That’s by design so the Swiss cheese model survives a combined training department.

 

I’m actually concerned for the health of this company after the last earnings call. Record profit and we STILL couldn’t get into the black?!!! Seriously, WTF!!!? We have a SERIOUS management/leadership problem here!!!

 

Record revenue yes, record profit no.

I think a lot of this revenue was otherwise unsustainable given the company’s ridiculous reserve use strategy coupled with having to be a pseudo Airbus flight academy for the legacies. That being said, I also think the NEA has something to do with these increased revenues, our increased pax loads, but not necessarily our profits. I am interested to see if/how the company’s strategy changes now through this merger. Ultimately I think stability is what the company needs most.

 

I think we’re all concerned Craig. AB is the first one that needs to be gone yesterday.

 

all of our revenue was sold before the gas price hike. Even if we flew the planes at 100% capacity we couldn’t make money cause the tickets were sold in November with post pandemic prices and sold almost 90-95% of available tickets.

 

Have any of you part-time CFO types actually read all the documents and analyzed them? Is there any chance they “hid” profits by paying off assets, paying off debt, or something like that? I know next to nothing about this stuff, but I do know they’ve paid off lots of assets, paid off loans quickly, and bought back a ton of stock pretty quickly in the past. I just don’t know how we could actually lose that much with everyone else making money. If so, it definitely concerns me.

 

While there are some accounting gimmicks that can be used such as accelerated debt payments and prepayments, etc, it's still usually pretty transparent and reports usually reveal whether a company was operationally profitable or not. I didn't give enough F's to dig into this last report but I believe JB was not operationally profitable.

I think there were two main drivers, among many lesser drivers. One of the two main issues was high fuel costs, where the jet fuel refinery capacity in the northeast is highly constrained, which makes jet fuel purchased in the northeast more expensive than jet fuel in most of the rest of the country. That's why you see/saw a lot of tankering into BOS/JFK/EWR. Because of JB's high network concentration in the northeast, JB had more or less the highest per gallon jet fuel cost for US airlines last quarter.

The second issue is the schedule reduction announced earlier this year. JB couldn't attract/train/retain enough pilots (and other staff) to reliably fly the schedule they wanted/released. So they had to reduce the schedule for the spring/summer during some of the revenue peak, which left a lot of revenue on the table. But that wasn't the biggest problem. The biggest problem is what flying less hours does to CASM, or cost per available seat mile. When you fly a lot less hours than planned, you do have a small proportional decrease in variable costs, such as fuel burn and crew overtime. But all of the airline's fixed costs (aircraft leases, salaried employees, office and training facilities, gate rentals) are now spread over a much smaller pool of available seat miles. So flying fewer hours, utilizing your assets fewer hours per day, dramatically raises your CASM, just as you take in less RASM (revenue).

But the airline didn't have a better short term choice. They didn't have the staff, hadn't done what it would take to attract/train/retain pilots (and other staff) to reliably run the full schedule. Remember the COO's answer to Wall Street was that they were gonna "double down on culture" to fix the attraction/retention problem...

Those two factors, fuel and schedule reduction, were almost certainly enough to go from black to red.

 

JetBlue doesn’t hedge fuel, while most other airlines do. Big ouch right now.

 

I don't know if I'd say "most". Some do, some don't. I believe JB has hedged fuel at points in the past and lost their a$$ in the process.

 

I honestly don’t understand this point. Aren’t we flying less than 2019 with about 10% more pilots on property? Is the 220 and SQ causing the problem there, or is it scheduling (5 hr days for pretty much everyone), or is it something else? Seems like it shouldn’t be a problem to fly less flights than we’ve done in the past with more pilots.