If you trust the visibility report from the cockpit, you probably saw this coming. Wall Street darling JetBlue
Discounted carriers running light in terms of overhead cargo are starting to clog the formerly friendly skies, and while that's great news for you as a traveler, it's not a welcome event for JetBlue. The edgy airline is blaming the California wildfires, in part, for a dip in operating margins, but we all know that it's the popularity of discounting rivals that's really heating up.
As unfortunate as the Southern California blazes were, they actually didn't make much of a dent as the company's load factor last month rose to 81.6% from a 79.3% showing a year ago. Yes, the fires were pretty much a late October event, under control as the month started, but if you still see smoke it, just might be the company trying to throw off the damaging impact of its fellow low-cost carriers.
Just as Southwest
But succeeding, with profitability in a sector grounded with deficits, proved to be the beacons that lit up the landing strip for the competition. Delta
AirTran's penchant for a flexible multitasking workforce produced labor costs that ran just 29% of the carrier's operating expenses last year. Southwest, on the other hand, was at 39%.
That doesn't mean JetBlue is doomed. Far from it. The company's capacity, as measured by available seat miles, has grown by 53% over the past year. However, it does mean that the competition can no longer be ignored. Everyone knows that the key to making a business model fly in the airline sector these days is to offer low fares on a low-cost structure. It's not rocket science.
Well, actually, I guess it is.
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