Funny - as soon as they start publically with the "unfair competition" whine you know things are heading south. Maybe JB will pull it off. Don't forget how enamoured WH is of all things low-cost and off-shore except for executive compensation

 

Can anyone say....People's Express....

 

No where did they say it was unfair. All is fair (fare, sts....) What was said was "#1 on JetBlue executives' list of "irrational competitors" is Delta Air Lines, which created Song", plus similar price matching by other carriers on routes where JB can make a profit on a route (due to our cost structure), but the other airlines lose money.

To fly a route and lose money doesn't make sense. That is why Song is going away. You can't make a good argument to the BK judge why you operate Song at a loss when you are in BK.

Just my opinion.....

FNG

 

Fly4hire- you have "unfair competition" in quotes. Where did you see that? Who are you quoting?

 

Carriers do it routinely. Airlines will defend their hubs and passengers at costs that seem illogical to most. A carrier assumes that when a customer is lost they won't come back; therefore, it is better to lose revenue and keep passengers and market share for a time in the future when loads and yields will improve to the point where profit can be made. That is what the JB team is having a hard time understanding. What Delta is saying to JB is: Hey buddy, we are not going to allow you to waltz in here and steal our business. Some may call it irrational competition but Delta is just reacting to JB coming in and lowballing ticket prices just to steal business. If Delta has to match or lower prices even more - so be it. JB's own management says that they are operating their flights at a loss yet they continue to offer bargains galore. So who is irrational now? You may recall that IAir tried that pretty unsuccessfully at IAD. It used to be that all the majors were always at each others throats trying to move in on routes, hubs and the like. Once they all understood that moving to Atlanta was only going to start a war with Delta or moving to DFW was only asking for a fight with AA, they essentially stopped doing it and declared a truce. It always turned into a bloodbath and everybody involved lost money. The only ones still silly enough to think they can move about untouched are the LCCs. They somehow think the Legacys will be willing to surrender market share just because someone new comes to town. It won't happen without a costly fight, a VERY COSTLY fight!

 

You are exactly correct. Delta did a good job fending off JB on the Florida routes with Song. It's a business decision, "how long can we lose money here while defending our turf". Unfortunetly DAL did run out of money first and declared BK. Song was losing money from the start but worked as an offensive weapon.

 

Must be reading your own company propaganda. Song and Delta lost $2 million a day going head to head with JB. Song, by your own CEOs words, was created to compete againist JB at a 2 cent higher CASM, never expecting a profit. JB grew over 25% on all competing routes with Song and had an 18% RASM premium. If you call that fending off another carrier then you might need to reconsider. Its stupid ideas like this by airline execs that are bleeding the airlines and the pilots to death.

Lots of sources for the numbers but here is a start in case you doubt.
http://www.mapdigital.com/jpmorgan/a.../ondemand.html

 

oh, this is RICH! let's hear it now--L. RON! L.RON! L.RON!

yes, i'm sure you must be right--DL should have known better than to compete with the mighty BLUE! (L. RON! L. RON! L. RON!) they should have just given up and slunk off back to ATL where they belong and then you guys could continue to take over the world at 60% pay rates with 5-year contracts and a fleet of 190's you're having a hard time getting into the air. but you DO have the cutest blue shirts!

i do so want to make sure i've got it; when JB does it, it's BRILLIANT! and the NEW PARADIGM! and the FUTURE OF AIR TRAVEL! and EVERYONE WILL HAVE TO DO IT THIS WAY! when the rest of us dumb schlubs do it, it's "irrational competition".

i wish i had video of l. ron talking about how he has to get another $5 or $10 per ticket. that's going to be a future classic along the lines of dukakis in that tank helmet or john kerry in the sperm-suit. heck, it might even reach to the sky like, "i did not have sex with that woman!"

 

The pursuit of short-term gains in market share at the expense of long-term corporate health would seem "irrational" to managers like Woolman, Patterson, Smith, etc. Today's airline executives, however, say "in the long run, I'm outta here". And they are correct.

 

Low-balling the competition is nothing new in the airline biz. Eastern Air Transport (the forerunner of Eastern Air Lines) once bid 0.00 cents per mile in order to win a specific air mail route, around 1937.