Round 2 between Continental and JetBlue started last week as Continental CEO, Jeff Smisek, took several jabs at JetBlue and even the entire industry. Mr. Smisek goes on to talk about several topics ranging from some airlines dumping their pension programs to others that threw all amenities for passengers out the window to save, to even those that offer on board entertainment. On competitors who have wrested concessions from employees through bankruptcy:
"Our network competitors have frankly screwed their employees by defaulting on their pension plans and taking away wage and benefits in a very hostile manner."
By contrast, Smisek said, Continental sought $500 million in wage and benefit reduction only after going through its system and slashing $1.2 billion in non-employee costs. Continental also retained its pension plans, he said.
(Referring to United and US Airways)
On competitors' aging fleets:
"Our competitors have got a lot of gas-sucking pigs for aircraft."
Continental, Smisek said, has gradually upgraded its fleet. It now costs Continental 24% less to produce a seat mile than it did in 1998, thanks to a more efficient fleet, he said, noting: "That's a permanent fuel hedge."
(Referring to Northwest and American. Northwest which operates one of the largest fleets of DC-9s and American which has said recently they are mulling over the idea of replacing just the engines on their old fleet of MD-80s)On reducing in-flight amenities to save money:
"We did not follow our competitors in a race to the bottom to achieve a crappy product. ... We did not take off pillows, we did not take off blankets, we did not take off meals at mealtime and we will not charge fifteen bucks for an aisle seat."
(Referring to Northwest and American)
On the 36 channels of free TV programming offered by JetBlue Airways (JBLU:Nasdaq):
"They are a low-cost carrier, they are also an extremely low-RASM carrier, and their customers don't pay them a penny to watch those I Love Lucy reruns. ... It is a wasted investment in my mind."
Smisek said Continental will offer advanced video-on-demand options in some flights, particularly when it starts taking delivery of new-model Boeing 787s in 2009. But the company believes that in the future, airlines will offer in-flight Internet services that will allow passengers to control their own entertainment options.
(BAM! And Continental goes in for the kill!)
I especially love the comments Mr. Smisek said about Atlanta based Delta Air Lines. It is so great.
On efforts by Delta Air Lines (DALRQ) to rapidly boost its transatlantic capacity:
"Our successful international expansion is being copied by a lot of people, including at least one bankrupt airline in Atlanta. They've already gone through their stockholders money; now they are using their creditors' money. They are throwing a lot of capacity into the market. I predict they will lose their shirts on it."
Smisek added that when Continental adds routes, it is subject to "adult supervision."
Mr. Smisek if only your airline flew to the midwest more often...
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