Notices

USAToday on JetBlue

Old 02-24-2006, 02:51 AM
  #21  
Gets Weekends Off
 
Joined APC: Mar 2005
Position: A320 FO
Posts: 157
Default

Originally Posted by calcapt
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!

Carriers do it routinely - Yes, but only for a limited time when they are negative cashflow for years.

Market share - Every one of the majors in BK has followed the MARKET SHARE mantra. Losing money and then losing even more to keep market share is obviously not working. Just ask most of the readers on this board. IF you are losing money, raise prices. In good times, a company can afford to lose on certain routes and make it up on others to drive out competition. But when you are in the red, you can't lose as much for as long. Dave N even said it in the article that it was time to raise prices to make a profit. When losing money doesn't work, try something else. At least we have reconginzed the MARKET SHARE Mantra is not good and are fixing it. The legacy carriers still have not awaken to that fact.

No one said the LCC will be untouched. However they will be less affected by the same conditions. Most of the LCC have very little waste to trim. Minor ticket price increase mean a small profit, where the majors, the same price increase just means losing less. The majors have (had) lots of areas to cut cost and improve. But can they trim enought? We will all have to wait and see.

Just my opinion...

FNG
FNG320 is offline  
Old 02-24-2006, 04:21 AM
  #22  
Gets Weekends Off
 
calcapt's Avatar
 
Joined APC: Jan 2006
Position: 737 Captain
Posts: 777
Default profit

Originally Posted by FNG320

Dave N even said it in the article that it was time to raise prices to make a profit. When losing money doesn't work, try something else. At least we have reconginzed the MARKET SHARE Mantra is not good and are fixing it. The legacy carriers still have not awaken to that fact.

FNG

Raising fares and making a profit is predicated on the assumption that some new hot shot CEO will not come in and offer $69 fares. I think JB would draw less ire and more respect in this forum if they came in and competed on product and customer service rather than how low they are willing to undercut whoever they happen to be moving in on. Now JB management is complaining about low fares degrading profit. Sounds to me like the fellow who was raising cows in his backyard complaining about the smell in the neighborhood.

Legacy carriers have been around a long time and despite you pointing out their shortfalls, they are apt to be around a lot longer. The road is littered however with upstarts who shared JB's philosophy. You're right, we'll see.
calcapt is offline  
Old 02-24-2006, 04:23 AM
  #23  
Line Holder
 
Joined APC: Dec 2005
Posts: 25
Default

[QUOTE=Kill Bill]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!"[/QUOTE

"And for the love of everthing Holy, won't someone PLEASE engage me. I am ever so smart, and witty. I need human contact on a computer forum. "

Last edited by diamonddd; 02-24-2006 at 04:26 AM.
diamonddd is offline  
Old 02-24-2006, 04:52 AM
  #24  
Kill Bill
Guest
 
Posts: n/a
Default

Originally Posted by diamonddd
"And for the love of everthing Holy, won't someone PLEASE engage me. I am ever so smart, and witty. I need human contact on a computer forum. "
why, yes, i AM smart and witty but that's beside the point. the point is that i can't possibly be as smart as you; i didn't choose the blue as my career.

i guess what you're saying, other than that you don't like me and wish i'd go away, is that you don't find the slightest irony in all of this, am i right?

also, you might want to figure out how to quote properly; it makes your posts easier to read.
 
Old 02-24-2006, 05:20 AM
  #25  
Line Holder
 
Joined APC: Dec 2005
Posts: 25
Default

Originally Posted by Kill Bill
why, yes, i AM smart and witty but that's beside the point. the point is that i can't possibly be as smart as you; i didn't choose the blue as my career.

i guess what you're saying, other than that you don't like me and wish i'd go away, is that you don't find the slightest irony in all of this, am i right?

also, you might want to figure out how to quote properly; it makes your posts easier to read.
You mean like this? I'm sorry, you can rant about the company that hired me after my furlough from a Legacy (with furlough protection), you can call me a scientol...sciental...whatever that thing is with that I. ron Butterfly, you can call me a "Blue Kool Aide" drinker, but when you take shots at the way I post on a computer, why, that is just too low. Don't go there. That is just too offensive. No need to pull out the "Big Gun".
diamonddd is offline  
Old 02-24-2006, 05:25 AM
  #26  
Gets Weekends Off
 
Joined APC: Aug 2005
Posts: 322
Default

Originally Posted by calcapt
Raising fares and making a profit is predicated on the assumption that some new hot shot CEO will not come in and offer $69 fares.
Of course, disregarding introductory sales, JB made money at those low fares. That is no longer the case, and it's not because JB is aging. Non-fuel CASM hasn't risen very much over time. It's mostly from fuel. A new hotshot competitor is welcome to come in and make a big splash with such rock bottom fares, but they can't make money at those rates either because fuel is 2 to 3 times more expensive than when JB started up 6+ years ago. They could try to buy market share for a short period of time, but it couldn't last long as a going concern. The real danger would be a carrier with significantly lower, sustainable costs than JB and I have a hard time imagining that.
Blue Dude is offline  
Old 02-24-2006, 05:44 PM
  #27  
banger
Guest
 
Posts: n/a
Default

Originally Posted by Fly4Beer
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
My company is the same as yours.
 
Old 02-24-2006, 07:13 PM
  #28  
Gets Weekends Off
 
calcapt's Avatar
 
Joined APC: Jan 2006
Position: 737 Captain
Posts: 777
Default Puzzled

Originally Posted by Blue Dude
A new hotshot competitor is welcome to come in and make a big splash with such rock bottom fares...
Welcome by whom?

Originally Posted by Blue Dude
but they can't make money at those rates either because fuel is 2 to 3 times more expensive than when JB started up 6+ years ago.

My friend, "they" is you. So why does JB continue to storm into markets offering a product for less than it costs to produce?



I accept the fact that I don't have all the answers but it seems to me that JB is creating this business plan monster that in the end may be the cause of it's own demise. I like the basic JB philosophy (unique flight schedules, live TV, happy folks etc.) that most of their hardworking employees subscribe to; however, JB management is setting a course for some very rough seas and compromising your future with this irrational take over the world with a $69 fare agenda. This is a brutal industry and JB will not escape.
calcapt is offline  
Old 02-25-2006, 02:56 AM
  #29  
Gets Weekends Off
 
calcapt's Avatar
 
Joined APC: Jan 2006
Position: 737 Captain
Posts: 777
Default

"The whole fare thing has to be rethought," CEO David Neeleman tells TheStreet.com.


This is akin to the captain of the Titanic realizing there is an iceberg ahead. Get the life boats out. Oops, we don't have enough - bet Neeleman gets in the first one.
calcapt is offline  
Old 02-25-2006, 05:10 PM
  #30  
Baba Bluey
Guest
 
Posts: n/a
Default

Is that kind of like the CAL pilots bending over for yet another round of concessions after Gordo waltzed away with 20 million?
 
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
LeeFXDWG
JetBlue
16
05-02-2006 08:30 AM
RockBottom
Major
4
04-09-2006 04:23 PM
fireman0174
JetBlue
0
04-05-2006 06:02 PM
mike734
JetBlue
8
02-14-2006 11:07 PM
Sir James
Major
0
07-29-2005 07:02 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices