Cranky Weekly Review Presented by Oakland International Airport: JetBlue is Feeling Blue, Southwest Looks Toward its White Whale

Cranky Weekly Review

JetBlue? More Like JetRed

JetBlue Airways released its Q3 earnings – or lack thereof – this week, as the carrier announced a loss of $153 million on $2.4 billion in revenue.  It’s never good when the first words in a press release are a quote from the CEO saying “While we faced challenges in the third quarter…” but that’s just how JetBlue’s earnings report began.

Revenue was down 8.8% year-over-year while unit costs dropped 3.3%.  Capacity went up by 7% during the quarter which doesn’t help if the seats aren’t being sold.  All told, it could have been worse – it spent 18% less on fuel this quarter than 2022 and it saw a modest increase in non-passenger revenue.

JetBlue did manage to pay down $254 million on outstanding debt and lease payments and it ended the quarter with $1.5 billion in unrestricted cash, most of which is expected to be spent on bringing in lunch for its lawyers as its trial with the DOJ continues in the coming weeks.

Southwest Considers Crosstown Move

Southwest COO Andrew Watterson confirmed this week that the carrier has inquired about gate space at Dallas/Fort Worth’s new Terminal F which is scheduled to open in 2026.

The Five Party Agreement that followed the end of the Wright Amendment prevents Southwest from operating to or from DFW, but that expires in 2025. This gives Southwest the chance to do what once seemed unthinkable and operate from a Dallas-area airport other than its beloved Love Field.  Terminal F is expected to cost about $1.6 billion to build, and it will have 15 gates. One potential issue is that none of those 15 gates are planned to have Southwest’s numbered boarding poles, and an American spokesperson adamantly insisted that adding them couldn’t possibly be squeezed into the $1.6 billion budget.

A representative from DFW confirmed the airport has had preliminary discussions with Southwest about potentially moving into the airport to operate a moderate number of flights.  The representative was immediately shot on-site after making the statement confirming the talks, with AA CEO Robert Isom seen fleeing the scene with a literal smoking gun.

JetBlue and DOJ Get Started

The much-anticipated battle between JetBlue and the Department of Justice over the former’s acquisition of Spirit finally got underway this week, with the case fittingly beginning on Halloween.

The merger between the two airlines was announced in July 2022, after a rocky courtship in which Spirit tried desperately to stave off JetBlue and merge with Frontier, only to eventually give up and acquiesce to JetBlue’s ever-increasing offer.  The DOJ immediately said it would challenge the deal in court, and that day has finally come.

JetBlue suffered a defeat in court to the DOJ this May when its Northeast Alliance with American was struck down – a decision that ironically could help JetBlue in this suit. The DOJ says the merger would be bad for consumers, which proves our thesis that no one from the federal government has ever flown Spirit before.  The DOJ says they overlap on too many routes, and it would harm competition, while JetBlue says the merger is the only thing that will allow it to continue to challenge American, Delta, Southwest, and United.

The case is expected to take several weeks, and if JetBlue has anything to say about it, will be delayed multiple times, and potentially canceled at some point, requiring everyone to come back the next day to try again on the same plane in the same courtroom.

Allegiant Ends Q3 Down $18 Million

Allegiant finished the three months ending September 30 down $17.9 million on $565 million revenue, both an improvement from a year ago.

In 2022’s Q3, Allegiant lost $31 million on $560 million of revenue, making this year’s $18 million loss look quite good. The airline, which is so much more than an airline, brought Maury Gallagher back as CEO this summer and expects its Sunseeker Resort to open December 15. Sunseeker could be called Sunsucker based on how much money its sucked out of the company so far, but apparently Allegiant is convinced when people think about a fun vacation, they think that Allegiant is who they want running their resort.

The $565 million in revenue is the highest third quarter number in company history, and it comes on an average fare of $129 and an average ancillary take of $71.80 per passenger. Four-hundred seventy-eight thousand customers signed up to join its Allways loyalty program during the quarter, confirming the old adage that there’s a sucker born every minute. Allegiant ended the quarter with $1.3 billion in cash, most of which is tied up in helping the Raiders pay their two fired head coaches until those contracts expire, with another chunk focused on pushing their new marketing campaign “At least we’re not doing as badly as JetBlue.”

Delta Expects Limited Layoffs

Delta Air Lines is laying off some corporate employees as it tries to cut costs.  The carrier, which announced a $1.1 billion profit for Q3 will be enhancing its organizational structure in what it called a “small adjustment” to corporate and management positions.

Delta did not say how many jobs it expects to cut, but it’s expected those employees with the lowest MQD spend can expect to feel the brunt of the changes, although those that have a Delta-branded American Express card can know their job is likely safe.

The airline did lower its full-year profit outlook due to rising fuel costs and drop in Biscoff futures.  It projected that fuel costs would raise its expenses nearly $400 million for the second half of 2023, with these job cuts expected to offset some of the increase.

  • Air Canada is connecting Canadians who want to escape the cold and travel to…checks notes…Stockholm with 3x weekly flights from Montréal and 2x weekly from Toronto beginning next summer.
  • Bahamasair is headed back to Raleigh/Durham.
  • Cubana might be adding new airplanes. Stay tuned for more.
  • Delta‘s Concourse A expansion at Salt Lake City was completed. The airline and airport celebrated by breaking a bottle of non-alcoholic apple cider over one of the new gates and then celebrated into the night with Diet Sprite and Heineken 0.0s.
  • Edelweiss is taking over an A320 from SWISS.
  • El Al is suspending service to Delhi, Dublin, Marseille, Mumbai, and Tokyo/Narita.
  • Etihad is returning to Kenya.
  • Finnair turned 100.
  • Flair wants to fly more to the United States.
  • Frontier is finally bringing fine dining back to the skies.
  • Hillwood Airways, which apparently is a thing, is changing its name to Eastern Air Express after being purchased by Eastern Airlines.
  • Icelandair is headed to the Steel City with 4x weekly flights beginning May 16.
  • Iraqi Airways is resuming service to both Denmark and Germany.
  • ITA‘s first A321neo came out of the paint shop and will be ready to enter service by the end of the year. It would have been ready sooner, but the carrier didn’t wait for the paint to dry before it took it out for a spin, which led to it needing to be painted again.
  • JetBlue was told there’s no room at the inn by Schiphol Airport for next summer.
  • Korean‘s merger with Asiana is looking better.
  • LATAM‘s first flight to Atlanta operated this past Sunday.
  • Lufthansa is ordering airplanes.
  • Norse Atlantic says it earns more ancillary revenue than any other airline which is a strange thing to brag about.
  • Qantas is ending the Melbourne-Perth part of Melbourne-Perth-London/Heathrow, making the Dreamliner service Perth to London only.
  • Qatar earned a $1 billion profit on $11 billion in revenue for the six months ending September 30.
  • Ryanair lost in court. They’ll likely take the loss quietly and not appeal or anything.
  • SAS completed a sale and leaseback on two A320neos.
  • SpiceJet peppered its winter schedule with 44 new fights.
  • Spirit is done in Denver.
  • Starlux is expected to add service to Seattle.
  • Swoop swooped for the final time.

What did the llama say when she was invited to a picnic?

Great!  Alpaca lunch.

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15 comments on “Cranky Weekly Review Presented by Oakland International Airport: JetBlue is Feeling Blue, Southwest Looks Toward its White Whale

  1. My guess is the limited staff fired at Delta was responsible for announcing the first set of changes to the Skymiles program.

  2. I looked at the SunSucker resort. I had sort of imagined that it would be on or close to a beach, but that doesn’t seem to be the case at all.

    1. I just looked at the website, and it says the closest beach is ~10 minutes away, but it’s a very small one. I think they’re presuming most of the guests will have a rental car (I’m surprised that, unless it’s not on the website or I missed it, the resort doesn’t have an on-site car rental location for shorter rentals), or will be only looking to go to the beach once or twice and spending most of their time on-site or on one of their recreation options off-site (golf, kayaking, etc.)

      I have to say the suite prices are…ambitious.

  3. Delta will probably just shove those “laid off” into contract positions. They love those contract jobs which the general public generally doesn’t hear about.

  4. All jokes aside, the JetBlue in Amsterdam saga is one that could have a long tail. USDOT has asked The Netherlands, an open skies partner, to declare what flights Dutch airlines are planning to fly to the US. JetBlue have asked for, and will likely get, retaliation restrictions on flights by KLM, TUI and MartinAir to the US which will harm the Dutch airlines more than the loss of AMS for JetBlue will harm them.

    This is all an outcome of the very poorly conceived government decision to limit and reverse the number of take-off’s and landings at AMS in an effort to appease the green/left flank of politics. A government which, at the time of me writing this comment, is technically no longer in office as the PM lost a vote of confidence and elections are scheduled to take place November 22, 2023. Many of the political parties have adopted or voiced support for the limitations, even though it may cost the Dutch operators dearly (KLM and AMS predominantly).

    And given the obvious breach of the US/Netherlands open skies agreement, as well as the move probably also being in conflict with EU directives, the Dutch political parties are foolheartedly pushing ahead. We will see if, after it becomes clear what coalition will be able to reach agreement to govern, if any of this soap continues or not.

    1. As an expert on Dutch aviation, I find this decision appalling and expect the Dutch government to roll it back at some point. Stroopwafels for everybody!

    2. Big deal. If Amsterdam wants fewer tourists and less pollution why does that offend anyone. Who cares? Go to a different Wuropean airport.

    3. Don’t be too surprised when the limited air travel “movement” becomes a world-wide thing. There are already groups in the US and elsewhere who are proposing similar measures as a starting point in getting rid of all things petroleum related.

      1. And France has already passed a virtual ban on domestic air travel, as they have high speed trains as an alternative. Germany and others are contemplating the same.

  5. Southwest is NOT think about moving across town but rather to another town in another county. DFW is in Fort Worth in Tarrant County. You may recall inn 2005 DFW Airport offered Southwest $22M to move to Tarrant County and Fort Worth however Southwest said no. Those of us who live here are reminded of our famous slogan “Dallas is where the East Peters out and Fort Worth is where the West begins!” Foat Wuth ah luv yew…

    1. DFW Airport is NOT in Fort Worth. The Fort Worth city limit extends south of the airport where AA HDQ is located. DFW Airport is in both Tarrant and Dallas County. The county line extends north to south just east of International Parkway. The airport is actually located in three cities – Irving, Euless, and Grapevine.

      Southwest will not move their operation from DAL to DFW, but will most likely have an operation similar to IAH or ORD

  6. “While we faced challenges in the third quarter…”

    Brian Sumers’ savaging of JetBlue is my new favorite thing. And well-deserved. From a post about Air Canada this week:

    “an airline like Air Canada, which has a cohesive, easy-to-understand strategy and is committed to seeing it through, [rather] than a whack-a-mole carrier like JetBlue, which always seems to be chasing the next big thing, like Mint, the Northeast Alliance, Europe, or that awful merger idea with Spirit.”

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