JetBlue deepens cost cuts in new CEO’s Turnaround Plan

JetBlue Airways Corp. will defer $3 billion in spending on new aircraft through 2029 in a sweeping plan by its new chief executive officer to restructure operations and return the beleaguered carrier to profitability.

The airline increased to 15 the number of cities where it’s ending service, and has cut more than 50 routes to trim unprofitable flying from its network, it said as it reported second-quarter earnings on Tuesday.

JetBlue said it renegotiated its delivery schedule with Airbus SE in order to defer 44 A321neo aircraft originally scheduled for delivery from 2025 through 2029, expanding an earlier plan to push out spending on new planes. Those jets now won’t arrive until 2030 and beyond.

The moves are the latest by Chief Executive Officer Joanna Geraghty in a push to boost pretax income by as much as $900 million in the face of persistently high costs and diminished growth prospects following the breakup of multiple partnerships. 

Geraghty took over for Robin Hayes early this year. She is working under scrutiny from activist investor Carl Icahn, who in February revealed a roughly 10% stake and began pushing to boost shareholder value. The company has since given his investment firm two board seats.

Geraghty has said her top priority is returning to consistent profits, which the carrier hadn’t seen since 2019. The company on Tuesday reported adjusted earnings of 8 cents a share for the second quarter, topping Wall Street expectations for a loss. 

At the same time, the carrier said it expects lower revenue and higher non-fuel unit costs than analysts were expecting this quarter and for the full year.

The airline is now re-focusing its network on leisure customers in New York, New England, Florida and Puerto Rico, areas where it historically has had strong operations. The company expects the change, along with improvements in on-time performance and other areas, to produce between $800 million and $900 million in additional in pretax profit from 2025 through 2027. 

JetBlue is facing the added challenge of growing without the benefit of acquisitions after federal courts struck down a regional alliance with American Airlines Group Inc. and blocked JetBlue’s planned $3.8 billion takeover of Spirit Airlines Inc.

JetBlue shares rose 4.2% in premarket trading on Tuesday. The stock had risen 6.8% this year through Monday’s close. 

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