- Dec 5, 2003
- 21,709
- 10,721
http://www.thestreet.com/story/12840104/1/note-to-jetblue-please-dont-change--just-drop-money-losing-flights.html?puc=yahoo&cm_ven=YAHOO
"McAdoo said his list of proposed changes would add as much as $550 million to the base pretax income of $279 million. He recommends adding a first bag fee, which would result in an estimated $150 million to $200 million in annual revenue and adding seats, which could add $250 million to annual pretax income.
"Additionally, he recommends cutting unprofitable routes ---primarily trans-continental routes and routes from Boston. Flights to/from and along the West Coast corridor are generally unprofitable and have been for several years, McAdoo wrote. In addition, contrary to the comments in most quarterly earnings reviews, quite a number of the Boston domestic markets, including only those that have been in system for over a year, generate seven-figure losses annually.
"JetBlues top 10 money losers include Boston to Dallas, LAX, Phoenix, Washington National, Charlotte, Buffalo and Seattle, which annually lose between $3 million and $7.4 million each. Additionally, trans-con flights from Fort Lauderdale and Dulles to San Francisco, Los Angeles and Long Beach lose between $4.2 million and $6.6 million annually."
and
"On the July earnings call, analysts raised questions about adding seats and and bag fees, and JetBlue executives offered vague answers.
"Stifel Nicolaus analyst Joseph DeNardi wrote that JetBlue shares have been rising, driven by the belief that JetBlue President Robin Hayes will replace Barger in 2015 and that “Mr. Hayes will enact a more shareholder-friendly business plan [including] a first bag fee and higher seat density. "
"McAdoo said his list of proposed changes would add as much as $550 million to the base pretax income of $279 million. He recommends adding a first bag fee, which would result in an estimated $150 million to $200 million in annual revenue and adding seats, which could add $250 million to annual pretax income.
"Additionally, he recommends cutting unprofitable routes ---primarily trans-continental routes and routes from Boston. Flights to/from and along the West Coast corridor are generally unprofitable and have been for several years, McAdoo wrote. In addition, contrary to the comments in most quarterly earnings reviews, quite a number of the Boston domestic markets, including only those that have been in system for over a year, generate seven-figure losses annually.
"JetBlues top 10 money losers include Boston to Dallas, LAX, Phoenix, Washington National, Charlotte, Buffalo and Seattle, which annually lose between $3 million and $7.4 million each. Additionally, trans-con flights from Fort Lauderdale and Dulles to San Francisco, Los Angeles and Long Beach lose between $4.2 million and $6.6 million annually."
and
"On the July earnings call, analysts raised questions about adding seats and and bag fees, and JetBlue executives offered vague answers.
"Stifel Nicolaus analyst Joseph DeNardi wrote that JetBlue shares have been rising, driven by the belief that JetBlue President Robin Hayes will replace Barger in 2015 and that “Mr. Hayes will enact a more shareholder-friendly business plan [including] a first bag fee and higher seat density. "
