Loss shifts JetBlue's focus to climbing back into black

[Paul]

Onetime Mormon missionary David Neeleman had hoped to spend 2006 spreading the gospel of JetBlue, especially in America's heartland, where his airline's popular brand of high-style, low-cost, low-fare service remains largely unknown.

But for Neeleman, the founder and CEO of the USA's fastest-growing airline, the focus has changed. For the first time since its wildly successful initial public offering in 2002, JetBlue lost money during a quarter.

It was a surprisingly large, $42 million loss in the October-December period, the result of high fuel prices, low fares and a slow upward creep in the operating costs of the 6-year-old carrier. The fourth-quarter loss pushed the discounter $20.3 million into the red for all of 2005. The company expects to lose more money in 2006. (Audio: David Neeleman on the value of adversity)

USAToday

 

[luv2fly]

And it will continue to lose money without those fuel hedges.

 

[coolflyingfool]

I think that all of the new flights that were announced today are the right direction also. Connect-the-dots. With B6 adding service to cities already served and adding new routes between cities already served means only adding a few pilots and flight attendants for the most part. B6 does not have to invest much to add these routes. Good call B6.

 

[corl737]

Connect-the-dots.

Connecting the dots is a tried-and-true economic recipe and one with which JB should have success. As an example, SWA has over 3,000 flights a day between 61 cities yet no one city has more than slightly over 200 flights. Even Lubbock, Texas gets better than a dozen flights! Do the math ... frequency sells!

 

[mga707]

Connecting the dots is a tried-and-true economic recipe and one with which JB should have success. As an example, SWA has over 3,000 flights a day between 61 cities yet no one city has more than slightly over 200 flights. Even Lubbock, Texas gets better than a dozen flights! Do the math ... frequency sells!

To be exact, as of Mar 4, LAS will have 217 weekday departures, PHX 201 and MDW 200.
On the other end, LBB's 13 flights is not the least. CRP has 6 departures, with JAN and RSW following with 9.

 

[whlinder]

(CFO John) Owen and other executives acknowledge that the carrier could catch a break if the current "irrational competition" subsides. That's the term JetBlue executives apply to actions taken by competitors threatened by encroachment by the discounter.

No. 1 on JetBlue executives' list of "irrational competitors" is Delta Air Lines, which created Song to go head-to-head against JetBlue at its New York JFK stronghold.

So in 20 years, when jetBlue is confronted by the 'next-generation jetBlue', flying with low costs and new planes, are they going to pull out of competing markets, or will they become an "irrational competitor"?

 

[ngneer]

One has to wonder whether JetBlue's very aggressive expansion is entirely rational or whether they would be better served by slower growth.

 

[SoftLanding]

Onetime Mormon missionary David Neeleman had hoped to spend 2006 spreading the gospel of JetBlue, especially in America's heartland, where his airline's popular brand of high-style, low-cost, low-fare service remains largely unknown.

But for Neeleman, the founder and CEO of the USA's fastest-growing airline, the focus has changed. For the first time since its wildly successful initial public offering in 2002, JetBlue lost money during a quarter.

It was a surprisingly large, $42 million loss in the October-December period, the result of high fuel prices, low fares and a slow upward creep in the operating costs of the 6-year-old carrier. The fourth-quarter loss pushed the discounter $20.3 million into the red for all of 2005. The company expects to lose more money in 2006. (Audio: David Neeleman on the value of adversity)

USAToday

Paul,

not really directed at you, but at the USA Today article.

The last sentence, "...lose money in 2006" should have been followed by..."if oil prices stays at 60 or above"...or something similar.

Needleman said during the conf call that they figured in fuel at $1.92/gallon for all of 2006, and that was why the loss for 2006. Makes sense?

Fuel prices is already backing off, question is how low will they go...This will help most of the airlines.

 

[TheDog2004]

The big mistake was buying the E190. Incredibly arrogant move.

 

[javaboy]

prediction JBLU will post a profit in 3 of the 4 quarters of 2006 and a modest yearly profit for all of 2006.

:blink:

 

[Diversion]

prediction JBLU will post a profit in 3 of the 4 quarters of 2006 and a modest yearly profit for all of 2006.

:blink:

If that were a wager, I'd take that bet. I've never looked at Jetblue as more than another flash-in-the-pan upstart. Historically, more carriers fail than succeed. History is repeating itself in Jetblue.

 

[javaboy]

If that were a wager, I'd take that bet. I've never looked at Jetblue as more than another flash-in-the-pan upstart. Historically, more carriers fail than succeed. History is repeating itself in Jetblue.

not a wager, just an opinion. a fiscal opinion nothing more nothing less. i think (along with Lehman Brothers) that JBLU will post a modest profit in 2006 and since current guidance is for a loss this would translate into earnings surpise to the upside which would translater into gains in the stock. if this happens earlier than later in the year then the conversion of variable to fixed interest rates for thier captial expenditures would be more favorable which then creates momentum. but then its just an opinion.

 

[Diversion]

The only thing that's going to reverse Jetblue's downward trend would be an increase in revenue and yields. They're not a big enough player to control pricing power.

People may love the TVs, but price will win every time.