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Thursday, 21 March 2024

These flights are the victims of JetBlue’s cost-cutting measures

by BD Banks

Now that a federal judge has definitively put the kibosh on JetBlue  (JBLU) ‘s plans to acquire low-cost airline Spirit  (SAVE)  for $3.8 billion, the New York-based is making major changes to its network in an effort to bring down its costs and get back to profit after several troublesome earnings quarters.

The hard decisions involve completely exiting markets such as Kansas City in Missouri and Newburgh in New York State as well as canceling certain long-haul routes determined to be unprofitable. Los Angeles International Airport (LAX) will also face the brunt of the cuts — JetBlue is bringing down its departures from the airport to 24 a day from a peak of 34 a day.

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The airline is cutting flights to Los Angeles from San Francisco, Miami, Las Vegas, Reno and Puerto Vallarta in Mexico. JetBlue is also completely exiting a number of South American markets such as Bogotå in Colombia, Quito in Ecuador and Lima in Peru.

JetBlue Airways is completely exiting the Colombia market.

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JetBlue: ‘Reducing the chance of delays for our customers’

“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,” JetBlue’s VP of Network Planning and Airline Partnerships David Jehn wrote in a memo sent out internally.

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Jehn also referred to the RTX Corp  (RTX)  Pratt & Whitney GTF engine recalls that affected a number of airlines — after the Federal Aviation Administration (FAA) discovered a defect with one of the engines commonly used in Airbus  (EADSF)  aircraft, hundreds of planes have been grounded for an investigation that could take several years. Spirit has been hit particularly hard and had to put off the new route to Tulum that it announced last year.

Changes to ‘help during a time when aircraft availability is limited’

“The changes will also help us during a time when aircraft availability is limited — particularly with some of our aircraft grounded due to Pratt & Whitney GTF engine inspections,” Jehn explained in the memo.

Other flights cut by JetBlue include routes between New York and Detroit and Florida’s Fort Lauderdale-Hollywood International Airport (FLL) to Austin, Atlanta, Nashville and Salt Lake City.

JetBlue said that it would instead focus its energies on “bread and butter” routes that bring it the most travelers (and profit) — routes between different cities along the East Coast, cross-country flights between major hubs such as New York and Los Angeles and routes to Caribbean destinations near the East Coast such as the Bahamas, Aruba and the Dominican Republic.

The planes that would have been used to run the cut routes will be redirected to run the other flights the airline sees more traffic in. After these plans were made public, JetBlue shares saw an immediate boost and were up 1.56% at $6.82 as of Wednesday afternoon.

At a conference in New York on March 12, JetBlue CEO Joanna Geraghty said that JetBlue has “a lot of work to do to get JetBlue back to profitability.”

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