I have been anxiously awaiting JetBlue's
Today, Motley Fool Stock Advisor recommendation JetBlue announced the first routes it's going to fly using fellow Stock Advisor pick Embraer-EmpresaBrasilier
JetBlue is trying something legacy airlines have not been willing to do -- put the corporate bread-and-butter logo on non-Boeing
JetBlue is trying to match capacity to demand. Flying smaller planes during non-peak times or to second-tier markets, of course, makes sense. JetBlue is betting it will make cents, too. As promised, JetBlue did pick second-tier cities for new routes. The business centers of Austin, Texas, and Richmond, Va., will be getting a combined total of seven round-trip flights every day.
To the extent that JetBlue's foray represents an endeavor into markets with adequate demand, use of the smaller Embraer planes make excellent sense. The idea is simple -- they'll find themselves better able to operate their planes at capacity from a cost standpoint, enabling higher revenue per seat and better marginal coverage of costs.
The question everyone is looking to answer is this: Will JetBlue customers see the new planes, with their leather seats, 100 channels of XM
The 100-seat planes have to be a success. While JetBlue will take delivery of 16 A320's in 2006, the company is also currently taking delivery of the Embraer aircraft at the rate of one every 20 days (or 18 in a year). JetBlue, with debt to equity at a jaw-dropping 252%, has little wiggle room to attract customers with the new planes.
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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Click here to see The Motley Fool's disclosure policy.