President and Chief Executive Officer, JetBlue Airways
Excerpt from remarks to Boston College’s Chief Executives’ Club of Boston
September 22, 2011
TAKEAWAY: PASSING ON COSTS
In fact, oil prices are up 300 percent since 2000. Airfares are up one percent. And it’s really pressured a lot of the industry. I think it’s one of the reasons why you saw as many bankruptcies as we saw, as well. It wasn’t just the terrorists’ attacks, it was a lot of different issues. Number one being oil.
But all that said, I think productivity, efficiency, young airplanes, using a gate seven, eight times a day as opposed to sitting on a gate and maybe using it twice, the inefficiency models. From a labor perspective I think our crew members [are] peer competitive, if not better: compensation, benefits, quality of life.
So we have, as an older company and the legacy airlines, and some of the analysts said, you wait, it’s going to catch up with them. And not just oil, but also their maintenance costs with an aging fleet, and also from a labor perspective. And we just think we can be contrarian and do it differently, and not become part of those, the history books of the failed companies.
And don’t get me wrong, we’re going to have to ask [customers] to help share in some of the cost of energy. But you’re doing it at the gas pump. And so our average fare in the second quarter was just over $170 one way. Which is the highest fare ever in our company’s history. But we also have oil that’s hundreds of millions of dollars more this year. And people, they understand it, as long as you explain it. As long as you don’t gouge them.