copy , 05-10-2020 12:00 AM
Gets Weekends Off
Breeze also planned on zero revenue during their current startup timeframe. In other words, they aren’t losing any money now due to covid that they didn’t plan to lose already, whereas every other airline (incl NK/F9) is losing billions with parked and/or empty planes and idle pilots with no revenue coming in, and amassing huge debt, which will cost money to service (raising their overall costs down the road). Besides the handful of initial cadre and DECs on year 3/2 pay, as stated above, everyone will be on year 1 pay. And the pay scales/401k are hot garbage. Barely higher than regional pay scales. E195 pay a little over half of JB E190 pay, and A220 pay a little over half of JB A220 pay when you factor in 401k. And...now they have thousands of apps on file (even pre-covid they had a ton). So there is no pressure to raise the pay now, or worry about turnover for guys going to legacies (saving training costs). One guy I know in the pool there was planning on bouncing to any of the big 3/SWA/AS/B6/G4 even if he had a single or low digit seniority number at Breeze. Not anymore. Even if he wanted to leave, doubtful anyone will be hiring in the next couple years. I’m sure he isn’t the only one, so Breeze dodged a huge bullet there. Whereas it was going to be a stepping stone, even with the allure of getting in on the ground floor, now it’s not...at least for a couple/few years.
Also, as a startup, they can build their systems from the ground up, which enables a lot more efficiency. I’m also guessing they can negotiate a lot of things at a discount right now, between lease/finance rates, contract employees, GSE, etc.
Taking a look at the allegiant thread, they are in contraction mode. Breeze’s network guy came from there, so I have to think he will be able to capitalize on that, as well as newfound availability to access some other gates/slots that wouldn’t have otherwise been available. Before, Breeze said they weren’t going to fly any routes that had competition (largely knowing that the Goliaths like delta would lose money to bleed them out if they did). But now every airline is in survival mode, so there likely won’t be much of a competitive response against Breeze. No one can afford to do it. So perhaps they don’t just go for allegiant style routes now...and maybe they won’t avoid competition as hard as they were before.
Minus not selling his stake in TAP when he was trying to and subsequently losing his a$$ with a margin call, by sheer luck Neeleman’s timing is perfect here, assuming demand comes back and he’s able to hit markets that work. He will have a tremendous cost advantage with dirt cheap E195 leases from Azul, cheap pilots, cheap fuel, cheap everything really, probably a good onboard product, pilots and FAs just happy to have a job with a fun startup culture, as well as having charter flights (unless college sports stop next year) securing revenue even if leisure demand is still down when they launch.
Just as the post-9/11 times with hurting legacies allowed JB to grow and access a lot of prime markets, I think this virus has enabled a very rare jetblue 2.0 type of opportunity.