Switching to Short Haul?

nycbusdriver

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Dec 19, 2002
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This is a USAirways post despite the article's subject being JetBlue. I am commenting how JetBlue's tune of deferring aircraft deliveries sounds oh-so-very familiar to those of us who have endured US/East management fiascos for the past 17 years or so.

But switching to more short haul and deemphasizing long haul markets? What's Neeleman on?

Article on Justplanenews.com:

Fuel costs force JetBlue
to cut growth plans


JetBlue on Tuesday said it had scaled back its growth plans as rising fuel costs dragged the low-fare US airline to its second consecutive quarterly loss.
The airline plans to sell some aircraft and defer deliveries as it shifts more capacity to short-haul flying from longer transcontinental markets, and will introduce new efforts to cut costs as crude oil pushes above $75 a barrel.
 
If they can keep the a/c utilization up on the shorter haul, it's a pretty good strategy. Average yield NYC to the west coast is about 8 cents (3Q05) while NYC-PIT is 82 cents, NYC-RDU is 37 cents, and NYC-CLT is 40 cents.

Sure, costs will be higher (maybe 1.0 - 1.5 cents just due to distance) but not nearly as much as yields even if they underprice the current carriers.

Jim