Prospects for Jetblue 2023 Despite Growth Issues

November 14th, 2022
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Prospects for Jetblue 2023 Despite Growth Issues

JetBlue Airways, LLC made its first profit since before the start of the Covid pandemic in the third quarter as strong demand and increased fares helped offset downward earnings pressures.

With this week’s addition of its third daily flight, JetBlue is now anticipating the delivery of about four Airbus A321-family and A220 jets. Speaking during a recent earnings call, the airline’s president and COO Joanna Geraghty noted that due to delays in the supply chain, it has had to drop its original goal of taking 29 airplanes in 2023.

JetBlue had a challenging day on Thursday, but despite what their CEO called the weather and air traffic control challenges, they made “excellent” progress on hiring and are now close to reaching the “appropriate” staffing levels. They plan to hire 1,000 pilots by 2020 and expect traffic in 2023 to return to a mid-to high-single-digit growth rate.

While we are seeing no indications of an imminent drop-off in air travel demand, we’re still carefully monitoring the macroeconomic situation. As we look towards 2023, it’s comforting to know that our economy is much larger than it was ten years ago and only industry capacity is lower than it was 10 years ago, which suggests that our experience with a potential 2023 economic decline would be quite different from the historical responses to previous drops.

JetBlue is able to remain profitable even after a slowdown in revenue because it offers more specialized services. Additionally, the ancillary revenue base has grown significantly to provide more stability for any future downturns.

Hayes said the updated Northeast Alliance (NEA) partnership with American Airlines is really benefiting the public and that for cities like New York and Boston, there are “dozens” of new destinations and service frequencies on more than 100 routes.

The National Emergency Airline Assistance Act did what it set out to do. It brought more competition to the skies and provided better value for consumers thanks to new airline purchases. And we can now celebrate because JetBlue has announced their purchase of Spirit Airlines, which was approved on October 19th by shareholders.

Despite the Justice Department lawsuit, JetBlue remains willing to keep the NEA. It believes that their deal will increase competition for customers in New York and Boston, despite expecting that the deal might not be accepted by regulators. As a result, if just one aspect of their plan is prevented by regulators, JetBlue would pay Spirit $70 million as a “reverse break-up fee”.