JetBlue Airways has decided to cut many unprofitable routes, including from Los Angeles, and ending services to many cities as part of the carrier’s latest efforts to cut costs, reports said citing a memo to staff.
The news comes as the loss-making airline is under increased pressure to cut its expenses and return to profitability after projecting weakness in its performance in the new year. In late January, while reporting a fourth-quarter net loss compared to the prior year’s profit, the company had said it sees lower revenues and capacity in its first quarter and fiscal 2024.
In addition, activist investor Carl Icahn in February disclosed a nearly 10 percent stake in JetBlue and won two board seats. In a filing with the U.S. Securities And Exchange Commission, the billionaire investor Icahn had said that the shares were acquired in the belief that they were undervalued.
Adding to the woes, JetBlue had to terminate its much awaited deal to buy Spirit Airlines Inc. recently after failure to meet the required closing conditions, including receiving necessary legal and regulatory approvals, before the agreed date. JetBlue agreed to pay Spirit $69 million.
In addition, the company is facing limited aircraft after some of its Airbus planes were grounded for inspection following Pratt & Whitney engine issues.
As per the reports, the company plans to reduce its departures from Los Angeles International Airport to about 24 a day from the current 34. The proposed cuts include services from Los Angeles to San Francisco, Seattle, Miami, Las Vegas, Nevada’s Reno, and Puerto Vallarta in Mexico.
JetBlue is also stopping flights to select cities in Colombia, Ecuador, Peru, and in Missouri, among others.
The company plans to focus on profitable transcontinental routes that include its Mint business class cabin. Along with this, JetBlue will focus on certain routes along the East Coast, and those serving Caribbean vacation destinations.
Dave Jehn, vice president of network planning and airline partnerships, reportedly said, “These moves will allow us to redeploy our fleet to increase frequencies on well-performing routes from JetBlue’s focus cities while continuing to increase crucial ground time for our aircraft, reducing the chance of delays for our customers.”
CNBC reported that the carrier trimmed some other routes earlier this year.
Meanwhile, the announced changes are not expected to affect JetBlue’s planned capacity for fiscal 2024 of down low single digits.
While announcing the weak fourth-quarter results, JetBlue had said that it was taking aggressive action, including launching $300 million of revenue initiatives, to return to profitability. The company also said then that it was on track to deliver run-rate savings of $175 to $200 million by the end of 2024.
Ursula Hurley, JetBlue’s chief financial officer, added then that the company was carefully evaluating deeper cuts to its controllable costs beyond its ongoing fleet modernization and structural cost programs.
by RTTNews Staff Writer
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