Skift Take
It looks like JetBlueâs new strategy that emphasizes cutting unprofitable routes and bolstering leisure capacity in the East Coast is continuing to pay off.
JetBlue raised its third-quarter guidance Thursday primarily due to an uptick in bookings, particularly in Latin America.
The carrier now expects to see anywhere between a 2.5% decrease and a 1% increase in its revenue for the third quarter. Previously, JetBlue estimated to see revenue decrease from 5.5% to 1.5%.
JetBlue also said it benefited from rebookings that took place during the CrowdStrike outage in July and moderating fuel prices.Â
The airline is seeing a slight boost in capacity for the quarter â it projects available seat miles to be down from 3% to 5%. JetBlue previously forecast available seat miles to be 3% to 6% lower.Â
Is JetBlue’s New Strategy Paying Off?
The more positive guidance comes as JetBlue posted a surprise profit for the second quarter. Under new CEO Joanna Geraghty, the carrier has employed a strategy that emphasizes cutting unprofitable routes and bolstering its leisure network in the East Coast.
Previously, JetBlue struggled to be profitable and had an unclear path forward following the collapse of its proposed merger with Spirit Airlines and the dissolution of the Northeast Alliance.
Executives said they expect the new initiatives to bring in $800 million to $900 million in pre-tax profit by 2027.
JetBlue chief financial officer Ursula Hurley said in a call with analysts July 30 that the carrier would defer $3 billion in aircraft spending until 2029 to improve its cash flow. The carrier is also deferring the delivery of 44 Airbus A321neos until at least 2030 partially due to Pratt & Whitney engine issues grounding dozens of aircraft.
âAt this stage, we simply canât afford to continue taking delivery of costly new aircraft that may need to be parked due to engine availability issues, especially if we must raise financing to support these deliveries,â Hurley said on the call.
Geraghty cautioned during the call that the engine issues could make it more difficult for JetBlue to achieve profitability.Â
Joanna Geraghty is due to speak at the Skift Global Forum in New York City later this month. For more information visit live.skift.com/skift-global-forum
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