JetBlue Airways - Airports Council International

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JetBlue Airways
Andrea Lusso
Network Planning
3
4
5
6
BOS
• Focused on business relevance
• Plus a healthy trade in leisure/VFR
• 120 flights/day. Goal is 150
• Growth in new routes, increased
relevance, increased schedules
LGB
• Big origin traffic
• Good mix of leisure and business
• New terminal
• International growth
NYC
• Leisure and VFR focused
• Serving the underserved
• Growing with larger gauges and
key new markets
FLL
• VFR and international focused
• Growth will be in Latin America
• 60 flights/ day. Goal is 100+
MCO
• Big destination year-round
• Not a lot of origin traffic, but plenty of
draw from everywhere in the network
SJU
• Great leisure destination year-round
• Good VFR and business market
• Caribbean anchor
7
THANK YOU
Andrea Lusso
Network Planning
WestJet
January 2014
1996…
 5 destinations
 6 nonstop routes
 3 aircraft
10
2014…
 87 destinations
 228 nonstop routes
 108 aircraft
11
WestJet – continued growth
We now carry nearly
20 million guests
each year…
…and generate
over $3.5 billion
in annual revenues.
2/10/2014
The result is a consistently profitable and growing
operation.
Net Earnings (millions of dollars)
Reported in Canadian GAAP up to 2009 with 2005-2008 restatements. 2010 - 2013 reported under IFRS.
13
Future Growth Drivers
Growth drivers
• Encore
• Fleet
• Alliances
• Plus product
• WestJet Rewards
• Geographic expansion
2/10/2014
15
WestJet Encore provides right-sized aircraft for
new markets, and feeds the 737 network.
•
•
•
•
Employee engagement: voted 91% in favor of launching carrier
Organizational structure: wholly owned subsidiary
Fleet size: up to 45 x 78-seat Q400 turboprop aircraft
Encore allows us to:
–
–
–
2/10/2014
Add new markets to the WestJet network
Connect the dots between existing WestJet cities
Replace and redeploy 737 flying to optimize the network
16
WestJet’s recent order provides fleet flexibility
for the next 15 years.
737-NG
737-MAX
Q400
186
192
197
174
165
45
151
45
45
202
45
207
213
45
45
45
135
34
121
25
112
2/10/2014
56
62
65
118
118
118
118
118
118
118
118
118
118
2021
2022
2023
2024
2025
2026
2027
2015
118
2020
2014
117
2019
2013
97
45
2018
110
91
23
45
2017
105
86
11
228
2016
105
100
2012
7
2011
100
2010
91
4
34
44
29
39
50
45
225
16
97
2009
86
43
219
17
Airline partnerships expand our network
WestJet Rewards – rewarding frequent guests
WestJet RBC World Elite
MasterCard
Rated number one travel
rewards card in Canada out
of 200 cards reviewed by
MoneySense magazine
(Sep. 2013).
2/10/2014
19
Fare bundles help guests customize their
experience while generating ancillary revenue.
2/10/2014
20
Growth opportunities exist in many geographies.
Revenue Share by Region
$10B
$7B
$6B
$2B
Domestic
Transborder
Caribbean/Mexico
Long Haul
Source: Internal estimates using public capacity and traffic information.
2/10/2014
Restricted & Confidential
21
Thank you!
ACI-NA Air Service Data Seminar
January 28, 2014
The Airline Industry Innovator
23
Disclaimer
This presentation includes forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about
future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking
statements are based on information available at the time those statements are made and/or management’s belief as of that time with respect to future events, and
are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the
forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding the
delivery schedule of the aircraft on order and announced new service routes and customer savings programs. Important factors that could cause such differences
include, but are not limited to: the competitive environment in our industry; our ability to keep costs low; changes in our fuel cost; the impact of worldwide economic
conditions, including the impact of the economic recession on customer travel behavior; actual or threatened terrorist attacks, global instability and potential U.S.
military actions or activities; ability to generate non-ticket revenues; restriction on third-party membership programs; external conditions, including air traffic
congestion, weather and outbreak of disease; air travel substitutes; labor disputes, employee strikes and other labor-related disruptions including in connection with
our current negotiations with the union representing our flight attendants; ability to attract and retain qualified personnel; loss of key personnel; aircraft-related fixed
obligations; dependence on cash balances and operating cash flows; ability to hedge fuel requirements; our aircraft utilization rate; maintenance costs; our reliance
on automated systems and the risks associated with changes made to those systems; use of personal data; lack of marketing alliances; government regulation; our
ability to fulfill growth strategy; operational disruptions; our indebtedness and similar obligations; our liquidity; our reliance on third-party vendors and partners;
single fuel provider; an aircraft accident or incident; our aircraft and engine suppliers; changes in the U.S. Domestic, Caribbean and Latin American markets;
insurance costs; environmental regulations; and other risk factors included under “Risk Factors” in its Annual report on Form 10-K and other filings with the
Securities and Exchange Commission.
In addition, in this presentation, the words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “potential” and similar expressions, as
they relate to our company, our business and our management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the
forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially from those anticipated or implied in
the forward-looking statements.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or
referred to above. Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statements.
We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forwardlooking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will
make additional updates with respect to those or other forward-looking statements.
24
Spirit’s Model Creates Largest Potential Market
Our low fares appeal to the largest potential audience
Low Price
Spirit
Breakeven
Spirit’s Market Potential
High Price
Legacy
Breakeven
Small
Finite
Market
High Touch
Too many
carriers
competing for
share
Not well
received by
legacy
customers
No Frills, Unbundled
25
Price Above All
What are the most important factors when purchasing airline tickets?
(participants selected up to three factors)
Price
Schedule
Non-stop vs. connecting flight
Luggage charges and other fees
Frequent flier benefits
Extra legroom
Airports served [which area of airport selected]
Reputation of airline service
Business class availability
0
200
400
600
800
Source: elliott.org
26
Low Fare, High Choice
Spirit’s A La Carte Revenue Structure Gives Customers
the Choice to Pay Only for What They Value
 Checked bags
 Carry-on bag
 Seat assignment
 $9 Fare Club
 Big Front Seat
 Co-branded credit card
 Hotel
 Rental car
 On-board drinks & snacks
 Other
27
Lowest Cost Producer in Our Primary Markets
Spirit’s unit cost advantage is one of our most important assets as we grow
Adjusted CASM LTM 3Q13
(¢)
+89%
Higher than Spirit
20.00
18.00
+56%
16.00
+61%
14.00
+26%
12.00
+8%
10.00
8.00
Spirit
Overlap With
Spirit Network (3)
Southwest
JetBlue
Delta
American
United
30%
14%
20%
59%
30%
Notes
1. Cost data based on public company reports for the twelve months ended September 30, 2013; Reflects mainline operations only; Stage length adjusted to 941 miles, formula = other airline CASM x (other
airline stage length / Spirit stage length)0.5; Stage length for Spirit, JetBlue and Southwest derived from public company reports for twelve months ended September 30, 2013; American, Delta and United
derived from Form 41 data for the twelve months ended June 30, 2013.
2. Excludes special items and unrealized mark-to-market gains and losses for all carriers shown; see Appendix for reconciliation detail for Spirit Adjusted CASM.
3. Based on publicly available data as of 5/9/2013 for routes as of July 2013; Airports within same metropolitan areas considered single market; Includes seasonal service markets.
Over 260 Daily Flights In Over 130 Nonstop Markets
29
Spirit’s Business Model Drives High Margins
Carefully managed growth drives industry-leading margins
Adjusted Pre-Tax Margin LTM 3Q131
18.0
17.3
16.0
Pro forma Adjusted
for Hurricane Sandy
14.5
11.8
12.0
7.1
6.1
6.0
5.9
3.9
3.2
1.7
0.0
Spirit
Capacity Growth(2) 22.9
Allegiant
12.3
Alaska
7.8
Delta
0.0
US Airways Southwest JetBlue
2.6
1.1
6.0
American
0.7
Notes
1. Excludes unrealized mark-to-market fuel hedge gains and losses and special items for all carriers shown. See Appendix for Spirit reconciliation details to most comparable GAAP measure.
2. Capacity growth = % change in consolidated available seat miles for last twelve months ended September 30, 2013 as compared to last twelve months ended September 30, 2012.
United
(6.0)
30
Serious Fleet Growth
Spirit’s aircraft fleet is projected to grow from 54 at the end of 2013 to
over 140 by the end of 2021
Spirit Airlines Fleet End of Year
160
140
# of aircraft
120
A321 ceo/neo
100
80
60
A320 ceo/neo
40
20
0
2013
As of December 31, 2013
A319
2014
2015
2016
2017
2018
2019
2020
2021
31
Thank You!
32
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