Well then Boo Boo, share with us all your insight . Did APA specifically comment on Nic and SLI potentially using a Nic list?
Be honest now, no dodging the Question. If know zip, then be forthcoming .
FA
Dave Bates has an obligation to look at every option APA has for its members going forward. I can tell you every correspondence I've seen references B6 and AS. When LCC comes up, a lots of eyes roll, even my reps. They're well aware of the train wreck LCC is, and is well versed on what LCC
DOESN'T do for us
We know LCC is going to make an offer. LCC has to. Absent a merger with AA, Dougies future dims rapidly. Dave Bates should have a look at what will be on the table from all parties. There will be at least four in total.
Meanwhile, the latest about jetBlue:
Ten years ago this week, JetBlue Airways (JBLU) staged a festive initial public offering at the Nasdaq marketplace in New Yorks Times Square. Although September 11 had plunged the airline industry into record losses, the then-two-year-old carrier was the envy of its peers. Out of the gate, it was funded by venture backers and strategically hubbed at New Yorks John F. Kennedy International Airport. It boasted brand-new, leather-seat-equipped Airbus A320s and fanatically loyal customers drawn to its free in-flight TV and help-yourself snacks. Its low costs and tight-knit company culturefounder and Chief Executive Officer David Neeleman could often be seen helping flight crews vacuum planes between runsseemed set to reinvent the industry. JetBlue stock soon tripled as larger rivals Delta Air Lines (DAL) and United Airlines rushed (unsuccessfully) to launch their own cheery, low-cost spinoffs.
With founder Neeleman long gone and shares 80 percent off their high, JetBlue now finds itself bereft of much luster. A JetBlue pilots midair meltdown on March 27 was the latest in a string of very public mishaps, starting with passengers getting stranded on a plane for up to 11 hours during a February 2007 ice storm and a flight attendant bolting the planes exit chute after cursing passengers in August 2010. JetBlue now ranks last among 15 airlines in on-time performance and ninth in customer complaints to the Department of Transportationthree times Southwest Airlines (LUV) complaint ratio. The tables have turned. A vastly consolidated airline industry once again favors major carriers with expansive route maps and a preponderance of business travelersthings JetBlue lacks.
JetBlue isnt immune to the industrys bane: soaring fuel costs. Ten years ago jet fuel cost an average of 71 a gallon; JetBlue now pays an average of $3.15. Higher fuel costs represented 71 percent of its yearly increase in operating expenses. Spokeswoman Allison Steinberg says part of the jump was due to more people flying on JetBlue at a time when its fuel costs surged 30 percent in a year.
That practice of adding flights and routesthus incurring more operating and capital expenseswhile the rest of the industry is shrinking to cope with fuel costs is what bothers Dahlman Rose analyst Helane Becker.
JetBlue increased its capacity by 7 percent last year, as it continued to add routes attractive to higher-fare corporate fliers. Were concerned about their expansion into the business traveler, Becker says. JetBlue started as the airline for the New York leisure traveler. They dont have the route structure or the miles to compete with the majors for business dollars. JetBlues Steinberg says the airline is making headway among business fliers, especially in Boston, its fastest-growing market.
Thats a switch from JetBlues initial focus on leisure travelers and service to less-crowded airports from its hub at JFK. But during much of the recession, whenever a major carrier retrenched somewhere, JetBlue would quickly target expansion opportunities. It now plans to have 45 nonstop routes out of Boston by next month, and its expanding service out of San Juan. As American Airlines began dismantling its San Juan hub in 2008, JetBlue has added 11 new nonstop flights from Puerto Rico to Florida, the Northeast, and other Caribbean islands. Some analysts say that expanding this way in spite of soaring fuel costs is a risk.
J
etBlue remains profitable, having posted net income of $86 million last year, ending 2011 with about $1.2 billion in cash and short-term investments. George Ferguson, senior airline analyst at Bloomberg Industries, also notes the carrier has managed to retain the industrys lowest costs. But JetBlue cant quell investors worries that it seems destined, despite its new routes, to remain a small player in a business where size matters. Indeed, its bottom line represents a sliver of the $800 million-plus that far larger Delta and United Continental Holdings (UAL) each netted last year.
Profits arent the only disparity. A decade of mergers, alliances, and bankruptcies has let the majors get bigger, offer more choices to frequent fliers, cut wages, and take out thousands of seats and redundant gates and routes. US Airways (LCC) and America West have merged, as have United and Continental and Delta and Northwest. Even go-it-alone Southwest, Neelemans alma mater and the model for JetBlue, nabbed routes from liquidated carrier ATA and acquired AirTran Airways.
JetBlues route network, meanwhile, has no big code-share alliances, nor does it have the kinds of revenue-sharing opportunities other carriers have forged. Lufthansa (LHA) did buy 19 percent of the airline in December 2007. But the German carrier in March announced its intention to raise money by selling convertible bonds linked to its JetBlue stake, which could trim the holding by 2017.
With the industry so thoroughly merged and allied, the question is whether JetBlue can remain independent now that rivals have bulked up. Because of congestion in the New York area, JFK is limited in how many takeoffs and landings are permitted each hour. JetBlues slot dominance thereits the largest domestic carrier, with 150 daily flightswould be a key asset for a potential acquirer. JetBlues Steinberg responds that CEO Dave Barger recently reiterated at an industry conference that the carrier intends to grow organically and independently. Still, Roger King, an airline analyst with research firm CreditSights, says JetBlue could be particularly appealing to American or Delta, carriers that boast plenty of international flights into JFK but not the complementary domestic traffic United Continental enjoys at its Newark trans-Atlantic hub.
If now-bankrupt American reorganizes successfully and Delta senses a competitive threat in New York, both carriers might try to woo JetBlue, says William Swelbar, an aviation researcher at Massachusetts Institute of Technology and Hawaiian Airlines (HA) director. On some routes, American already has frequent-flier reciprocity with JetBlue and is likely to expand its code-sharing after its bankruptcy. An acquired JetBlue, he says, could benefit as a unique brand within a larger airline. What makes JetBlue kind of hard to integrate is that its got its culture, its got its cult following. And to desert that does damage to the very franchise that youre looking to buy. Indeed, JetBlue is the only four-star-rated domestic carrier on Skytraxs airline rankings. Ferguson, however, says thats only worth so much these days: At the end of the day, its a bus ride in the air.
The bottom line: JetBlue, which went public 10 years ago, has stayed small while rival airlines grew via consolidation. That could hurt it more than help.
Hmmmmmm... Does B6 help AA more than LCC? Looks like a merger with AA could help them out!
