Jetblue defers deliveries of 21 planes
05-27-2008, 08:13 PM
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Jetblue defers deliveries of 21 planes
Article says selling 6 jets, are these the Airbus? Picking up 11 Embraers instead?
JetBlue Defers Deliveries of 21 Planes to Slow Growth (Update3)
By Mary Schlangenstein
May 27 (Bloomberg) -- JetBlue Airways Corp., the discount carrier partly owned by Germany's Deutsche Lufthansa AG, said it deferred deliveries of 21 Airbus SAS A320 jets to further slow its expansion amid higher jet-fuel prices.
The aircraft have been delayed until 2014 and 2015 instead of arriving next year through 2011, JetBlue said in a statement today. The New York-based airline also said it plans to sell $160 million in debt that can be converted into stock, with the proceeds going to pay existing borrowings.
JetBlue joins carriers such as AMR Corp.'s American Airlines in curbing growth and paring costs to blunt an 83 percent surge in fuel prices in the past year. JetBlue now will add 11 planes in 2009 through 2011, down from a planned 32.
``This is the kind of thing that has to happen right now and is absolutely rational,'' said analyst Robert McAdoo of Avondale Partners in Kansas City, Missouri, who rates JetBlue shares ``market perform'' and doesn't own them. ``This is the functional equivalent of American cutting back.''
JetBlue Chief Executive Officer Dave Barger said in the statement that ``it is essential to take a more financially conservative approach to managing our business.'' Pushing back the aircraft deliveries will mean taking on less debt and enhancing access to funds, he said.
JetBlue rose 21 cents, or 5 percent, to $4.41 at 5:19 p.m. New York time in Nasdaq Stock Market composite trading. While the shares have fallen 25 percent this year, that's the fourth- best performance among 14 carriers in the Bloomberg U.S. Airlines Index.
JetBlue, American
The deferred deliveries were announced as American began detailing cuts for its May 21 plan to reduce U.S. capacity by as much as 12 percent. American, the world's largest airline, said it will drop flights between Chicago and Buenos Aires and Chicago and Honolulu.
JetBlue said last month that its capacity will shrink for the first time ever in the fourth quarter as the airline sells six planes to trim costs. It also earlier pared 2008 expansion to between 3 percent and 5 percent from a previous plan of as much as 8 percent.
This year's initial target already marked a retreat from JetBlue's annual growth in seating capacity of more 20 percent earlier this decade. That expansion was the fastest among major U.S. airlines, boosting JetBlue's net debt fivefold from 2003 through the end of 2007.
The new debt sale will be divided into two $80 million public offerings, JetBlue said. Morgan Stanley & Co. and Merrill Lynch & Co. will be joint managers, JetBlue said.
Credit-default swaps linked to JetBlue bonds fell 240 basis points to 3,010 basis points, according to CMA Datavision in New York. The contracts, which are designed to protect bondholders against default, have surged almost sixfold in the past year. A rise in price indicates a decline in the perception of credit quality.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
Last Updated: May 27, 2008 19:20 EDT
JetBlue Defers Deliveries of 21 Planes to Slow Growth (Update3)
By Mary Schlangenstein
May 27 (Bloomberg) -- JetBlue Airways Corp., the discount carrier partly owned by Germany's Deutsche Lufthansa AG, said it deferred deliveries of 21 Airbus SAS A320 jets to further slow its expansion amid higher jet-fuel prices.
The aircraft have been delayed until 2014 and 2015 instead of arriving next year through 2011, JetBlue said in a statement today. The New York-based airline also said it plans to sell $160 million in debt that can be converted into stock, with the proceeds going to pay existing borrowings.
JetBlue joins carriers such as AMR Corp.'s American Airlines in curbing growth and paring costs to blunt an 83 percent surge in fuel prices in the past year. JetBlue now will add 11 planes in 2009 through 2011, down from a planned 32.
``This is the kind of thing that has to happen right now and is absolutely rational,'' said analyst Robert McAdoo of Avondale Partners in Kansas City, Missouri, who rates JetBlue shares ``market perform'' and doesn't own them. ``This is the functional equivalent of American cutting back.''
JetBlue Chief Executive Officer Dave Barger said in the statement that ``it is essential to take a more financially conservative approach to managing our business.'' Pushing back the aircraft deliveries will mean taking on less debt and enhancing access to funds, he said.
JetBlue rose 21 cents, or 5 percent, to $4.41 at 5:19 p.m. New York time in Nasdaq Stock Market composite trading. While the shares have fallen 25 percent this year, that's the fourth- best performance among 14 carriers in the Bloomberg U.S. Airlines Index.
JetBlue, American
The deferred deliveries were announced as American began detailing cuts for its May 21 plan to reduce U.S. capacity by as much as 12 percent. American, the world's largest airline, said it will drop flights between Chicago and Buenos Aires and Chicago and Honolulu.
JetBlue said last month that its capacity will shrink for the first time ever in the fourth quarter as the airline sells six planes to trim costs. It also earlier pared 2008 expansion to between 3 percent and 5 percent from a previous plan of as much as 8 percent.
This year's initial target already marked a retreat from JetBlue's annual growth in seating capacity of more 20 percent earlier this decade. That expansion was the fastest among major U.S. airlines, boosting JetBlue's net debt fivefold from 2003 through the end of 2007.
The new debt sale will be divided into two $80 million public offerings, JetBlue said. Morgan Stanley & Co. and Merrill Lynch & Co. will be joint managers, JetBlue said.
Credit-default swaps linked to JetBlue bonds fell 240 basis points to 3,010 basis points, according to CMA Datavision in New York. The contracts, which are designed to protect bondholders against default, have surged almost sixfold in the past year. A rise in price indicates a decline in the perception of credit quality.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
Last Updated: May 27, 2008 19:20 EDT
05-28-2008, 04:39 AM
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My understanding is that they don't plan on adding any Airbuses to the fleet until 2014. They have 8 new airbuses they could not cancel coming however will sell 8 buses out of the current fleet for no net gain. All growth aircraft from now until 2014 will be the Jungle Jets. Its not going to sit well with friends at JB. One of the companies promises when they came out with the really low payrates on the 190's was that no current pilot on the seniority list would have to fly those aircraft for more then 2 years. They would all advance to the airbus and the much higher payrates quickly. Now that that is not going to happen there may be more pressure from the JB pilots to raise the 190 rate.
05-28-2008, 04:50 AM
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Originally Posted by sailingfun
One of the companies promises when they came out with the really low payrates on the 190's was that no current pilot on the seniority list would have to fly those aircraft for more then 2 years.
Do JB guys think the company will do the right thing and raise 190 rates to match 320 rates?
05-28-2008, 06:38 AM
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Not likely. And that will **** off a lot of 190 guys. Several 190 FO's are at the end of their 2 year seat lock and are looking to go to the 320. However, there have been no openings for 320 FO. So they are not happy right now and will be more mad soon. Word is that matched payrates are "off the table."
S.
S.
05-28-2008, 02:32 PM
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In the mean time... a look at Neeleman's new airline and aircraft in booming Brazil.... 76 EMB-195's for Azul soon... Nice paintjob.
http://www.voceescolhe.com.br
http://www.voceescolhe.com.br
05-28-2008, 02:36 PM
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Originally Posted by A320Flyer
In the mean time... a look at Neeleman's new airline and aircraft in booming Brazil.... 76 EMB-195's for Azul soon... Nice paintjob.
http://www.voceescolhe.com.br
http://www.voceescolhe.com.br
05-28-2008, 03:16 PM
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Originally Posted by Spaceman Spliff
Management made a promise they can't/won't deliver on? Say it ain't so!
Do JB guys think the company will do the right thing and raise 190 rates to match 320 rates?
Do JB guys think the company will do the right thing and raise 190 rates to match 320 rates?
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