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Originally Posted by Flyby1206
BD, first off thanks for putting this all down. I love the long form journalism and I completely agree with your assessment of JB and the industry.
This is likely the biggest advantage for Moxy, low cost and being a startup. Huge benefit.
I like this concept of taking our non-Mint transcons and giving them a boost with west coast connecting traffic (even if that traffic would be low yield)
Would Moxy’s future network be viable with JB’s cost structure? I genuinely don’t know, but if so then would it also be compatible with other large players in the industry? Are we facing another VX situation where we get outbid, or wind up paying too much for Moxy? On a similar note, if we are looking to merge with a lower cost structure player then why not NK and get an instant fortress hub in FLL?
I really would like to see this happen for many reasons. Remove Wall Street from the board room, reinvigorate employee morale, implement more ambitious growth plans. Yes, Neeleman hates pilots and is a terrible day-to-day manager, and he brought us close to bankruptcy already. But I think those traits are well known by everyone now, including himself. His strengths have the potential to catapult JetBlue into a global brand, but only if he can understand and let his weaknesses be kept in check. We’d still need a strong Board of Directors to do this.
I’ll get blasted, but that’s a good plan B (Or is it Plan A?). We need people on JetBlue planes, and we have zero market penetration on the west coast point of sale. Alaska has the opposite problem. We do very very well on transcons vs them.
I still say that Neeleman is a shrewd businessman and always looking for opportunity. If he gets a nice buyout offer for his A220 orders before the airline even gets operational then I think he would take it, no matter who it is from. If he built a nice west coast network with Moxy and got a buyout from someone then he would take it no matter who it was from.
There is only one thing JetBlue can offer him that no other airline can.
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Love the image at the end of your post... Very true.
Also agree with virtually everything in your post. As to your questions:
Yes, once ESTABLISHED, I believe Moxy's West coast network would work with JB's higher cost. The hard part is establishing the network/customer base in the first place. It would cost a FORTUNE in CAPEX and below-cost fare sales for an extended period of time for JB to do it itself. Which of course they won't do, and can't do simultaneously with growing BOS, FLL, future MCO and a big extended European push.
Would JB be outbid for Moxy in 5-10 years? Personally I think *if* this Moxy thing were to happen, it would happen with a pre-arrangement to sell Moxy to JB in the future, either formally or informally. That, of course, is not a foolproof plan.
Would Moxy become just another failure like VA? Moxy's CASM would be notably lower than it's competitors, at least in the early years, because the delivery slots for the A220 are spoken for. VA was using A320CEO, which of course everyone has or has a similar CASM aircraft. But most importantly, Moxy would have a significant partnership/codeshare/feed with a well established East coast airline, JB. Virgin never had anything like that going for it. Moxy could offer both intra-West coast flights as well as connecting itineraries all over the East coast and all the way to Europe and beyond. Of course VA had international connections, but no large domestic partner.
If you're going to merge with an LCC, why not NK? It's not a terrible idea, of course. But I think JB sees a path to FLL dominance eventually without the expense and distraction of an NK merger right now. Also, I don't see much value in NK merger beyond FLL. As for FLL, one of the big draws for a merger is capturing the other airlines existing customer base. And valuable realestate of course, which NK doesn't have much of. That was a huge factor in JB's pursuit of VA as most of the VA customers would like stay with the combined airline JB+VA. In FLL however, the customer base of JB and NK don't overlap nearly as well. The two airlines aren't really chasing the same customers entirely, so the promise of keeping those FLL customers is much lower, in my opinion.
Definitely not saying this Moxy theory will happen, but it's absolutely a possibility and DN's and JB's moves and timing peak my suspicions.
And, I think DN wants his crown back.
AIRLINE
Another clear, informed post. Thanks Farter.
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