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In seardh of profits........



"While 2006 is expected to be an unprofitable year for six-year-old JetBlue, the discount carrier aims to minimize the red ink by flying more short-haul routes (to save on fuel), serving airports with fewer rivals and raising fares."


How is flying short-haul routes going to save on fuel? If utilization is kept up, it will mean more take-offs and climbs; higher fuel flow than cruise. Short-haul also usually implies lower cruise altitudes, also higher fuel flows. While an airplane sitting on the ground isn't burning any fuel, it also isn't producing any revenue. I can see a possibility for higher revenue on the short routes, but not lower fuel on a seat-mile basis.
 
I know - doesn't it drive you crazy when a reporter either doesn't know anything about what he's talking about or just enough to be confused...

Presumably, it's talking about segment fuel burn since that would be less on the shorter route. And presumably the higher per seat-mile fuel cost (as well as other higher costs on a seat-mile basis) would be offset by higher yield.

For example, in 3Q05 the average yield between JFK and OAK was 8 cents while between JFK and PIT was 65 cents. Using those and assuming the same number of passengers, a flight between JFK and either would generate about the same passenger revenue but the flight to PIT would cost less to operate (and burn less total fuel)

Jim
 


The next few quarters will certainly be interesting to watch.

Sounds like Needleman has watched US Airways' old slides re traffic east of the Mississippi.

Do they have enough business travelers who would rather fly on the E190 vs a 50 seater from US Airways Express?

And would these same business travelers prefer JFK to PHL?

The short haul can be very profitable, just look at Southwest and US Airways. Again, flying Moms and Pops to Florida/West Coast might be sexy, but flying business travelers to BUF/RIC pays the bills...

Lastly, but not least, Needleman needs to slow down the expansion, though infrastructure spending coming up the next few years might require a certain "size" airline.

SoftLanding
 

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