If they could have grown with rates at 2% and making money they would have and this merger wouldn’t be happening. You can’t just make planes and people pop up out of thin air.

 

At least somebody gets it. Mergers have huge expenses, losses will go through the roof for a few years minimum. Will burn through cash at a very high rate. Still haven't heard a single financially sound plan for this new bigger airline. Current management is your demise. If you can't make money in the best quarters while the big 4 are, you are in deep trouble.

 

This shows a poor understanding of stocks.
first of all you are pointing to the historically high end stock valuation. Previously JB stock has reliably bounced bertween 14-20 dollars.
Secondly, share price commonly gets diluted when any company takes on a debt for acquisitions.
Thirdly, the purchasing company (despite taking any debts) tend to have lowered stock prices.
which goes on to say, much of this is normal market behaviour, and doesn't even begin to tough on the fact that most airlines are trading on the low side.

That's not to say that the current stock is where I want it to be. But I'm also seriously considering going against the normal adage of not eating where you sh*t and invest some mo ey into B6.

 

I remember when Sirius stock was trading at like 15 cents a share, over a decade ago, yet it still plays today in my car today.

Relax. Entire industry is due for a downturn, Legacy carriers even noting softening demand after coming off a big year for international travel. Did everything think pay rates only go up, forever, and we would never see another softening in the industry? If so, you haven’t been paying attention the last 45 years.

You think the old guys joking about keeping your first wife, first house, and not buying a boat were joking? This is the industry. Prepare for the bad times and hope they aren’t too long.

Welcome to the airlines.

 

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 concerns with the plan?

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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.

 

As to the company should have been growing, versus buying back stock, you and I agree 100%.

To most of the rest of it, we will have to agree to disagree.

 

Wasn't me. No idea what they said . But if you believe executive talk during very poor financial results I have some swamp land id like to sell you. What do you think they are going to say?? The truth would probably lead to the stock going down to $2.
JB problem are not going to be solved by growing 80% via a boat anchor nobody wants to ride on. The JB way hasn't worked for years. Great product but completely mismanaged. Your never gonna compete with the big 4 becaseu you A, don't have the massive network swa has, or B don't have the international presence. It would take 40 years to catch up. Unfortunately it's very hard to compete on these fronts while you try and grow. They all have the deep pockets, credit card deals, and lots of business travelers to absorb the wars. There's a reason almost nobody new has survived and prospered since deregulation.

 

The "tone and demeanor" was referring to primarily the nature of questions asked by the analysts, but the question itself was placed to get you to admit you hadn't listened to the call. So you are not a JB pilot, not a Spirit pilot, and haven't listened to the investor calls where they talk about the nature of issues facing the airline. In other words, you know a lot less about JB and it's challenges than you think you do, yet here you are being an expert on what will and will not work.

JB was largely profitable before COVID, and even to this day has a cash to debt ratio near the top third of the industry. Many of the issues it is currently facing are temporary in nature, meaning less than a couple of years to work through, at which time it would as a stand alone business be profitable, yet possibly not wildly so. As it is, with no mergers, JB has reached nearly 300 mainline aircraft, and will be returning to profitability. That's no failure... Tell me where each of the big 4 would be without their previous numerous mergers, each?

As far as Spirit being a boat anchor, we aren't acquiring them for their business model or customers. It is an asset purchase, both their existing assets (planes, crews, training facilities, gates) and their future assets. Spirit has a very large and desirable (after the Pratt issues are worked through) order book of A320/321 NEOs with near and medium term deliveries, and most importantly those orders were placed with very low contractual acquisition costs, because the orders were placed well before the current environment of inflation and aircraft scarcity. JB gets a great order book of jets at great prices, as well as gates, bases and crews spread out around the country. They will get a very significant hub in FLL where they will have more market share than they have ever had at any of their hubs. And again JB does not need Spirits existing customer base, it's just not who they target generally.

JB will nearly double in size within a few years of the transaction, and will be approaching half the size of its larger peers, especially in the markets that matter. They are also successfully and more aggressively rolling out a transatlantic network, which should eventually lead to other parts of the world. But yeah, 23 years to nearly 300 jets, a lot of unobtainium slots/gates, a cash to debt ratio in the top third of the industry and a so-far successful transatlantic rollout is a failure because they haven't reached sustained profitablity yet post COVID, no matter the reasons.

All we can do is sit back and watch this all play out. You've made your predictions, I've given a glimpse of mine. I guess we just wait and see what happens, but if you think your airline will be buying JB assets from a BK court I think you'll be very disappointed.
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Yeah, this is part of why I'm not as worried as others. I listened in on the call too and heard what the issues are(mostly if not all temporary, like NEA pulldown as one example), and of course I work here, so I also see what the issues are and how they impact us. Like I said earlier today, ehh.....we'll be just fine, even and especially with the merger.

I understand others concerns though. It all looks scary, especially the cash burn for the pending merger while reporting a loss. But we'll come out the other end, possibly bigger too. I'm more intrigued than concerned.