Following discussions a while back…
JetBlue defers a dozen A320s to battle losses
David Kaminski-Morrow (25Apr06, 12:50 GMT, 246 words)US low-fare carrier JetBlue Airways is to defer delivery of 12 Airbus A320 aircraft by three or four years and will sell up to five of its present A320s in a bid to restore profitability at the airline.
JetBlue has today turned in a first-quarter net loss of $32 million against last year’s $6 million surplus for the same three-month period.
In light of the results chief executive David Neeleman has outlined a strategic plan to return the airline to profitability, the first step of which will be to adjust the airline’s fleet.
Twelve A320s scheduled for delivery from 2007-09 will be deferred to 2011-12. JetBlue will also seek buyers for “at least” two of its A320s and “potentially up to five” of the type.
“Taking these actions now allows us to continue to grow at a less-accelerated rate while still preserving our ability to take advantage of the market opportunities now and in the future,” says Neeleman.
Delivery schedules for its Embraer 190 aircraft remain unchanged.
Further details of the strategic plan will be revealed over the course of this year. These will include initiatives to increase revenue, improve fuel efficiency and trim expenditure across the company.
JetBlue plans to reduce capacity in areas of its transcontinental network, shifting to better-performing transcontinental sectors, and combat high fuel prices by switching to shorter-haul services. It plans to trim its ratio of long-haul to shorter-haul flights to 1.2:1 in summer this year compared with 1.5:1 last year.
Source: Air Transport Intelligence news
By: rdc1000 - 25th April 2006 at 15:26
I think it may be difficult to say for certain. I am of the belief that they expanded too fast (the point I made in the last thread regarding this issue) and that is bad news for an airline, it just doesn’t work, but whether it is a short term blip is difficult to predict because JetBlue has apporached the low fare model from a different angle (there have been high service LCCs before, but not on this scale, and lets face it, many of them have gone bust) so they are still breaking new ground to some extent. Hence we don’t have examples of how these model can succeed.
I think its interestig to note that they are reverting back to focusing on shorter routes, which isn’t much of a surpise. LCC airlines tend to find that the amount people are willing to pay for a flight is not proportionate to the distance travelled (and indeed this is true for all airlines), and so they can charge higher fares against distance travelled over shorter routes. This admittedly has cost implications because you’re paying more airport charges, maintenance and possibly even crew costs, but this is more than made up for by being able to charge more for the distance flown…if any of this makes sense! LOL
By: bmi-star - 25th April 2006 at 15:20
Honeymoon over for JB? Or this is just a blip. I hope so, they seem a decent airline
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April 25, 2006 at 2:39 pm