You wise man SFB . When JBlu's costs are rationalized with a 20 year Dep and 10% resid, and long term mx costs in line with SWA (and how many TVs does SWA have to keep working..), BELF looks more in the Mid 80's range. If anybody is unclear of the residual value of a 25 year old example of a 40 year old design, trot on over to the U board and look at the pretty pictures of the salvaged 14 yo 737-400.sfb said:I think it's important to note that jetBlue's very low CASM of just over 6 cents is driven in part by three factors: relatively low wage rates due to its workforce all being in the first three years of their respective pay scales, a high average stage length (about 1250 miles), and very low maintenance expense with the A320's all still under warranty. I'd add that their depreciation numbers are unrealistic if they're still using the formula they stated in their S-1 filing; an A320 is unlikely to retain 20% of its value after 25 years of heavy use.
Introducing 100-seat super-RJ's into the fleet will help reduce pilot costs (lower wage rates) and flight attendant costs (2 required for 100 seats, vs. 4 for 156 seats), but it will increase costs overall due to higher acquisition/depreciation costs per seat, as well as shortening jetBlue's average stage length. Training and maintenance costs will also increase with operation of two fleets.
And jetBlue would be lucky to get 25% load factors on JFK-RIC service at fares of $180 each way, especially if DL/US/CO were to match the fares at LGA and EWR, and if WN were offering ISP-RIC service for $50 each way. jetBlue's costs are going down, but their yields are down as well -- the yields need to come up before the costs do as well, especially before jetBlue starts to expand into less dense markets which won't fill 156-seat A320's as easily as NYC-Florida and NYC-West Coast.
While RJ pilots make less, the per pax cost is comparable, if not higher for even the lowest cost operators.
But back on topic.... IF IT AIN'T BROKE DON'T FIX IT. buying and flying RJ's would be DISASTEROUS to SWA (IMHO, of course) B)