economic front, U.S. durable goods orders for March were up 2%, after slipping 1.5% in February, and initial jobless claims last week rose to 455,000, as the job market remained weak.

In other news, JetBlue Airways (nasdaq: JBLU - news - people ) is reportedly close to announcing a $4 billion order for 65 Airbus narrow body jets. The order, which includes an option for 50 more aircraft, would be the biggest in 2003 for Airbus or its U.S. competitor Boeing (nyse: BA - news - people ).

That''s it for now. For all the latest business headlines, log on to Forbes.com.





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[Winglet]

Application going into JetBlue this weekend. Jetblue has a future. American Airlines is D-E-A-D. JB to probably buy 115 more aircraft . . . American probably going to get rid of about 130. JB has decent ethical leadership . . . American has Carty and Arpey. JB has a business plan . . . . AAL has none. The APA pilot's union has turned itself into a doormat for Carty . . . . JB management treats it's employees well enough that most don't even see the need for a union yet.

I quit a good job to come to American Airlines in good faith. That faith has been spit on by the incompetence and greed of its leadership as well as my own union.

 

[WXGuesser]

Gee, that''s nice. Maybe it will enable them to fly more than 12 places.

TANSTAAFL

 

[737nCH11]

CH11 or not, AMR isn''t going away any time soon. I do think, however, that JetBlue stands a chance of turning into another People Express when the majors get their houses in order.

 

[Hopeful]

With 65 more jets, it adds up to more than 12 places my boy.

 

[Hopeful]

Amen to that, Winglet. I feat AMR will join the likes of Eastern And PanAM.

 

[WXGuesser]

Sorry, that should have read 22 places (because that''s all they fly to!) Call me again when they have more than two destinations in the entire Central Time Zone.

JetBlue has a great concept, and seems to have a good corporate culture. But don''t think they are in some way immune from the problems facing the industry. They will have to deal with things like unions and maintenance issues down the road. It remains to be seen how those things are dealt with.

TANSTAAFL

 

[BDLDFW]

----------------
I do think, however, that JetBlue stands a chance of turning into another People Express when the majors get their houses in order.
----------------​

So Continental''s gonna take them over?

 

[Hopeful]

How do you explain a nice size order for 65 jets in these worst of economic times?

 

[Daedalus]

An analyst asked David Neeleman this very question today during jetBlue''s cc.

Neeleman answered by saying that airlines in general tend to buy new aircraft during good economic times, only to receive those aircraft during economic downturns. He also stated that negotiating a favorable purchase price is much easier now versus times when everybody is buying.

I guess this is another example of how one can measure the true skills of a management team that is on track and making good decisions for the airline they are steering.

 

[Airlines9]

----------------
On 4/24/2003 11:36:39 AM Daedalus wrote:


I guess this is another example of how one can measure the true skills of a management team that is on track and making good decisions for the airline they are steering.

----------------​

Heres another way:


JetBlue Announces First Quarter 2003 Earnings

Low-Fare Carrier Achieves First Quarter Operating Margin of 15.9%;
Airline''s Fifth Consecutive Quarter of Double Digit Operating Margins
New York, NY (April 24, 2003) -- JetBlue Airways Corporation (Nasdaq: JBLU) today reported its results for the first quarter 2003:

Operating revenues for the quarter totaled $217.1 million, representing growth of 62.8% over operating revenues of $133.4 million in the first quarter of 2002.
Operating income in the quarter was $34.5 million, resulting in a 15.9% operating margin. This compares with operating income of $23.4 million and a 17.5% operating margin in the first quarter of 2002.
Net income for the quarter was $17.4 million, representing earnings of $0.25 per diluted share, compared with first quarter 2002 net income of $13.0 million, or $0.23 per diluted share.
Earnings per share figures for the first quarter reflect an increase in the number of weighted average shares outstanding compared to 2002 as a result of the Company''s initial public offering in April 2002. Weighted average shares outstanding for all periods include the effect of the Company''s three-for-two stock split on December 12, 2002.
"We''re proud of our continued solid performance this quarter in the midst of a very difficult operating environment," said David Neeleman, chief executive officer. "In three short years we''ve achieved nine quarters of profitability, including five consecutive quarters of double-digit operating margins, earned remarkable loyalty among our customers, and grown the JetBlue family to 4,970 crewmembers. With our dedicated crewmembers continuing to provide great customer service and today''s Airbus order announcement supplying the aircraft needed to build on our success, we believe JetBlue is well positioned to continue on its current growth path."

During the first quarter of 2003, JetBlue achieved a completion factor of 98.8% of scheduled flights compared to 99.9% in 2002. On-time performance, defined by the US Department of Transportation as arrivals within 14 minutes of schedule, was 76.6% in the first quarter of 2003 compared to 85.4% for the same period in 2002. Operating performance was negatively impacted by the severe weather experienced in the Northeast throughout the quarter, with record-setting snowfall including the President''s Day snowstorm, which forced the cancellation of an entire day''s schedule out of JFK, as well as many cancellations out of Washington D.C. Dulles Airport. Excluding the effects of weather, completion factor for the first quarter was 99.9%. The Company attained a load factor of 81.4%, an improvement of 0.6 points, on a capacity increase of 80.7% over the first quarter of 2002.

Dave Barger, president and chief operating officer, commented, "Despite the operational challenges of the first quarter of 2003, our crewmembers dedicated themselves to delivering the JetBlue experience and working to build JetBlue into the airline of choice for all travelers."

For the first quarter 2003, operating revenues increased by 62.8% over 2002 to $217.1 million. Revenue passenger miles increased 82.1% from the first quarter of 2002 to 2.4 billion. Available seat miles grew 80.7% to 2.9 billion. Yield per passenger mile was 8.84 cents, down 10.7% compared to 2002 on a 6.9% increase in average length of haul. Operating revenue per available seat mile (RASM) decreased 10.1% year-over-year to 7.42 cents. Year-over-year quarterly comparisons are affected by the fact that the Easter/Passover holiday that fell in the first quarter of 2002 fell in the second quarter of 2003.

Operating expenses for the first quarter of 2003 were $182.7 million, up 66.1% from the first quarter of 2002. Operating expense per ASM (CASM) for the first quarter decreased 8.2% year-over-year to 6.25 cents and decreased 1.1% from the fourth quarter 2002. During the quarter, realized fuel prices were 98 cents per gallon, a 57.4% increase over first quarter 2002 realized fuel prices of 62 cents. During the quarter, JetBlue generated positive cash flows from operations of $31.7 million and ended the quarter with cash and short-term investments of $253.9 million.

All this in the worst of times. 80%+ load factors. WOW!

#9

 

[Bob Owens]

----------------
On 4/24/2003 10:09:14 AM 737nCH11 wrote:

CH11 or not, AMR isn't going away any time soon. I do think, however, that JetBlue stands a chance of turning into another People Express when the majors get their houses in order.

----------------​

You mean "if".

Gordon Bethune wrote in his book about pissing off your mechanics. AA had a dose of this when they tried to fire mechanics who were on "Hard Copy" sleeping a couple of years ago.

If AA, UA or USAIR really think that they are saving money by slashing mechanics wages they are in for a bitter suprise. Eastern and Pan Am found out the hard way.

Jet Blue got two more of our mechanics this week, both were Crew Chiefs, one with 14 years and another with only around 5. Another guy with about ten years walked in and quit a couple of weeks back. Some would say "So what three out of 400" but turnover is usually very low for aircraft mechanics, and with the economy in the toilet it will be interesting to see what happens when it turns around. We also had about 15 guys retire in just this one station over the last several weeks. AA was hurting last time they had an early out because of the talent drain. This aint like a layoff, these guys are never coming back, and there are not many being pumped out of the schools anymore. None of the mechanics feel this place has a future at this point in time, at least not for us. Come in a collect a check. For most, the drive, the challenge and the fun is gone. That attitude will fester and grow. Most are considering other options for the future. Even if they never leave, they will likely never put their heart into the job again, and that can make all the difference.

Look for the steady decline. There will be no "movement" or "incident" just a slow steady decrease caused by a lack of effort. The company can stick all its BS incentive programs. Save it for the circus. We dont do tricks for treats. Instead of happy mechanics working 40 and everything running smoothly it will be unhappy mechanics working 60 and everything a mess. "Why doesnt anything get fixed?" They used to ask in 2000. The pay raise cost them nothing. Increased wages were offset by reduced overtime and less airplanes sitting in the hangar. Why should they work harder now? They are working 5 days for four days pay. They still need that 5th day of pay. Overtime. A sure thing. Profit Sharing, Stock Options, yea right. That still aint going to make them happy, it will just get them to show up. Dont expect any cheers and "for he's a jolly good fellow" when you offer them a $700 PS check in exchange for the $20,000 you took away.

 

[AAmech]

Wah Wah!! Were not happy so we''re just not going to work! We''ll screw everyone over! Someone get on the phone with Delta Tech Ops! I''m sure they would love to take over this perpetually underperforming sorry excuse of a station. And Move the Checks to AA stations that are interested in doing the work! I''m sick of all this whining giving AMT''s a bad name!

 

[AC AA LA FA]

What happens when those new 320s start crumbeling from all that abuse and the log books start backing up with defered items after defered items..

Its bound to happen sooner rather than later w/ the way these birds are used..

There is nothing worse than seeing a defered item day after day on the same A/C because of lact of time/manpower...pissed off mech-cockpit/cabin crews-pax.....

 

[AAquila]

Using interest-free financing,people are still buying cars in these hard times ditto for the JBLU.

Like it or not JBLU is here to stay (if they stay in their niche, heavy on the Northeast which carry more demanding passengers than LUV''s routes, and those who''ll pay a bit more for service ).

US carriers like AA have to either go ''down '' and meet them or stay the course Carty set for the airline, and wait for an upturn in the economy.

Either way without UAL''s exit soon, we''re heading for BK first, too much overcapacity.