JetBlue concedes on flight slots

[Management Guru]

Thread title is the headline from today''s Long Beach newspaper. It appears that AA will get to keep the 4 slots they were told were temporary, meaning that JetBlue will end up with 4 fewer flights at its planned LGB peak.
JetBlue concedes on flight slots
http://www.presstelegram.com/news/articles...02/30/new02.asp

 

[AirplaneFan]

I wonder why JBLU conceeded those 4 slots? JBLU is obviously doing well at LGB. Did LGB mgmt cave to AA when they were told that if they weren't given 4 slots they would file suit to overturn the 41 slot restrictions.

 

[AAmech]

I think you hit the nail on the head! I don't think LGB wanted to risk having their slot system tested in court and possibly overturned.

 

[Diesel8]

Actually, I think LGB just did not feel like spending thousands of dollars on fighting with AA.

In the end they, City of LGB, would probably have won, but why waste the money! So they probably appproached JBLU and made a deal.

 

[KCFlyer]

In the end they, City of LGB, would probably have won, but why waste the money! So they probably appproached JBLU and made a deal.

And, IMHO, much to JetBlue's relief.

 

[lowfareair]

JetBlue did what would be the best outcome in court. There was a chance that the flight issue may have gotten taken away, or they might have increase the number of flights from 41 to 51, for example. That would give AA the chance to grab more slots and start up MIA, more JFK, and possibly others.

 

[Jeff G]

IMHO, JetBlue is making a good will gesture to LGB to get them (LGB) out of a tight political bind. They're saying, hey guys, we're going to be around for the long haul and we really want a good long term relationship. So here, we'll make an agreement that will keep you out of court, remove the possibility that the FAA will eliminate the noise agreement, and also keep your residents (voters) happy. And next time (there's always a next time), you guys can remember that we're bringing in a lot of local business and employment, and that we play ball when it gets tough. Quite a bargain for four slots. Four unprofitable (for AA) slots. Not ideal, but not shabby maneuvering either. When you're small, it's better to make some sacrifices than go for 15 rounds.

 

[Jeff G]

----------------
On 8/31/2002 12:09:56 PM

I suspect JB's unethical relationship with the airport board member would have rendered their position untenable in any legal proceeding as well.
----------------

Not sure if it was actually unethical. It sure had the appearance of impropriety, which is bad enough. Has anything come out on this lately, or heard the definitive word on any legal action?

 

[AAmech]

----------------
On 8/31/2002 5:41:37 AM

Actually, I think LGB just did not feel like spending thousands of dollars on fighting with AA.

In the end they, City of LGB, would probably have won, but why waste the money! So they probably appproached JBLU and made a deal.
----------------

Another good reason for settling.

 

[Rhino]

I suspect JB's unethical relationship with the airport board member would have rendered their position untenable in any legal proceeding as well.

 

[Rhino]

I think it was clearly unethical, though perhaps not illegal.

 

[Diesel8]

Now of course the 64K question? Is AA making money in LGB, seeing that they are matching JBLU fares? Are they drawing their own pax away from higher yeild LAX?

If the answer to the first question is no, then how long before they decide to pull up stakes and how will the public, and future cities AA might conduct business with, view this? Could be a backlash!

Has AA painted themselves into a corner?

 

[G4G5]

No,

From everything I have seen, heard and read. LGB is doing much better then expected. This is evident by the fact that the loads are high and the frequency to LAX has not changed. No need to question the economics of the 757-200.

I would be surprised if AA was satisfied with just 4 slots. Flts to MIA and IAD would be something to look for in the future. The shark smells blood and the lawyers are on retainer.

 

[pilotbob3]

i wonder what is next for jetblue's growth?

 

[Jeff G]

----------------
On 8/31/2002 11:07:35 PM

i wonder what is next for jetblue's growth?
----------------

JetBlue's growth appears to take on a seasonal pattern. From about April to October, the emphasis is on building up transcon or sometimes new city flying. From October to April, new aircraft are added to north-south routes, mostly NY to FL. There is some pullback of these added routes toward the end of the season, after spring break, and the additional aircraft are used to inaugurate some transcon or new city flying and the cycle begins again. This has the effect of avoiding one of the big problems with airlines that largely have either north-south or east-west flying, namely seasonality. This way the assets are always in use and aren't nonproductive for a significant portion of the year.

Look at it historically and you can see about how it works:
Winter 00: Start operation, BUF and FLL. Add other FL cities and ROC shortly.
Summer 00: Start transcons to OAK, ONT, SLC and DEN (redeyes). Start BTV, SYR.
Winter 01: Add MCO, RSW, TPA, PBI, FLL flying
Summer 01: Pullback seasonal FL flying. Start MSY, SEA, LGB. Increase freqs to OAK (day flying)
Winter 02: Large expansion N-S (12 dailies to FLL, etc.)
Summer 02: Pullback seasonal FL flying. Add IAD, SJU, fill LGB slots by adding OAK, LAS flying. More freqs to OAK, LGB.
Winter 03: Another large increase in FL flying (16 dailies to FLL, 8 to MCO, etc)

Can expect:
Summer 03: Pullback seasonal FL flying. Use these aircraft to add a new city or two and/or convert some of the LGB shorthauls to longhauls.

Winter 04: Expand in FL

etc, etc.

Just keep this pattern in mind when you see a message (about every six months or so) that JBLU is being chased out of a route. The mix is constantly changing to optimize limited assets. Maybe if we had 600 planes we could afford to camp out on a money losing or overserved route, but we can't do it with 30.