https://finance.yahoo.com/news/jetblue- ... 00369.html

Ben Baldanza, CEO of NK from 2005-2016, has been appointed to B6's board of directors. Quite an interesting move if you ask me, especially since he presided over NK as it fully transformed into a ULCC (and perhaps even introduced the business model to the US airline industry). Does anyone recall if he left NK on good conditions?

Sarah Robb O’Hagan, CEO of Flywheel, has also been appointed to the board. Fascinating....Flywheel certainly knows how to build a loyal following. She was previously president of Equinox - which is also known to have a very loyal/cultish following.

NK was profitable when Baldanza was forced out. Didn't end on good terms since NK's margins were slipping. More terrifying than interesting with him being named to the board. Watch out employees. First it was Hayes, now Baldanza.

This is either a good move or this is going to backfire very quickly.

I'm not quite sure what to make of this. Obviously bringing Baldanza into the fold indicates a renewed emphasis on cost discipline (through tangible, and potentially culturally difficult, initiatives) and I would hate to see JetBlue become another generic ULCC. I wonder if that's offset, though, by O'Hagan and her experience building premium brands with large followings.

It almost seems like they're trying to combine Baldanza's cost savvy with O'Hagan's brand savvy, though I'm skeptical those two goals are complementary.

Sancho99504 wrote:

NK was profitable when Baldanza was forced out. Didn't end on good terms since NK's margins were slipping. More terrifying than interesting with him being named to the board. Watch out employees. First it was Hayes, now Baldanza.

Well, he also has a history at Continental, TACA, and US Airways. At the latter, I suspect he was responsible for the short-lived buildup of their FLL focus city and some of the bizarre marketing which accompanied that (he was SVP of marketing). He took that plan with him to Spirit. He'd bring a lot of knowledge about the FLL market and what works/doesn't work for NK there, although whether or not he's bound by NDA/non-compete/misappropriation of trade secrets, or even in a position to actively use that information as a board member, is another story.

Good luck to the Blue peeps frontline employees. Theyre gonna need it.

The guy certainly knows the airline business as opposed to, you know, working for a train company or a telephone company.

I don't think this one guy is going to change the direction B6 is heading. Mint is just too popular & it has been added to more aircraft & more routes. That is exactly the opposite of a ULCC model. I agree with the earlier replies, where this may be something that may have B6 looking at its expenses & making some cuts at worst. Going from best legroom to 28" pitch, bad move.

I also think if B6 were to head in that direction, they would lose market share on trans cons & could lose a fair share of it to AS. And speaking of AS, IMHO, if B6 does go ULCC, the idea of a merger between B6 & AS, would be nothing short of laughable, hopefully ending any further AS & B6 merge talk here.

I get the impression B6 has more of revenue problem than a cost problem - I'm not quite sure how BBB helps with that. They need someone that specializes in revenue development.

usflyer msp wrote:

I get the impression B6 has more of revenue problem than a cost problem - I'm not quite sure how BBB helps with that. They need someone that specializes in revenue development.

Jetblue has a cost problem compared to ULCCs and a revenue problem compared to legacies.

I just wonder whether he was brought in to pull them closer to being a ULCC. FLL knowledge is great but as Spirit has said the problem is a lack of Int’l processing capacity. He can’t fix that.

B6 will not become a ULCC.

Well B6 fans, hope you enjoyed your airline while it lasted...

Geeze, those that are saying they will now be a ulcc are talking up nonsense. 4 out of the 5 carriers B.B. worked at were full service airlines. He is only one out of the rest of the board members which specialize in premium brands. They just want a mind on certain things they might want to possibly monetize. Mint is a huge revenue generator. They have success especially in northeast where they drive premium yields against their competitors cause of their product. So no, they will not go down the ulcc route.
You need all different ideas when evolving a brand like B6. They are a innovative/disrupter airline. Not a copy/paste airline just to raise a lil more revenue
Read what Robin Hayes said “We believe their insights and experience will make them valued additions to the Board as we evolve JetBlue to deliver our financial commitments while protecting our unique culture and offering a best-in-class customer experience.”

Let's see the pros and cons
Pros:
- He is likely very pro-growth and does not bow down to Wall Street Pressure.
- He has a wide range of experience
- He has a lot of experience cutting costs.

Cons:
- He is unlikely to care about their existing OTP issues
- More push toward ancillary revenue

No, they are not becoming another ULCCs. That's ridiculous. He is not even the CEO. He is just a member on the board. Not the chairman of the board. a member of the board cannot change the direction of the company. That's not how things work.

So i see possibly 2 major influences from him.
1) voting for continued growth and building up of focus cities. Seems like he believes that and will support CEO in that direction
2) voting for greater segmentation. So if there is a push in the company for more a basic economy type of offering with no seat assignment and mileage earning, he is going to support that.

Abeam79 wrote:

You need all different ideas when evolving a brand like B6. They are a innovative/disrupter airline. Not a copy/paste airline just to raise a lil more revenue. Read what Robin Hayes said “We believe their insights and experience will make them valued additions to the Board as we evolve JetBlue to deliver our financial commitments while protecting our unique culture and offering a best-in-class customer experience.”

I personally don't see B6 going the ULCC route but you cannot take statements like this from airline management seriously. It is just corporate-speak designed to make people feel good. B6 will make whatever changes they need to make to be profitable, customer experience and internal culture are secondary considerations.

It's an open question as to whether these appointments will lead to much of a change in anything at B6. Aside from things like exec. compensation and existentially significant changes, most boards are pretty hands off especially with day-to-day decisions.

I don't see JetBlue significantly changing its model anytime soon, but longer term almost anything is possible. That includes possibly becoming another ULCC - especially if Mr Baldanza becomes CEO in the future.

tphuang wrote:

So i see possibly 2 major influences from him.
1) voting for continued growth and building up of focus cities. Seems like he believes that and will support CEO in that direction
2) voting for greater segmentation. So if there is a push in the company for more a basic economy type of offering with no seat assignment and mileage earning, he is going to support that.

3) charging for seat assignments, drinks, snacks, and use of PTV
4) squeezing more seats onto aircraft
5) some cuts to Mint, making it more of a lie flat seat with basic service

The attempt to monetize FlyFi (wifi) quickly came and went - I could see this being a target for revenue. It'd stay "JetBlue" by probably offering some usage for free, say 30 minutes, but then a paid option to continue.

We'll see how all the combined thoughts pan out in a few years. But I bet its no where near the level of spew occurring from you all now.

boeing737max wrote:

B6 will not become a ULCC.

...because _______?

usflyer msp wrote:

B6 will make whatever changes they need to make to be profitable, customer experience and internal culture are secondary considerations.

^Truth

With his understanding of Spirits total operation it could make sense if B6 next play to gain more US marketshare by buying them.
Turn JetBlue into a Hybrid ULCC. With a 3 way product split. A321 Mint, Even more , ULCC seats.

Spirit would easily give B6 a nice LAS western focus city.

With B6 failure to get VX buying Spirit will be it's only smart move to gain more weight throughout the remaining US gateways.

Flyguy

Austin787 wrote:

I don't see JetBlue significantly changing its model anytime soon, but longer term almost anything is possible. That includes possibly becoming another ULCC - especially if Mr Baldanza becomes CEO in the future.

tphuang wrote:

So i see possibly 2 major influences from him.
1) voting for continued growth and building up of focus cities. Seems like he believes that and will support CEO in that direction
2) voting for greater segmentation. So if there is a push in the company for more a basic economy type of offering with no seat assignment and mileage earning, he is going to support that.

3) charging for seat assignments, drinks, snacks, and use of PTV
4) squeezing more seats onto aircraft
5) some cuts to Mint, making it more of a lie flat seat with basic service

A couple of things, he is not the CEO. He is not making decision like the ones you stated. As a board member, he is not involved in the day to day. I'm seriously question people actually understand what a regular board member does.

As for 5), mint is already far and away the lowest cost and best valued premium product there is. Nobody in their right mind would cut the greatest revenue generator inside their company. That doesn't even make sense.

Having said that, I think they can try squeeze in another row of seat in mint. Cut y to 32 inch like the rest of the fleet and convert 2 rows of EMS to regular economy. 165 seat mint config would have about the same CASM as 150 seat A320. Of course, they are going the other direction with A321LR. Robin has said for the longest time that he wants a larger mint cabin.

tphuang wrote:

So i see possibly 2 major influences from him.
1) voting for continued growth and building up of focus cities. Seems like he believes that and will support CEO in that direction
2) voting for greater segmentation. So if there is a push in the company for more a basic economy type of offering with no seat assignment and mileage earning, he is going to support that.

There's one more unfortunate skill he has. In addition to the fact that everywhere he has been lately was an ULCC, they have also been for sale.

Brought into Frontier board when they were having financial issues and were attempting to sell stock to raise cash
Brought into Spirit by Indigo to prep the company for sale.
Brought onto WOW board right before they announced they hoped to IPO or sell the company

So, that's another common thread...

tphuang wrote:

Austin787 wrote:

I don't see JetBlue significantly changing its model anytime soon, but longer term almost anything is possible. That includes possibly becoming another ULCC - especially if Mr Baldanza becomes CEO in the future.

tphuang wrote:

So i see possibly 2 major influences from him.
1) voting for continued growth and building up of focus cities. Seems like he believes that and will support CEO in that direction
2) voting for greater segmentation. So if there is a push in the company for more a basic economy type of offering with no seat assignment and mileage earning, he is going to support that.

3) charging for seat assignments, drinks, snacks, and use of PTV
4) squeezing more seats onto aircraft
5) some cuts to Mint, making it more of a lie flat seat with basic service

A couple of things, he is not the CEO. He is not making decision like the ones you stated. As a board member, he is not involved in the day to day. I'm seriously question people actually understand what a regular board member does.

As for 5), mint is already far and away the lowest cost and best valued premium product there is. Nobody in their right mind would cut the greatest revenue generator inside their company. That doesn't even make sense.

Having said that, I think they can try squeeze in another row of seat in mint. Cut y to 32 inch like the rest of the fleet and convert 2 rows of EMS to regular economy. 165 seat mint config would have about the same CASM as 150 seat A320. Of course, they are going the other direction with A321LR. Robin has said for the longest time that he wants a larger mint cabin.

I stand by my opinion, he will be a force pushing them away from being more like a legacy and toward being more like a ULCC. I'm not sure that is a bad thing. B6 has seemingly been in a race to be more like the legacies. That strategy has always struggled. All the other carriers who have attempted that either went bankrupt, changed strategies, or merged.

B6's biggest issue seems more to be that they have been unable to be anything more than a NY-Florida & Transcon carrier. It's possible BB was brought in to help develop a strategy that broadens their network. Especially as NEO's come along, he has experience serving Europe which they may be considering. There was a thread not so long ago about DL growing their Austin presence, I actually wondered if B6 could look to AUS as a means of growing the network some. I'd say DEN as well, but it's a pretty saturated market. Not sure where else they could build but they lack something in the middle to create more utility for their customer base.

enilria wrote:

tphuang wrote:

Austin787 wrote:

I don't see JetBlue significantly changing its model anytime soon, but longer term almost anything is possible. That includes possibly becoming another ULCC - especially if Mr Baldanza becomes CEO in the future.



3) charging for seat assignments, drinks, snacks, and use of PTV
4) squeezing more seats onto aircraft
5) some cuts to Mint, making it more of a lie flat seat with basic service

A couple of things, he is not the CEO. He is not making decision like the ones you stated. As a board member, he is not involved in the day to day. I'm seriously question people actually understand what a regular board member does.

As for 5), mint is already far and away the lowest cost and best valued premium product there is. Nobody in their right mind would cut the greatest revenue generator inside their company. That doesn't even make sense.

Having said that, I think they can try squeeze in another row of seat in mint. Cut y to 32 inch like the rest of the fleet and convert 2 rows of EMS to regular economy. 165 seat mint config would have about the same CASM as 150 seat A320. Of course, they are going the other direction with A321LR. Robin has said for the longest time that he wants a larger mint cabin.

I stand by my opinion, he will be a force pushing them away from being more like a legacy and toward being more like a ULCC. I'm not sure that is a bad thing. B6 has seemingly been in a race to be more like the legacies. That strategy has always struggled. All the other carriers who have attempted that either went bankrupt, changed strategies, or merged.

They've had one quarter in the past year where they are below average in profitability due to their practice of not hedging fuel cost and then fuel cost going up. Other than that, they were above average in margins every quarter recently. And RASM has gone up every quarter YoY other than last quarter due to shifting of Easter. I think this JetBlue in trouble narrative is a little overblown.

If they go in another direction, they are going to loose all the revenue generation power they have in New York, Boston and FLL. And their cost is too high to compete against ULCCs. They get same yield on FLL-SFO as UA and on FLL-LAX as AA does on MIA-LAX. And they are the yield leader on BOS-LAX/JFK-SAN against all the legacy competition. They get higher yield on JFK-CLT than AA. Why would they give up on this kind of revenue generation power to be ULCC?

tphuang wrote:

enilria wrote:

tphuang wrote:

A couple of things, he is not the CEO. He is not making decision like the ones you stated. As a board member, he is not involved in the day to day. I'm seriously question people actually understand what a regular board member does.

As for 5), mint is already far and away the lowest cost and best valued premium product there is. Nobody in their right mind would cut the greatest revenue generator inside their company. That doesn't even make sense.

Having said that, I think they can try squeeze in another row of seat in mint. Cut y to 32 inch like the rest of the fleet and convert 2 rows of EMS to regular economy. 165 seat mint config would have about the same CASM as 150 seat A320. Of course, they are going the other direction with A321LR. Robin has said for the longest time that he wants a larger mint cabin.

I stand by my opinion, he will be a force pushing them away from being more like a legacy and toward being more like a ULCC. I'm not sure that is a bad thing. B6 has seemingly been in a race to be more like the legacies. That strategy has always struggled. All the other carriers who have attempted that either went bankrupt, changed strategies, or merged.

They've had one quarter in the past year where they are below average in profitability due to their practice of not hedging fuel cost and then fuel cost going up. Other than that, they were above average in margins every quarter recently. And RASM has gone up every quarter YoY other than last quarter due to shifting of Easter. I think this JetBlue in trouble narrative is a little overblown.

If they go in another direction, they are going to loose all the revenue generation power they have in New York, Boston and FLL. And their cost is too high to compete against ULCCs. They get same yield on FLL-SFO as UA and on FLL-LAX as AA does on MIA-LAX. And they are the yield leader on BOS-LAX/JFK-SAN against all the legacy competition. They get higher yield on JFK-CLT than AA. Why would they give up on this kind of revenue generation power to be ULCC?

A couple thoughts on your comments...

When you bring in someone with a track record, even as a board member, people wonder. I don't think most would say they are in actual trouble but if a larger shareholder who is an activist investor got him appointed, it's because they want change. Remember when AA filed for bankruptcy, they had plenty of cash but the board forced the CEO's hand. Sometimes the board drives change. You make accurate comments on where they are, but I have read that Wall street is looking for more revenue growth, dividend growth etc. and a strategy that gets them there. Look at Southwest...Gary Kelly has been fighting wall street for years now on baggage fees. He's been able to show them how their strategy is driving revenue, etc so they stay quiet but they come back the next quarter and ask again because they just got off a call with AA/UA/DL or others hearing their ancillary revenue numbers so they have to ask. I think that's what you're seeing with B6. OK, that's great but what's next? And so far the answers maybe haven't satisfied people on the street sufficiently.

tphuang wrote:

I think this JetBlue in trouble narrative is a little overblown.

They are not in trouble. They want to do better. Everybody wants to do better. It's far from the same thing. Delta wants to do better. Are they in trouble?

Being more like a ULCC is not being a ULCC. There are steps they can take to cut costs and change their revenue strategy without going all the way. For example, B6 doesn't have a Basic Economy product. Does that mean AA is more like a ULCC than B6? In that area it does.

enilria wrote:

tphuang wrote:

I think this JetBlue in trouble narrative is a little overblown.

They are not in trouble. They want to do better. Everybody wants to do better. It's far from the same thing. Delta wants to do better. Are they in trouble?

Being more like a ULCC is not being a ULCC. There are steps they can take to cut costs and change their revenue strategy without going all the way. For example, B6 doesn't have a Basic Economy product. Does that mean AA is more like a ULCC than B6? In that area it does.

First, I 100% agree with your post.

JetBlue needs to look at revenue enhancement and cost reduction. Having a board member from an ULCC only makes sense.

B6 needs a basic economy. Yes, I disagreed in the past. The market has spoken different than my preference. B6 also needs to make even more space a true Y+. Sadly, this means many more seats per A320 and a few more per A321.

One cannot argue with market demand. I'm happy with how MINT has done.

Lightsaber

FWIW, I think what they did regarding the fare family rollout could be interpreted as ULCC-esque in how it unbundled elements of their base product. But because they owned the narrative and explained/marketed it very well, it didn't come off as punitive in the way that basic economy or first bag fees on the legacies did. If Baldanza does eventually push for more unbundling and monetization, I could see them doing so in the same, well-managed vein.

lightsaber wrote:

B6 needs a basic economy. Yes, I disagreed in the past. The market has spoken different than my preference. B6 also needs to make even more space a true Y+. Sadly, this means many more seats per A320 and a few more per A321.

One cannot argue with market demand. I'm happy with how MINT has done.

As a customer I hate Basic Economy and find it to be a scam, but frankly it's the gateway drug that sells ancillary. B6 can't have a lowest price that is more than the US3 and survive outside key markets like BOS, particularly when NK/F9 are both undercutting even Basic Economy. When the lowest fare menu looks like this...

NK $69
AA $114
B6 $138

...B6 is hosed even if the B6 product includes extra features. Southwest will also come to this conclusion. It's not as critical for them because they aren't seen in a side by side fare comparison on Expedia, etc.

enilria wrote:

usflyer msp wrote:

I get the impression B6 has more of revenue problem than a cost problem - I'm not quite sure how BBB helps with that. They need someone that specializes in revenue development.

Jetblue has a cost problem compared to ULCCs and a revenue problem compared to legacies.

I just wonder whether he was brought in to pull them closer to being a ULCC. FLL knowledge is great but as Spirit has said the problem is a lack of Int’l processing capacity. He can’t fix that.

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

enilria wrote:

I hate Basic Economy and find it to be a scam, but frankly it's the gateway drug that sells ancillary. B6 can't have a lowest price that is more than the US3 and survive outside key markets like BOS, particularly when NK/F9 are both undercutting even Basic Economy. When the lowest fare menu looks like this...

NK $69
AA $114
B6 $138

...B6 is hosed even if the B6 product includes extra features. Southwest will also come to this conclusion. It's not as critical for them because they aren't seen in a side by side fare comparison on Expedia, etc.

I mean, B6 has a nice load factor overall, so they are filling planes. The fact that they can price like this while still having good load factors is a positive thing for B6.

Keep in mind on NK, customers are going to pay an average of ~40$ for a carryon and $35 for a checked bag. So assuming they have one of each those fares turn into:
NK $144
AA $139
B6 $163.

Now which option looks better? $19 more to have an in-seat TV and not be in pain when you get off the flight? Yes please.

Of course the person without any bags will book NK for $69 - and they will end up losing money on that customer.

MKIAZ wrote:

enilria wrote:

usflyer msp wrote:

I get the impression B6 has more of revenue problem than a cost problem - I'm not quite sure how BBB helps with that. They need someone that specializes in revenue development.

Jetblue has a cost problem compared to ULCCs and a revenue problem compared to legacies.

I just wonder whether he was brought in to pull them closer to being a ULCC. FLL knowledge is great but as Spirit has said the problem is a lack of Int’l processing capacity. He can’t fix that.

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

The ULCCs have much better profits the JetBlue.

If the model works...

JetBlue must raise revenue. Unfortunately, in the market this means adding seats. Thanks to Sharklets and engine PIPs, JetBlue can perform TCON flights today with more seats.

I like something for nothing as a customer.

I so wish search engines allowed by true fare type. Since they compare basic economy to a better economy, people click accordingly. Airlines are trying to obscure fares. The travel sites are so poorly setup that I've reduced my use.

Until I may choose bags, dog in cabin, and minimum pitch, it has become more time efficient to go to a few airline sites.

Unless the fare is cheap on a favorite airline (JetBlue), I always compare DL and WN with all fees at a minimum. With DL and B6, sometimes I find upgrades too cheap to resist.

Lightsaber

MKIAZ wrote:

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

All the U.S. legacies except WN have adopted a ULCC type basic product. They are now rolling it out on intl long-haul. Doesn't seem to be going anywhere.

MKIAZ wrote:

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

There's a couple of factors you are missing. It's really all about fragmentation, fare matching, and connect cross-subsidization. Ancillaries and lower base fares are just a means to that end.

If three airlines offer the same product and all charge the same price (because they all match each other in those instances) the winner is the carrier with the most passenger loyalty which derives from product breadth and scope. i.e. the legacies.

If you can offer a price and not be matched you can not only erase the effect of passenger loyalty, you can get a disproportionate share of passengers. In a non-stop market that is enormously valuable. Let's look at some scenarios.

1) Everybody has the same product in a market like PHL-FLL:
AA: 100 passengers per departure @ $150 on 180 seat plane. 60 more connects at 50% prorate of $170 fare (connects are lower yield than nonstop). Total revenue onboard: $20,100. 89% LF
NK: 50 passengers per departure @ $150 on 150 seat plane. 30 more connects at 50% prorate of $170 fare. Revenue: $10,050. 53% LF
NK loses a crapton in this scenario. AA's passenger loyalty in PHL crushes them even with the same product.

2) AA has a normal product and NK has a ULCC product. I'm going to assume 1:1 revenue elasticity including fees which is low case in the industry.
AA: 50 passengers per departure @ $150 on 180 seat plane. 90 more connects at 50% prorate of $170 fare (connects are lower yield than nonstop). Total revenue onboard: $15,150. 78% LF
NK: 143 passengers per departure @ $75 on 150 seat plane + $30 of ancillary fees. 0 connects. Revenue: $15,015. 95% LF.
Total local market revenue is the same (in the real world it would probably grow significantly). AA loses their loyalty advantage because they are not priced equally. NK gets less per local passenger, but benefits tremendously by pushing out connect passengers. NK in this scenario makes tons of money because they are flying a smaller plane for the same money at lower costs as AA. In scenario 2 AA could also match NK which was the old strategy for dealing with ULCCs, but that scenario is a disaster for AA without the ancillaries to make up for the low fares. This is why AA/DL/UA had to add Basic Economy. And no, the economics of ULCCs are not stupid. People just don't understand that connect traffic is lower yield than the low fare locals being added to replace them. Locals are also cheaper because no bag transfer, etc. With AA/DL/UA implementing Basic Economy the results end up being in between #1 and #2 for both AA and NK.

lightsaber wrote:

MKIAZ wrote:

enilria wrote:

Jetblue has a cost problem compared to ULCCs and a revenue problem compared to legacies.

I just wonder whether he was brought in to pull them closer to being a ULCC. FLL knowledge is great but as Spirit has said the problem is a lack of Int’l processing capacity. He can’t fix that.

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

The ULCCs have much better profits the JetBlue.

If the model works...

JetBlue must raise revenue. Unfortunately, in the market this means adding seats. Thanks to Sharklets and engine PIPs, JetBlue can perform TCON flights today with more seats.

I like something for nothing as a customer.

I so wish search engines allowed by true fare type. Since they compare basic economy to a better economy, people click accordingly. Airlines are trying to obscure fares. The travel sites are so poorly setup that I've reduced my use.

Until I may choose bags, dog in cabin, and minimum pitch, it has become more time efficient to go to a few airline sites.

Unless the fare is cheap on a favorite airline (JetBlue), I always compare DL and WN with all fees at a minimum. With DL and B6, sometimes I find upgrades too cheap to resist.

Lightsaber

JetBlue and Spirit have had about the same profit for the past year. Only last quarter was Jetblue 2 to 3% off. So I don't agree ULCC is more profitable.

Now, I think they do need to add more seats. As I said, 6 more seats on A321 mint still works very well and is still best of class everywhere. They are already adding 12 seats on A320. I don't think they will add more to 200 seater A321 since that will mean an extra FA. And the CASM on that is already very good.

And don't forget they have the "giant casm killer" in E90 in their service. People wonder why their CASM is higher than WN now. E90 is a huge part of that. Of course, they also might need to outsource more support center work to cheaper places. A220 replacement would work great. These are short term time of pain until they can get these big moves sorted out.

If they really want to make be more profitable, drop Cuba flying.

tphuang wrote:

lightsaber wrote:

MKIAZ wrote:

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

The ULCCs have much better profits the JetBlue.

If the model works...

JetBlue must raise revenue. Unfortunately, in the market this means adding seats. Thanks to Sharklets and engine PIPs, JetBlue can perform TCON flights today with more seats.

I like something for nothing as a customer.

I so wish search engines allowed by true fare type. Since they compare basic economy to a better economy, people click accordingly. Airlines are trying to obscure fares. The travel sites are so poorly setup that I've reduced my use.

Until I may choose bags, dog in cabin, and minimum pitch, it has become more time efficient to go to a few airline sites.

Unless the fare is cheap on a favorite airline (JetBlue), I always compare DL and WN with all fees at a minimum. With DL and B6, sometimes I find upgrades too cheap to resist.

Lightsaber

JetBlue and Spirit have had about the same profit for the past year. Only last quarter was Jetblue 2 to 3% off. So I don't agree ULCC is more profitable.

Now, I think they do need to add more seats. As I said, 6 more seats on A321 mint still works very well and is still best of class everywhere. They are already adding 12 seats on A320. I don't think they will add more to 200 seater A321 since that will mean an extra FA. And the CASM on that is already very good.

And don't forget they have the "giant casm killer" in E90 in their service. People wonder why their CASM is higher than WN now. E90 is a huge part of that. Of course, they also might need to outsource more support center work to cheaper places. A220 replacement would work great. These are short term time of pain until they can get these big moves sorted out.

If they really want to make be more profitable, drop Cuba flying.

Cuba is a nice start! LGB finished off as well.

I do think they are forced to do Basic Economy. I call that moving toward a ULCC product, but as I said AA/DL/UA already moved toward a ULCC product. So, what is the big deal if B6 gets dragged into as well? B6 was also nearly last (WN) to add bag fees. They are slow to these product changes, although Mint appears to have been a great move.

enilria wrote:

So, what is the big deal if B6 gets dragged into as well? B6 was also nearly last (WN) to add bag fees. They are slow to these product changes, although Mint appears to have been a great move.

Because B6 right now is the best positioned to be a "premium" experience in ecomony. There is a huge chunk of people out there with good jobs, making good money, spending extra on premium experiences (like eating out at fancy restaurants taking vacations, nicer hotels ect). For these people paying for first isn't worth it, but at the same time the don't want to be stuck in basic economy or crammed in on spirit. The type of people paying for extra-legroom products.

I have to imagine they are looking at more than just on-board product changes. Much like adding mint, they have the resources to figure that stuff out. I have to imagine they are looking beyond that. The 220 might be a good way to help open additional markets on a cost effective basis and I have to imagine there's a desire to create more utility with another focus city of some sort.

Most of you are overreacting... he's just one seat on the board. He will likely not bring about meaningful change.

tphuang wrote:

lightsaber wrote:

MKIAZ wrote:

I think the ULCC business model is inherently flawed. I doubt Jebtlue will go down the path of ULCC.

Cramming 20% more seats on a plane and selling them for 50% of the ticket price of competitors can only work for so long. They are essentially making the seats a loss leader and making profit on ancillary fees. That's all good, but eventually your customers will realize that when they factor in ancillary fees they are paying almost as much as other carriers that have more legroom. And the customers who aren't paying ancillary fees will love it and keep flying for half the cost.

The ULCCs have much better profits the JetBlue.

If the model works...

JetBlue must raise revenue. Unfortunately, in the market this means adding seats. Thanks to Sharklets and engine PIPs, JetBlue can perform TCON flights today with more seats.

I like something for nothing as a customer.

I so wish search engines allowed by true fare type. Since they compare basic economy to a better economy, people click accordingly. Airlines are trying to obscure fares. The travel sites are so poorly setup that I've reduced my use.

Until I may choose bags, dog in cabin, and minimum pitch, it has become more time efficient to go to a few airline sites.

Unless the fare is cheap on a favorite airline (JetBlue), I always compare DL and WN with all fees at a minimum. With DL and B6, sometimes I find upgrades too cheap to resist.

Lightsaber

JetBlue and Spirit have had about the same profit for the past year. Only last quarter was Jetblue 2 to 3% off. So I don't agree ULCC is more profitable.

Now, I think they do need to add more seats. As I said, 6 more seats on A321 mint still works very well and is still best of class everywhere. They are already adding 12 seats on A320. I don't think they will add more to 200 seater A321 since that will mean an extra FA. And the CASM on that is already very good.

And don't forget they have the "giant casm killer" in E90 in their service. People wonder why their CASM is higher than WN now. E90 is a huge part of that. Of course, they also might need to outsource more support center work to cheaper places. A220 replacement would work great. These are short term time of pain until they can get these big moves sorted out.

If they really want to make be more profitable, drop Cuba flying.

I agree 100% here but same profit as in % or $ because B6 is twice the size of NK. If NK is making the same amount of money with half the fleet there is alot that can be improved than just what is listed above

I have dealt with BBB before. While he was at US Airways, he was responsible for the creation of a frequent flyer rights group called FFOCUS (Frequent Flyers Organized and Concerned about Unacceptable Service), which I co-founded. It was originally known as the US Cockroaches, for reasons which are better explained off line.
In August, 2002, he tried to change the Dividend Miles program so that only miles accrued on full fares would count toward elite status. We went from 7 original members to almost 300 in less than a week to fight this change, and were successful in a total of 10 days.
I was subsequently invited to join US' consumer advisory board, where I became friendly with many of their top execs, who actually wanted to hear from the customers. Then Doug Parker and his merry band of thieves happened, and the rest is history. I have had dealings with Doug and his team and they were for the most part customer unfriendly.

We have remained somewhat intact over the years, and in 2007 I engineered a mass defection of 300-500 frequent flyers over to Continental, which later morphed into United....costing US about $6-10M in revenue in one year....not much but enough to be noticed.

I actually like Ben and have a good deal of respect for him, but his views contradict mine on so many levels......so good luck JetBlue!!