A JetBlue Airways on Tuesday reported a surprise second-quarter profit and delayed the delivery of 44 Airbus A321neo aircraft until 2030 and beyond in a strategy to boost profits.
The New York-based company has set a goal of achieving between $800 million and $900 million in incremental profits by 2027, focusing on reliable operation and demand for leisure travel in the New York, New England, Florida and Latin America.
To better manage costs, the company revealed that the postponement of aircraft deliveries will result in a reduction of approximately US$3 billion in planned capital expenditure for the period 2025 to 2029.
“It is critical that we keep our costs low so that we can continue to offer customers maximum value when they fly”, CEO Joanna Geraghty told analysts on an earnings call.
Demand for travel remains high, however, the large supply of seats by airlines in the domestic market has put downward pressure on fares, making it more challenging for U.S. airlines to manage rising labor costs and other operating expenses.
Problems with Geared Turbofan (GTF) engines Pratt & Whitney impacted the operations of JetBlue, forcing the company to remove several aircraft from circulation. The company attributes the postponement of aircraft deliveries to problems faced with the engines.
“At this time, we simply cannot continue to receive new, expensive aircraft that may need to be parked due to engine availability issues.”, said the financial director of JetBlue, Ursula Hurley.
In the second quarter, the JetBlue it achieved an adjusted profit of 8 cents per share, in contrast to the loss of 11 cents predicted by analysts, according to data from LSEG. Total operating revenue fell 6,9% to $2,43 billion, exceeding expectations for Wall Street of US$ 2,40 billion.
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