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Did JetBlue Get 72% Off Airbus A220 Order?

JetBlue Airways Corp. got a great deal on its latest aircraft purchase from Airbus SE, according to Moody’s Investors Service. The carrier probably paid $1.4 billion to $1.7 billion for 60 Airbus A220-300 jets, or between $23 million and $28 million per plane, Moody’s analyst Jonathan Root said in a report Friday, citing estimates by appraisers and price breaks that are typical for large orders. “As with most campaigns, we believe the decision comes down to the lowest all-in cost, because the narrow-body aircraft manufactured by Airbus and Boeing have similar capabilities and operating costs for the majority of operators,” he said.

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Did JetBlue Get 72% Off Airbus A220 Order?

JetBlue Places Order For 60 Airbus A220’s

NEW YORK (Reuters) – Airbus SE scored a key victory on Tuesday, with U.S. airline JetBlue announcing it would buy 60 of its A220-300 narrowbody jets, the first major order for the planemaker’s newly rebranded programme as its battle with rival Boeing Co intensifies.

Earlier on Tuesday, Airbus unveiled the new A220 name for the 110-seat to 130-seat model jets, previously called the CSeries under Canadian firm Bombardier, at a ceremony at the planemaker’s Toulouse facilities in France.

Airbus has taken majority control of the loss-making Montreal-based aircraft programme, with Bombardier and Quebec as minority partners. The deal closed on July 1.

“We feel the 220 is the perfect fit for our network, strategy and customer experience, and most importantly, for our owners,” JetBlue Chief Financial Officer Steve Priest said in a phone interview. “It really is the ideal aircraft to carry the momentum of our structured cost programme well into the next decade.”

The A220 will replace JetBlue’s existing fleet of 60 Embraer E190 aircraft, with those jets retiring beginning in 2020.

The A220’s triumph over Brazil’s Embraer SA sets the stage for a fierce competition between Airbus and Chicago-based Boeing Co in the narrowbody market. Both major planemakers have recently taken stakes in smaller rivals’ jet programs.

Boeing last week announced a tentative deal for a controlling stake in the commercial aircraft arm of Embraer under a new $4.75 billion (£3.57 billion) joint venture.

“It’s a very smart decision on JetBlue’s part because the A220 is an extremely flexible airplane,” Atmosphere Research Group fleet analyst Henry Harteveldt said, adding that it was a “completely new airplane” with a fuel efficiency that would allow JetBlue to carry “20 to 30 more passengers for free.”

The jets will be powered by Pratt & Whitney Geared Turbofan (GTF) PW1500G engines. Pratt & Whitney is owned by Connecticut-based United Technologies Corp.

JetBlue declined to outline the financial details of the deal.

The carrier said the new aircraft will be assembled at Airbus’ Mobile, Alabama, facility.

(Reporting by Alana Wise in New York and Tim Hepher in Toulouse, France; Additional reporting by Tracy Rucinski in Chicago, Editing by Rosalba O’Brien)

Photo from:

https://www.airbus.com/

Airbus Renames CSeries Jet As A220

* Sees demand for at least 3,000 of the planes over 20 years

* Says move will be positive for jobs in Quebec

* Broadens its battle with Boeing to small passenger jets (Adds potential order, background)

TOULOUSE, France, July 10 (Reuters) – Airbus gave its newly acquired Canadian CSeries jet a new name and looked close to winning an inaugural order on Tuesday as it prepares to broaden its battle with Boeing for jet sales.

The European firm said it was rebranding the plane as the A220, slotting it just under its longstanding A300 portfolio which stretches from the 124-seat A319 to the 544-seat A380.

Airbus expects to sell a “double-digit” number of the jets that have 110-130 seats this year and sees demand for at least 3,000 of them over 20 years, said CSeries sales chief David Dufrenois.

“I don’t think it will be very long before we see the first results on the market,” said Airbus Chief Commercial Officer Eric Schulz.

The CSeries has been locked in a fierce competition for a deal to supply jets to U.S. carrier JetBlue and is in poll position to win as Airbus also offers more attractive delivery positions on its larger planes, industry sources said.

Airbus and JetBlue declined comment.

The rebranding seals the takeover of one of Canada’s most visible industrial projects and ends Bombardier’s efforts to go it alone in the mainline jet market against larger rivals.

Airbus officials stressed it would be positive for jobs in Quebec where the lightweight jet is built.

The 110-seat and 130-seat models, previously known as CS100 and CS300, will be known as A220-100 and A220-300 respectively.

A deal for Airbus to take majority control of the loss-making Montreal-based aircraft programme with Bombardier and Quebec as minority partners closed on July 1.

The move also sets the stage for a broader confrontation with Boeing, which last week announced a tentative deal to take over the commercial unit of Bombardier’s competitor Embraer.

Until now the two plane giants have focused mainly on planes starting at 150 seats and largely ignored the niche below their single-aisle jets.

Adding the smaller models to their portfolios will broaden the revenue base of each company and prevent a key slice of Western know-how reaching potential competitor China, which had held talks to buy the CSeries, people involved in the deal said.

The change of identity came in a slick branding ceremony as the Canadian-developed passenger jet performed a flypast in searing heat over Airbus’s Toulouse facilities, with executives papering over past differences over prospects for the jet.

Airbus said it expected total demand for 7,000 planes in its category over 20 years, including its own A319.

(Reporting by Tim Hepher Editing by Sudip Kar-Gupta and Edmund Blair)

Stock Battle: American Airlines vs. JetBlue

Airline stocks have plunged this week for two major reasons. First, trade tensions with China caused investors to start worrying about demand. Second, oil prices have started moving higher again, following a brief respite prior to last week’s OPEC meeting.

Not surprisingly, the airlines with the lowest profit margins have been hit hardest. These carriers are the most vulnerable to fuel price increases and demand shocks, as small changes in their profit margins can severely impact their earnings. During the past year, American Airlines (NASDAQ: AAL) has fallen into the bottom echelon of U.S. airlines in terms of profitability, and so its share price tumbled 7.5% in the first three days of this week.

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American Airlines vs JetBlue

David Neeleman Planning New US Budget Airline

(Reuters) – WestJet Airlines Ltd and JetBlue Airways Corp founder David
Neeleman is planning to launch a new budget airline in the United States,
with $100 million in startup capital, according to a report from the Airline
Weekly.

The airline, tentatively called Moxy, has secured orders for 60 Bombardier
CS300 aircraft, the publication said, citing people familiar with the matter.
(https://bit.ly/2HYULKP)

The report also said that former Air Canada Chief Executive Officer Robert
Milton and former International Lease Finance Corp CEO Henri Courpron are
among early investors along with Neeleman himself.

Bombardier declined to comment on the report, while Neeleman was not
immediately available for comment.

(Reporting by Karan Nagarkatti in Bengaluru; Editing by Shounak Dasgupta)

Alaska Airlines Delaying Aircraft Deliveries

Alaska Air (NYSE: ALK) has experienced severe margin compression over the past several quarters, due to a combination of rising fuel costs, stiff competition, and merger pains following its 2016 acquisition of Virgin America. However, management is laser-focused on rebuilding the company’s profitability. Toward that end, Alaska Airlines is set to reduce its growth rate until it starts hitting its margin and return on invested capital goals.

Last quarter, Alaska Airlines began taking concrete steps to align its fleet plan with its new target of 4% annual growth and $750 million of annual capital expenditures for 2019 and 2020. The carrier restructured its orders with Boeing (NYSE: BA), Airbus (NASDAQOTH: EADSY), and Embraer (NYSE: ERJ) to better fit its projected needs.

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Alaska Airlines Delaying Aircraft Deliveries

JetBlue Ready to Refurbish Airbus A320 Fleet

At a late 2014 investor day event, JetBlue Airways (NASDAQ: JBLU) unveiled a plan to boost its annual earnings by adding seats to each of its 130 Airbus (NASDAQOTH: EADSY) A320s. This “cabin refresh” project was designed to reduce unit costs while maintaining best-in-class legroom and adding new enhancements to the customer experience.

After a series of delays, JetBlue has finally completed the first A320 cabin retrofit. Last week, the carrier provided more details about its schedule for completing the project, as well as some design changes it is adopting. The cabin refresh will be a significant contributor to JetBlue’s efforts to keep unit costs roughly flat over the next few years.

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JetBlue Ready to Refurbish A320 Fleet

Alaska Air Succumbs to Basic Economy Pressures

Well, The Greyhound-ification of the skies is now complete. Alaska Air, one of the last US airlines to resist the “no-frills” model to some degree, has announced that they will begin offering a basic fare to sell cheaper tickets for seats in the rear of the plane. The airline also is adding a premium charge for passengers who want the more roomy exit row seats.

The fee changes — including what the airline is calling “basic economy” fares — were announced Monday during a conference call following the airline’s quarterly earnings report.

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Alaska Air Basic economy

JetBlue raises outlook after upbeat March data

(BUSINESS WIRE) – JetBlue Airways Corporation (JBLU) reported its preliminary traffic results for March 2018. Traffic in March increased 7.3 percent from March 2017, on a capacity increase of 3.3 percent. Load factor for March 2018 was 89.0 percent, an increase of 3.3 points from March 2017. JetBlue’s preliminary completion factor was 93.6 percent and its on-time (1) performance was 64.2 percent. Due to a more active winter than normal, JetBlue now expects first quarter capacity to increase approximately 3.3 percent, below the prior guidance range of 3.5% to 5.5%.

First quarter revenue per available seat mile (RASM) is expected to increase approximately 6.1 percent year-over-year, above the prior guidance range of 3.5% to 5.5%. RASM growth in the first quarter was better than previously expected as a result of stronger close-in peak demand in March and an approximate half point positive impact from lower completion factor in the final weeks of March. For the first quarter in total, RASM was positively impacted by approximately one point due to lower completion factor.

As previously disclosed, holiday calendar placement impacts RASM trends in both the first and second quarters. For the first quarter overall, RASM was positively impacted by a 2.0 point net benefit from calendar placement, including a 2.5 point benefit from Easter timing. For the second quarter, JetBlue continues to expect a 2.5 point headwind from holiday calendar placement, as well as a 1.25 point headwind from completion factor and co-brand incentive payments previously disclosed for the second quarter of 2017.

JETBLUE AIRWAYS TRAFFIC RESULTS

             
    March 2018   March 2017   % Change
Revenue passenger miles (000)   4,376,149     4,079,182     7.3 %
Available seat miles (000)   4,918,144     4,760,418     3.3 %
Load factor   89.0 %   85.7 %   3.3 pts.
Revenue passengers   3,651,416     3,486,317     4.7 %
Departures   30,179     30,206     (0.1 )%
Average stage length (miles)   1,099     1,074     2.3 %
             
    Y-T-D 2018   Y-T-D 2017   % Change
Revenue passenger miles (000)   11,866,145     11,399,000     4.1 %
Available seat miles (000)   14,024,559     13,579,770     3.3 %
Load factor   84.6 %   83.9 %   0.7 pts.
Revenue passengers   9,880,785     9,710,529     1.8 %
Departures   86,046     85,724     0.4 %
Average stage length (miles)   1,098     1,079     1.8 %

(1) The U.S. Department of Transportation considers on-time arrivals to be those domestic flights arriving within 14 minutes of schedule.

JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles (Long Beach), Orlando, and San Juan. JetBlue carries more than 40 million customers a year to 101 cities in the U.S., Caribbean, and Latin America with an average of 1,000 daily flights. For more information please visit jetblue.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180411005279/en/

Contact:

JetBlue Investor Relations
Tel: +1 718 709 2202
ir@jetblue.com 
or
JetBlue Corporate Communications
Tel: +1 718 709 3089
corpcomm@jetblue.com

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