JetBlue to Cut Flights and Ground Aircraft Amid Financial Struggles
New cost-cutting measures aim to stem losses as airline concedes break-even margin in 2025 is “unlikely.”
JetBlue will implement a new round of cost-cutting measures, including reducing flight schedules and grounding aircraft, after admitting in an internal memo that achieving a break-even operating margin in 2025 is now “unlikely.” The move, communicated to employees by CEO Joanna Geraghty, comes in response to weaker-than-expected travel demand and persistent operational cost overruns.
In the memo, accessed by Reuters, Geraghty acknowledged that while the airline expects a rebound in bookings and demand, “even a recovery won’t fully make up for the ground we’ve lost this year, and our path back to profitability will take longer than expected.”
The New York-based airline is navigating a challenging environment. On one front, operating costs are climbing due to ongoing inspections of Pratt & Whitney’s Geared Turbofan (GTF) engines, which are grounding portions of JetBlue’s Airbus A321neo and A220 fleet. Earlier this year, the number of grounded aircraft had reached close to double digits, and the company expects this figure to remain elevated through 2025.
Compounding the issue is uncertain travel demand—a direct challenge for Geraghty, who became CEO in February 2024 after the court-blocked merger with Spirit Airlines. The failed deal left JetBlue without the scale it had hoped to gain, forcing a strategic pivot.
Why is JetBlue facing headwinds?
High costs: GTF engine inspections are grounding a significant number of JetBlue’s newest and most fuel-efficient aircraft.
Weak demand: Travel demand, particularly on non-leisure routes, is falling short of projections.
Failed merger: The blocked Spirit Airlines acquisition left JetBlue without a large-scale growth plan, triggering an internal restructuring.
These new savings measures build on prior efforts. In April, JetBlue withdrew its financial guidance for 2025 and announced plans to delay delivery of 44 new Airbus jets, cutting projected capital expenditures by $3 billion through 2029. Now, the airline will also pause retrofits on six Airbus A320s and ground the aircraft, according to the memo.
Additional steps include cutting underperforming routes to focus on more profitable ones and reassessing the size and scope of the leadership team. “While all airlines are feeling the impact, it’s especially frustrating for us because we had expected to reach break-even this year—something that now seems unlikely,” Geraghty wrote.
The market has responded swiftly: JetBlue shares are down more than 42% year-to-date, reflecting investor concern over the airline’s future in an increasingly competitive and uncertain economic landscape.
AUTOR
Desde 2017, haciendo periodismo aeronáutico. Award-Winning Journalist: Ganador de la edición 2023 de "Periodismo de Altura", otorgado por ALTA. Facts don't care about your feelings.
Comentarios
Para comentar, debés estar registrado
Por favor, iniciá sesión