As recently written I just had some time with American Airlines’ management and, in this complicated business, it was a reminder of just how simple the apparently complicated air transport business can be. Just as simple for the supposedly ‘different’ JetBlue which yesterday recorded its first loss.
American would just about kill to have suffered the 2005 $20 million net loss that JetBlue reported – beats its own $861 million let’s face it – but it’s a horrible moment for Wall Street-darling JetBlue.
Down in Texas the several hours of briefings came down to just one point in the end: American needs to get and keep costs under control, and to get passengers to pay more while staying loyal. Everything they are doing is aimed at those two goals.
We talked a lot about whether the concepts of ‘low-cost’ and ’legacy’ carriers would still make sense, say, ten years from now. I think the feeling was that American would never be ‘low-cost’ and JetBlue for example would never be ‘legacy’. But they also might not be as unalike as they are today.
And lo and behold, JetBlue chief David Neelman was yesterday saying things to analysts that could have come straight from the mouth of Gerard Arpey at American. Such as that JetBlue’s profitability has been trashed by fuel prices and that passengers can look forward to increased fares as a result. That does not quite accord with JetBlue’s brand values.
You can bet Neelman will be taking another look at Ryanair across the Atlantic. A carrier which buys fuel at the same price (well, less actually because it proved to be a master of hedging among other things) but is still looking to cut fares and is finding other ways to take customers’ money, while also making plenty for itself.