I can see the handwriting on the wall. This move will case JetBlue troubles. It needs to stick to its original business plan. Look at what happened to Western Pacific. It had a great business plan by flying out of COS. It then moved to DEN and it ain't no more. JetBlue is profitable right now. However, it's growing too fast. It needs to slow down, and stick to its original business plan. David R > JetBlue Spices Up Its Fleet, > Ordering 200 Embraer Jets > > By SUSAN CAREY > Staff Reporter of THE WALL STREET JOURNAL > > > JetBlue Airways, a profitable, three-year-old discount airline that has > built its success on low costs and a single fleet type, said Tuesday it > placed an order for up to 200 regional jets from Brazilian maker Empresa > Brasileira de Aeronautica SA, also known as Embraer. > > The surprise announcement shows that JetBlue isn't a slave to the strategy > of low-fare king Southwest Airlines, which has famously hewed to a single > type of plane for three decades. The move by the New York-based start-up > also could change the economics of short-hop flying by putting pressure on > the commuter affiliates of the major airlines, which now serve many of the > smaller routes from the big airlines' hubs with relatively high costs. > > JetBlue said it is the launch customer for the Embraer 190, a 100-seat > regional-jet model just developed by the Brazilian company, and that it has > placed firm orders for 100 planes and taken options on 100 more. If the > options are exercised, the order would have a list price of $6 billion ? > although it is thought that JetBlue is getting the planes for much less. > Lease financing has been arranged for the first 30 deliveries. The new jets > will start entering JetBlue's fleet in 2005 at a rate of about 18 per year > and could vault the carrier's total fleet from 42 jets today to 290 by 2011. > > "We're basically kicking up our growth," said David Neeleman, JetBlue's > founder and chief executive officer. > > When JetBlue got off the ground, it said its strategy was to focus on > point-to-point service to large cities with high average fares or highly > traveled markets that are underserved. And it did that, primarily from New > York's Kennedy Airport and more recently from Long Beach, Calif., with a > fleet of Airbus A320 jets, which can fly coast to coast with 162 seats in an > all-coach layout. But now that the airline has established itself on some of > those heavy routes, it plans to start service to more when it takes delivery > of the additional 111 A320s it has on firm order. > > Mr. Neelemen said that more than a year ago the company started studying > midsize domestic markets, which are much more numerous but currently lack > meaningful low-fare service. To date JetBlue has concentrated on routes that > can support about 600 passengers a day in each direction. To be able to > profitably jump into routes that currently attract just 200 or 400 > passengers a day would be "a real sweet spot," representing more than 900 > new potential markets, Mr. Neeleman said. > > Many of those smaller routes are served by commuter carriers flying on > behalf of the major airlines. Their planes are smaller and the costs to > operate are high, so the fares tend to be high. Mr. Neeleman said that > because the Embraer 190s will have 100 seats and will be flown hard by > JetBlue pilots paid less than their colleagues who operate A320s, his > company should be able to offer lower fares and still turn a profit on the > smaller routes. The cost to fly the Embraer 190 on a 600-mile trip will be > only $6 more per seat than the A320, he said. > > The new planes actually will have wider seats or aisles than JetBlue's > A320s, he said, and will provide ample legroom and two-by-two seating. They > will carry JetBlue's trademarks, leather seats and DirecTV programming at > every seatback. JetBlue hopes to stimulate new traffic on these smaller > routes. But the math didn't work "until this plane was developed," he said. > > Mr. Neeleman wouldn't say where he plans to deploy the new regional jets, > just as the company is coy about destinations for its A320s. But he offered > that some of JetBlue's existing smaller routes, such as to cities in upstate > New York and to Burlington, Vt., could be in line for four to five Embraer > 190 roundtrips a day to New York, instead of two daily Airbus trips. He said > there are opportunities in the Mid-Atlantic, the Midwest and New England, > and also to secondary cities in Florida. > > In 1999, before JetBlue actually began flying, the company said it was > considering service to 44 cities from New York. It currently is in only 18. > With the Embraers, which can fly 2,100 nautical miles, it is expected > JetBlue will more quickly fill in its network by serving some of those > cities. They include Charlotte, N.C.; Cleveland; Dallas, Grand Rapids, > Mich.; Memphis; Milwaukee; Pittsburgh; and Richmond, Va. Besides pioneering > new routes, the Embraers could be used to provide additional daily service > on A320 routes. "It gives us tremendous flexibility," Mr. Neeleman said. > > JetBlue, unlike most U.S. airlines, was profitable in 2001, 2002 and in the > first quarter of this year. In April it placed a big follow-on order for as > many as 115 A320s and Mr. Neeleman said its A320 fleet will continue growing > as planned. > > Write to Susan Carey at susan.carey@xxxxxxx > > Updated June 10, 2003 10:45 a.m. > > > > > Best regards, > > Will S. Randall II > will_randall@xxxxxxxxxxx > gte439u@xxxxxxxxxxxxxxxx > https://www.prism.gatech.edu/~gte439u/ > AIM: goyaARGENTINA > > _________________________________________________________________ > STOP MORE SPAM with the new MSN 8 and get 2 months FREE* > http://join.msn.com/?page=features/junkmail