On 8/20/2002 1:42:50 AM
Uh oh, this is probably a sign that jetBlue may not be with us in the near future.......
I'd give them 6 months, then bye-bye.
Lessee...the stock drops 10% and you forcast doom? In that case, none of us are going to be around in six months...
On 8/24/2002 1:43:47 AM
Is it true that Jet Blue only pays intrest only on their Airbi? Is it true that they have a "modest" balloon payment on aircraft leases after a term of 5 years? Is it true that they amortize their equipment for 30 years (will an airbus last that long?)? Did their CEO sign off on all of this? Inquiring and contrarian minds want to know!
Jet Blue does not own any aircraft... they are all under long-term lease with Airbus with favorable rates. I believe (don't know) that JBLU has a lower payment schedule during the first few years then they increase (balloon) over the duration.
Jet Blue will not have teflon protection from the downturn in the market... its just a matter of time.
The low wages, non-union, and happy employees will eventually turn "ugly" when they see profitable quarters and now real wage increases (110/hr for an airbus captain is over 35-40 percent below the majors). Eventually these aircrew will want more money... kinda like SWA.
In addition, eventually these "new" airbus will get old and start needing repairs... which are not cheap (parts or mechanic payments) by any stretch.
I think you will see the CEO of Jet Blue "run with the money" when he knows the good years are gone (first 3-5) years. JMHO.
JBLU - Aircraft Costs Will Increase as We Expand and Financing is a Problem: We typically finance our aircraft through either mortgage debt or lease financing (JBLU owns less than 10 aircraft... lease the rest at variable interest rates).
No doubt you are the first ever to realize that airplanes get older as they age. And sometimes need repairs. That never happens at other airlines. Want to be a consultant?
JBLU - We may be subject to unionization, work stoppages, slowdowns or increased labor costs: Unlike most airlines, we have a non-union workforce. If our employees unionize, it could result in demands that may increase our operating expenses and adversely affect our profitability. Each of our different employee groups could unionize at any time and require separate collective bargaining agreements. If any group of our employees were to unionize and we were unable to reach agreement on the terms of their collective bargaining agreement or we were to experience widespread employee dissatisfaction, we could be subject to work slowdowns or stoppages. In addition, we may be subject to disruptions by organized labor groups protesting our non-union status. Any of these events would be disruptive to our operations and could harm our business.
JBLU - We have a significant amount of fixed obligations and we will incur significantly more fixed obligations which could hurt our ability to meet our strategic goals: