JetBlue is implementing a slew of cost-cutting measures, including axing some flights, as economic uncertainty has lowered consumer confidence and subsequently dampened consumer demand.
CEO Joanna Geraghty told staff in an internal note on Monday that it’s “unlikely” that the company will reach a break-even operating margin as it had hoped after years of financial strain.
“We’re hopeful demand and bookings will rebound, but even a recovery won’t fully offset the ground we’ve lost this year and our path back to profitability will take longer than we’d hoped,” Geraghty, who took the helm in 2024, said in the note, adding that the airline is still relying on borrowed cash to keep the operation running.
Geraghty, who previously served as president of the airline, was tapped to turn around the company, which had been in a precarious situation for years due to challenges stemming from the COVID-19 pandemic that hobbled the industry.
UNITED AND JETBLUE UNVEIL PARTNERSHIP WITH CROSS-AIRLINE PERKS
JetBlue hasn’t posted an annual profitability since the onset of the pandemic, with the carrier enduring a $1.4 billion loss in 2020. In 2024, its $3.8 billion merger with Spirit Airlines was rejected by a federal judge on the grounds that it would hurt competition for low-cost air travel tickets.
To rein in spending and preserve cash in the near term, Geraghty said the airline will continue to reduce flying capacity to match weaker demand, especially on Tuesdays and Wednesdays and in markets where it operates multiple flights for one route.
However, the airline said the majority of these reductions are already reflected in the airline’s current operating schedule. Meanwhile, the carrier is already looking to “wind down underperforming routes” and shift flying to more profitable routes. The carrier is expected to announce those changes over the next few weeks.
JetBlue is also pausing plans to restyle some of its in-service A320 classics and will instead park them at the end of the summer due to the reduced flying. Six of the 10 planes – the last in the older configuration – are still on track to be restyled early next year.
AMERICAN AIRLINES SUES JETBLUE AFTER PARTNERSHIP TALKS COLLAPSE
Aside from its service, the company is also trying to boost efficiency among its leadership by combining or restructuring certain roles. The carrier said it is also reducing some optional in-person and non-operational virtual training programs at its Long Island City support center in New York City.
The carrier plans to issue an updated travel and expense policy this week aimed at reducing certain travel costs. It’s also asking teams across the organization “to closely scrutinize and reduce business travel spending.” It also implemented budget reductions at support centers and is assessing hiring, business partner spending and other purchased services.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JBLU | JETBLUE AIRWAYS CORP. | 4.57 | +0.10 | +2.24% |
Despite the cost-cutting changes, Geraghty said the company is still investing in specific areas of its operation, including compensation reviews for frontline crew members, merit increases at the support center, and programs like JetBlue Scholars. The company said it will also still hire for key frontline roles and strategic support center positions.
It’s still moving forward with plans to launch its first-ever domestic first class, which is still in development.
Read the full article here
