A JetBlue Airways plane prepares to land after previous flights were grounded during an FAA system outage at LaGuardia Airport in New York City, New York, U.S., January 11, 2023.
Mike Segar | Reuters
JetBlue Airlines Shares rose 20% on Tuesday after the airline posted a surprise profit and said it would defer another $3 billion in aircraft expenses until 2029 to improve cash flow.
The airline posted a second-quarter profit of $25 million, down nearly 82% from a year earlier. Wall Street analysts had expected a quarterly loss.
The New York-based airline has been cutting some routes and reducing costs to return to profitability as it faces higher expenses and an oversupplied domestic market. It has not posted an annual profit since before the pandemic.
On Tuesday, the airline said it has suspended 50 routes and is focusing more on its service in New York, New England and Puerto Rico, where it has historically been strong. It is also trying to better utilize its planes equipped with premium seats, such as its Mint aircraft, to maximize revenue.
JetBlue says the changes will help it add between $800 million and $900 million in pretax profit between 2025 and 2027.
The airline has postponed delivery of 44 Airbus A321neo aircraft until 2030 or later. The airline has also been affected by a Pratt & Whitney engine recall.
“We have taken and are taking aggressive action on all fronts,” Chief Executive Officer Joanna Geraghty said on an earnings call Tuesday.
Geraghty said Tuesday that the airline is taking additional steps to improve reliability, such as adding more wait time to flights. JetBlue has consistently been near the bottom of the list of U.S. airlines.
The airline plans to reduce capacity by up to 6% in the third quarter and by up to 5% for the full year. Even with the cuts, it expects third-quarter revenue to fall by up to 5.5% from last year and full-year sales to decline by up to 6% in 2023.
Geraghty, a JetBlue veteran, took the reins in February. Hours after she took over, activist investor Carl Icahn disclosed a nearly 10% stake in the company. Days later, she landed two board seats.
JetBlue and Spirit Airlines The two companies called off their merger agreement earlier this year after a federal judge blocked the New York-based carrier's planned acquisition of the budget carrier. Both airlines have said they are struggling to compete with larger rivals.
This story is developing. Please check back for updates.
