A JetBlue Airways jet comes in for a landing after flights earlier were grounded during an FAA system outage at Laguardia Airport in New York City, New York, U.S., January 11, 2023.Â
Mike Segar | Reuters
JetBlue Airways shares jumped 20% on Tuesday after the airline posted a surprise profit and said it would defer another $3 billion in aircraft spending through 2029 to improve cash flow.
The airline posted a $25 million profit for the second quarter, down nearly 82% from last year. Wall Street analysts had expected a quarterly loss.
The New York-based airline has been cutting some routes and reducing costs to get back to profitability as it faces higher expenses and an oversupplied domestic market. It hasn’t posted an annual profit since before the pandemic.
It said on Tuesday that it has halted 50 routes and is focusing more on its service in New York, New England and Puerto Rico, where it has historically been strong. It also is trying to better deploy its aircraft outfitted with premium seats like its Mint aircraft to maximize revenue.
JetBlue says the changes will help it add $800 million to $900 million in pretax profit from 2025 through 2027.
It’s deferring delivery of 44 Airbus A321neo aircraft until 2030 or later. The airline has also impacted by a Pratt & Whitney engine recall.
“We have and are taking aggressive action on every front,” CEO Joanna Geraghty said on an earnings call on Tuesday.
Geraghty said Tuesday the airline is taking additional steps to improve reliability, such as adding more buffer time to flights. JetBlue has consistently ranked toward the bottom of U.S. carriers.
The airline plans to cut capacity by as much as 6% in the third quarter and as much as 5% for the full year. Even with the cuts it expects third-quarter revenue to drop as much as 5.5% from last year and full-year sales to be down as much as 6% over 2023.
Geraghty, a JetBlue veteran, took the reins in February. Hours after she started in the top role, activist investor Carl Icahn disclosed a nearly 10% stake in the company. He won two board seats days later.
JetBlue and Spirit Airlines called off their merger agreement earlier this year after the New York airline’s planned acquisition of the budget carrier was blocked by a federal judge. Both airlines have said they are challenged in competing with larger rivals.
This story is developing. Please check back for updates.
