Originally Posted by
Bluedriver
Until you prove me otherwise, I don't believe you know much about JB or the specific challenges it has faced or is facing.
Now, as for the big four airlines, and the profits you say they are now making, those airlines which use their scale as both a way to attract high value customers, and as a weapon against small airlines, those big four are a product of... Wait for it... Very costly and expensive mergers that burned cash and racked up debt...
It sucks that JB is gonna have to go through this process, but the big four all had to go through this process to achieve the scale they have today. Staying small and remaining at the end of the big fours gun barrels isn't a great option. This industry isn't forgiving to those companies that don't look 5-10 years into the future and only do what's easiest/cheapest for today. JB can't control the macro-environment, and certainly there are scenarios that could overwhelm the plan, but otherwise I don't think staying small and independent is a better path forward. Although it's still possible that independent path is forced on us.
I listened to the JBLU earnings call yesterday, and as someone making the comments you are making, I can only assume you did as well. So I wonder what you thought about the tone and demeanor on the call of both JB executives and the analysts that asked questions and made comments? What did their demeanor signal to you about the current state of the company and the investor analysts?
The tone of voice is irrelevant. They could be announcing BK and it would be business as usual to the investor class.
The merger is a question mark as far as I can tell, yes, after 10 years of voluntarily not growing in order to buy back more stock we now are too small to play. We didn't need to buy Spirit of all companies, and we definitely didn't need to do it under the terms we agreed to. We could have bought Allegiant, or Hawaiian, or merged with AK. Our management team got very emotional about the Spirit Frontier tie up, and it showed in their reaction to it.
But all the "Should we buy NK or not?" questioning is irrelevant when our top line revenue is down almost 10% YOY. Our customers are going elsewhere. Demand for air travel isn't down, demand for Jetblue is. Our competitors are GAINING revenue. 10+ years of neglecting our employees, and our operation, and taking our customers for granted has started to come home to roost. Instead of "I love jetblue!" I hear "Oooh, what happened to you guys?" and it shows in our revenue. As our management team scrambles to cut cost in response to this we will probably end up gutting our product, making the entire problem worse. Our customers are premium customers in premium cities. They are leaving us for DAL, not NK. It's not an accident that every time they put mint into a market it suddenly becomes profitable. We need to figure out who we are and who we are competing against, and adjust accordingly.