JetBlue Airways saw a significant increase in its shares after reporting a surprise profit for the second quarter, despite a decrease from the previous year. The airline also announced plans to defer $3 billion in aircraft spending through 2029 in order to improve cash flow. JetBlue has been struggling to make a profit since before the pandemic and has been cutting unprofitable routes and reducing costs in an effort to stop losing money. The airline has stopped 50 routes and is focusing more on service from areas where it has historically been strong, such as New York, New England, and Puerto Rico.
In an effort to maximize revenue, JetBlue is also working to better deploy aircraft outfitted with premium seats like its Mint aircraft. The airline expects these changes to add $800 million to $900 million in pretax profit from 2025 through 2027. Since it cannot fully control the impact of external factors like the Pratt & Whitney engine recall, JetBlue CEO Joanna Geraghty said that the company is taking aggressive action on every front. The airline is also taking steps to improve reliability, such as adding more buffer time to flights, as JetBlue has consistently ranked toward the bottom of U.S. carriers in punctuality.
Despite these measures, JetBlue plans to cut capacity by as much as 6% in the third quarter and up to 5% for the full year. The airline expects third-quarter revenue to drop by as much as 5.5% from last year and full-year sales to be down as much as 6% over 2023. JetBlue executives have attributed weaker-than-expected revenue this summer to an oversupply of capacity in the domestic market. The positive results and investor reception to JetBlue’s performance were seen as a win for CEO Joanna Geraghty, who took over in February and has been actively working to improve the company’s financial position.
Earlier this year, JetBlue and Spirit Airlines called off their merger agreement after it was blocked by a federal judge. Both airlines have acknowledged the challenges they face in competing with larger rivals in the industry. Despite this setback, JetBlue is continuing its efforts to increase profitability and improve its financial outlook. By deferring aircraft spending and implementing cost-cutting measures, the airline aims to strengthen its cash flow and position itself for long-term success in the highly competitive airline industry. With a focus on strategic route adjustments and revenue optimization, JetBlue is working towards a more stable and profitable future.
