Could a JetBlue domestic first class be around the corner? Some top industry analysts think so.
30.07.2024 - 22:01 / skift.com / Spirit Airlines / Robin Hayes / Joanna Geraghty / Marty St George / Ursula Hurley / East Coast / Meghna Maharishi / St George
JetBlue posted a surprise quarterly profit of $25 million as it seeks to revamp its strategy following the collapse of its merger with Spirit Airlines.
The carrier’s profit in the second quarter was down 82% compared to last year, but Wall Street analysts were expecting a loss.
JetBlue’s strategy, now branded as JetForward, focuses on improving the carrier’s operational reliability, bolstering its leisure network in the East Coast, tailoring its product offerings and cutting costs. Executives said it expects the strategy to add between $800 million and $900 million in pre-tax profit in 2027.
In recent months, the carrier has also cut dozens of unprofitable routes. So far, JetBlue has scrapped more than 50 routes, president Marty St. George said in a call with analysts on Tuesday.
St. George said the new strategy gave JetBlue an additional $100 million in revenue for the second quarter.
The airline also announced that it would defer $3 billion in aircraft spending until 2029 to improve its cash flow. It is also deferring the delivery of 44 Airbus A321neo until at least 2030 partly due to Pratt and Whitney engine issues grounding dozens of aircraft.
“At this stage, we simply can’t afford to continue taking delivery of costly new aircraft that may need to be parked due to engine availability issues, especially if we must raise financing to support these deliveries,” chief financial officer Ursula Hurley said on the call.
CEO Joanna Geraghty cautioned that engine issues could make it more difficult for JetBlue to achieve profitability.
“In order to be profitable in this uncertain environment, we must transform our cost base in an aggressive manner, similar to the approach we’ve taken with our network changes,” Geraghty said.
JetBlue is shifting capacity from its corporate routes in New York to leisure ones.
St. George said JetBlue would continue to fly corporate customers, but the route adjustments better reflected the slower recovery of business travel out of New York.
“There’s no walking away from the corporate market,” St. George said.
Geraghty has previously described cities like New York and Boston, along with regions like the Caribbean, as “bread-and-butter” areas that could help JetBlue’s profitability.
Her predecessor, Robin Hayes, pushed for JetBlue to compete more directly with legacy carriers. One of the hallmarks of Hayes’ tenure was launching routes to Europe, for example. JetBlue recently slashed its winter schedule to London and Paris.
With JetBlue’s unexpected second-quarter profit, Geraghty’s strategy seems to be paying off.
Under her leadership, JetBlue peeled back its ambitions to be a direct competitor to the legacies and instead has focused on what Geraghty describes as
Could a JetBlue domestic first class be around the corner? Some top industry analysts think so.
As the aviation industry navigates and prepares for future growth, two events must be on every aviation professional’s calendar: Skift Global Forum in New York City (September 17-19) and the Skift Aviation Forum in Dallas (November 12). These forums present invaluable opportunities to gain insights from top industry leaders. Here is a snapshot of just a few of the leaders who will be taking the stage at each event:
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JetBlue is on the move with new flight routes, while saying goodbye to others. Ahead of the winter travel season, the airline will add a variety of new routes to popular destinations such as Fort Lauderdale, Orlando, and Phoenix. “These moves underscore JetBlue's commitment to refining its network while leveraging its award-winning experience,” the airline shared in a release announcing the news. In the New York area, the airline will begin new service from Long Island’s MacArthur Airport (ISP), with a new daily flight to Orlando, and also service to Fort Lauderdale (FLL) and West Palm Beach (VPS) four times a week.