jetBlue delays E190 Deliveries

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12-04-2006, 12:28 PM
T-Bird76

jetBlue delays E190 Deliveries

Quote:

JetBlue delays delivery of new planes
By James Bernstein
Newsday Staff Writer

December 4, 2006, 9:44 AM EST

JetBlue Airways Corp., once among the fastest-growing airlines in the industry, said today it is delaying deliveries of new Embraer 190 jets that it had been scheduled to receive from 2007 to 2010.

The Forest Hills-based airline said it is delaying delivery of 32 so-called E-190 jets between 2007 and 2010 because of higher fuel prices and increasing competition, factors that have been plaguing JetBlue and other airlines for several years now, even though passenger traffic has increased dramatically since the Sept. 11, 2001 terror attacks.

JetBlue will accept delivery of 10 of the Brazilian-built E-190s next year, down from the 18 it had been scheduled to receive.

The airline also said, as it has previously, that its growth target for next year will be to increase capacity by 14 percent to 17 percent, down from its previous goal of 18 percent to 20 percent.

Amy Carpi, JetBlue's director of investor relations, said in a telephone interview this morning that the airline may be slowing growth some but, "We remain a growth airline."

JetBlue's fleet consisted of Airbus A-320 jets, until it began taking on E-190s, which carry about 100 passengers and enable the airline to focus on more higher-return, shorter flights.

JetBlue in October reported a third-quarter loss of $500,000, compared with a gain of $2.69 million in the same period last year.

The airline has orders for 100 E-190s and options on another 100.

In a statement this morning, David Neeleman, JetBlue's founder and chairman, said, "We are now entering a new chapter in the JetBlue story -- still a story of strategic growth, but more a targeted growth that builds on our market dominance on the East Coast, and in particular, our home base of operations" at Kennedy Airport.

Shares of JetBlue closed Friday at $13.38, down 28 cents.
12-04-2006, 02:05 PM
Matt Molnar

I hope this is a pre-emptive measure to prevent major problems rather than a response to major problems they already have. And why is it they always blame fuel costs, which are actually lower now, and they never mention their labor costs, which must be growing close to those of the legacy carriers?
12-04-2006, 02:14 PM
T-Bird76

Quote:

Originally Posted by GothamSpotter

I hope this is a pre-emptive measure to prevent major problems rather than a response to major problems they already have. And why is it they always blame fuel costs, which are actually lower now, and they never mention their labor costs, which must be growing close to those of the legacy carriers?

They also don't mention that most of their new stations aren't making money. There's a good story behind the opening of the Tucson station. The flight is so weight restricted it loses money on every trip back to JFK. TUS can only use the smaller runway when B6s flight leaves so they can't fill it. I know a few people at B6 and each one tells me management doesn’t listen to the people on the front line.
12-04-2006, 04:09 PM
bluejuice

Although fuel is lower, when you hedge fuel you pay the price where you hedged at. Remember you are hedging against the price going up not down.. So most of the airlines are paying more for fuel then the market rate is through the next quarter or so. This is the downside of hedging. We are still going to accept our 100 E190s through the life of the contract. We have just adjusted the delivery schedule to account for the number of new routes for 2007. As far as the routes making money it sometimes takes 6-9 months for it to become profitable. Many of out new cities are less then 6 months old.
12-04-2006, 06:38 PM
JetBlueAirwaysFan

Hi, I'm knew to the website. I am very much interested in my local airport, DAB. I am hoping to see JetBlue come to Daytona Beach, and I like what David Neelman says about their targeted growth on the east coast. Could that be good news for Daytona Beach?
12-04-2006, 08:27 PM
Matt Molnar

Quote:

Originally Posted by bluejuice

Although fuel is lower, when you hedge fuel you pay the price where you hedged at.

That's right, I forgot about jetBlue's hedging problems. But I don't think they hedged all that much, no more than 20% of their total supply.
12-04-2006, 08:29 PM
nwafan20

It's really a hit or miss with fuel hedges, WN got real lucky with theirs, Jet Blue didn't.