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JetBlue cuts routes to improve financial performance
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JetBlue cuts routes to improve financial performance
Mar 19, 2024 3:20 PM

CHICAGO, March 19 (Reuters) - JetBlue Airways ( JBLU )

will eliminate a number of its routes and markets, and reduce

service in Los Angeles to improve its financial performance, the

company said on Tuesday.

In a memo seen by Reuters, network planning head Dave Jehn

told JetBlue's ( JBLU ) crew members the airline is not faring well in

some short-haul routes in western U.S. and Midwest markets, and

South America.

"More than ever, every route has to earn its right to

stay in the network," Jehn said.

As a result, it will stop serving markets such as Bogotá in

Colombia, Quito in Ecuador, Lima in Peru and Kansas City in

June.

Jehn said Tuesday's move does not change the airline's seat

capacity outlook for this year, which is expected to drop by a

low single-digit percentage rate from 2023.

JetBlue's ( JBLU ) earnings have been pressured by higher operating

costs and uneven travel demand. Jehn said demand after the

pandemic has shifted away from some routes. The collapse of

JetBlue's ( JBLU ) proposed merger with Spirit Airlines ( SAVE ) has

prompted the need to "refocus" in Los Angeles, he said.

The carrier is also dealing with an aircraft shortage due to

a snag with RTX's Pratt & Whitney geared turbofan that

powers the popular Airbus A320neo jets. In January,

JetBlue ( JBLU ) said it had seven aircraft out of service, with the

number expected to rise to as much as 15 by the end of 2024.

New JetBlue ( JBLU ) CEO Joanna Geraghty has vowed "aggressive

action" to return the airline to profitability. The measures

include deferring about $2.5 billion in aircraft capital

expenditure and cutting costs through buyouts to employees in

corporate, airport and customer support functions.

It is also trying to generate an extra $300 million in

revenue this year.

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