by Mary Kirby in Philadelphia
Turnaround plan will see 12 deliveries deferred and up to five twinjets removed from fleet after first quarter loss
JetBlue Airways is deferring 12 Airbus A320s by up to four years and will sell up to five of its existing A320s as it slashes capacity growth in a bid to stem losses.
Neelman is delaying A320 deliveries as he seeks to stem losses
The US low-fare carrier has reported a first-quarter net loss of $32 million, against last year’s $6 million surplus for the same three-month period, in the face of soaring fuel prices. As well as the capacity cut, the airline aims to reduce costs by an estimated $70 million and will implement new revenue-generating initiatives in a bid to return to profitability.
Chief executive David Neeleman has outlined a strategic plan to return the airline to profitability, the first step of which will be to adjust the airline’s fleet.
Twelve A320s scheduled for delivery in 2007-09 will be deferred to 2011-12. JetBlue will also seek buyers for “at least” two of its A320s and “potentially up to five” of the type. The airline operates 88 International Aero Engines powered A320s and has a further 95 on order. Neeleman says Airbus and IAE “understand the challenges of the high fuel prices, and have been very flexible on deferring these, and certainly would show more flexibility if need be”.
JetBlue plans to reduce capacity in areas of its transcontinental network, shifting to better-performing transcontinental sectors, and combat high fuel prices by switching to shorter-haul services. It plans to trim its ratio of long-haul to shorter-haul flights to 1.2:1 in the middle of this year compared with 1.5:1 last year. Although the carrier’s fare structure will remain the same, average fares are expected to increase slightly.
“Taking these actions now allows us to continue to grow at a less-accelerated rate while still preserving our ability to take advantage of the market opportunities now and in the future,” says Neeleman.
Source: Flight International