Monday, September 13, 2004

interview with jetblue ceo

via the girlhacker:

an interview with david neeleman, ceo of jetblue:

The way you mitigate the impact of rising salaries is by continuing to grow. You continue to bring people into the company and income-average those salaries.

And then there is this whole maintenance issue. You have new planes, and they start to age. You have to use more maintenance to keep them fresh. We have modeled that and gone out eight, nine years and put in all the engine overhauls and all that kind of stuff.

We went through an exercise and put 10 years of maintenance costs on our financial statements last year, and we found out we still would have had the highest margins in the industry.

Then there's the revenue picture. We are up against competitors that are taking unsustainable losses in markets where we compete.

The other side of it is structural. How do you structure your business? How do you get reservations? Ours is on the Internet: We have no paper tickets. We use our planes better. We use them over 13 hours a day, which is higher than Southwest does. We have more automation, where we don't have people keypunching stuff. It's all done.

The pilots all have laptops, so we don't have to worry about their manuals. It's all kind of this structural stuff, where we have built something from the ground up. And we have just gotten rid of all this unnecessary stuff. It's very difficult for them (the major established airlines) to change their structure around and reset the ship. We just built a better mousetrap and figured out a better way to do it while still preserving high-quality service.


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