Just a few months ago, JetBlue had a big plan for growth. Now they’re shrinking quickly. They offered buy out packages to non-union employees to reduce staff count. And now they’re offering to pay pilots not to fly.
This is a huge reversal, thanks to losing two Department of Justice anti-trust suits, losing a CEO, and now entering into strategic retreat.
- They had a partnership with American Airlines that gave them slots to grow in New York. They didn’t have enough planes and pilots to do that and to build in Boston. They had a plan to get bigger, though, by buying Spirit Airlines.
- Then they lost the DOJ anti-trust suit against their partnership with American. That eliminated a platform for growth.
They walked away from appealing that decision to focus on acquiring Spirit (which was odd, since they had fewer opportunities to deploy the planes and pilots they’d be buying). But they lost that suit too. It’s not yet clear whether they’ll walk away from the merger or appeal, though if they do things could drag on for years.
JetBlue has been flying a lot of money losing routes, and let that ride while their big American Airlines and Spirit Airlines strategies played out.
Now that they have a new CEO and President and are under activist pressure from Carl Icahn they are cutting unprofitable flying and looking for more revenue. They even surreptitiously raised checked bag fees on February 1 – posting new fees on their website, not making clear that they were different, and forgetting to tell anyone.
Clearly this is a troubled airline:
- Shares of the airline are down 21% in a year and 65% in three years.
- Their on-time performance has been poor.
- They’ve degraded their inflight product over the years, reducing the differentiation between them and competitors (although still offering a bit more legroom, seat back TVs, and free Wifi).
- Employees are unhappy.
Now they’re looking for volunteers among their pilots to take the month of April off – to get paid around two-thirds of their compensation not to fly.
From sources at JetBlue…
Nearly 350 pilots being offered “no-fly but paid” Voluntary Incentive Lines for April, paying 50 hours.
Over 200 Captains and nearly 100 First Officers the Company is looking to not utilize in April.
Not cheap, but cheaper than furloughs.
— Josh Hjemvick (@JHjemvick) February 22, 2024
JetBlue shares, by the way, are down 2.5% today while United’s, Delta’s and American’s were each up around 3%.
No airline ever shrank its way to profitability, or even stability.
Gary,
Nothing burger, This MOU was inked months ago (October) and VILs were expected during low months and to flex for delivery delays on the 220 and GTF problems on the 321Neo, saves the company money, and lets some pilots have a month off. Additionally contract gains were achieved in exchange for this flexibility. In fact VILs have been avail for some positions since Jan. This flexibility lasts until June of 2025.
My business pro tip to help save Jet Blue from hemorrhaging money. Since JetBlue is shrinking so much, I recommend that Jet Blue consider paying passengers not to fly, and thus, there will be no need to pay the more costly pilots not to fly.
Classic Feast and Famine business management of airlines!
Is it possible we have hit a North American plateau in overall traffic compared to the mass hiring just completed two or three seasons ago?
Big box retailers are reporting moderate to minimal growth. Tech, banking, & freight have announced layoff. And many management jobs in general are not so secure as just a year ago. In addition, the Air Traffic Control situation has not been resolved as of yet, which could lead to further delays or cancellations, especially in the Northeast.
All is not rosy in the airline business.
JetBlue’s best way forward is to hope for a change of regime in January. I like JetBlue the best of all USA carriers and it has been years since I flew on another one. I currently have a reservation in April with a return in May.
Icahn’s effect has already started. Exacty what he did at TWA. . .oh look LHR routes, we don’t need thoses, AA will give us cash. . . and so it begins.
JetBlue is America’s BEST carrier, hands down. Have been flying them for over 15 years now, no one except Delta even comes close. Better than most European domestic carriers as well ! Let’s all root for JBLU’s continued operations, and future profits and success ! #GoJetBlue ✈️
Gotta agree. JetBlue is an awesome airline. I will continue to choose them over Delta in BOS! This industry seems to ebb and flow, I’m sure JetBlue with weather this.
B6 is an operational dumpster fire. Couldn’t cope with the growth via the NEA. I doubt they could successfully manage a Spirit merger. The pilots, especially the junior ones, should be leaving for the big 3 and never look back.
With Ichann, the airline crews will need to pick up their motel room keys at with the combined gas pump/motel gas attendant (like TWA did).
This source of yours is being dramatic and has no context … The company and ALPA came up with MOU 19 back in October for these VILs in exchange for contractual gains to include significant changes to the profit sharing formula in the pilots’ benefit. In return the company has the ability to flex staffing through these VILs for the anticipated for out of service 321 NEOs w/r to the PW Engine debacle coupled with rolling delivery delays for the A220 in addition to flex with normal seasonal staffing demands. The company has this flexibility until June 2025…. good deal for those pilots that can get these, good deal for the company in terms of cost savings and good for the pilot group in terms of the long sought after enhancement to profit sharing as well as some additional contractual gains to include additional 401K contributions….It’s been misrepresented by your source as a result of the merger falling through or our latest additions to the BOD, in reality this has been planned for awhile now….. staffing flexibility for 2 yrs in exchange for contractual gains. Hopefully that adds context.
Geez let me get through these Last Two flights with this company. And then moving on forever from them
We did it Joe!!!!
Job well done by the Biden admin. United/Delta/American have their margins and interests protected, while JetBlue and Spirit collapse. Mission accomplished
become a ghetto carrier
Well again it is obvious that this guy, who is sponsored by legacy carriers, has nothing positive to say about one of the smaller guys trying to compete against the Goliath that is the legacy carrier.
JetBlue has never furloughed a single employee, while the legacy carriers have screwed over their employees time and time again by cutting their pay, laying them off, and going in and out of bankruptcy to avoid paying their employees as per their agreed upon contracts.
Here is a great article idea….write about how the employees of Delta and United and American have yet to get back to their original pay scales prior to 9/11 ( taking inflation into account). How Delta has spent more money on keeping their company as union free as possible than they have given out in profit sharing or How United continues to provide insane financial bailouts to Mesa airlines ( JO has some dirt on Kirby is my guess).
How about we focus on the fact that JetBlue started a month after 9/11 and has continued to grown and survive multiple market crashes, oil price inflation, economic instability of 2008-2009, covid….all without telling its employees they no longer have a job.
A view from the wing is a poor and one sided view from people who are given financial support from the very companies trying to destroy JetBlue/Spirit/Frontier/Allegiant/SunCountry/Avelo/Breeze.
Everyone. Please remember who wrote this article … he’s the tabloids of boarding area. In October B6 planned this and pilots agreed to VILs. It’s due to a321 NEO known engine issues and a220 delivery issues. Some months there 0 Incentive lines for FOs and like 10 for captains. I beg everyone not to read into this guys trash.
Gary… you know Pratt and Whitney , not JetBlue is paying for the small amount of Voluntery Incentive lines. I forget the amount but it’s more than $16,000 per engine per day. Gary needs more fact checking than CNN
@sunviking … has nothing to do with Ichan.
Not slashing unprofitable routes is borderline negligent. JetBlue never had the business revenue like the regular airlines did. There is no reason to maintain routes that aren’t profitable in hope those passengers will have goodwill toward the airline and book on profitable routes. Endless growth is not the answer in the airline business as the big 3 did that and are bankrupt or close to bankruptcy every 10 years.
Shrinking slightly by cutting out unprofitable routes would give JetBlue leverage to not re-sign pilot contracts, especially with ridiculous provisions. They have no leverage if they need pilots. They don’t need to worry as much if they shrink 20%. It would also help with flight attendants. JetBlue should offer 5 year contracts with a ban on re-signing any flight attendant or hiring any person who worked as a flight attendant previously. That is a good way to keep flight attendants fresh; train them right from the beginning and let them know this is not a career but 5 years of a reasonable amount of fun if they do a good job and can enjoy nice destinations in the Caribbean.
Airlines are stuck in the same mess because management keeps doing what hasn’t worked in 40 years. They have union problems but never get creative to solve those union problems and put themselves in a position where they can let contracts expire without re-signing them under duress like they usually do.
@David Arnett
JetBlue isn’t shrinking to shrink … they have their hands tied with aircraft delivery delays and engine issues from PW. That’s out of their hands. It’s unfortunate people like Gary exist in the media to mislead readers but the fact. Is all of this was known and planned for months. I Believe B6 is also selling aircraft and leasing back in order to free up cash to keep older A320 aircraft going until the A321Neos are back to capacity. I’m not sure about that last statement but I know B6 is trying to maintain their network best they can with the metal they have and not shrink. Pilot classes are still going on to replace retirements. As with recessions and other financial widespread issues… it all starts with media misinformation
Icahn is like Gordon Gecko.
Did you know there is a real (well virtual Blue Star Airlines) https://www.bluestar-va.com/
David Arnett. What a sexist thing to say. David I want you to pack your bags. Your’e fired! You’re too heavy too work here and your not as pretty as another David I can get. Nice knowing you…….How would you feel D? You or anyone is not exempt from this rationale.
Josh is a disgruntled former jetblue pilot who, while a union officer, violated professional conduct by publishing on social media private union reports, calling out pilots who filled these reports. Most of the voluntary leaves are a result of the engine issues on the new NEO airplanes that’s keeping these planes grounded for almost a year a piece. This is very irresponsible journalism.
Maybe if they didn’t give up on the west coast they’d have more profitable routes to fly. And that’s independent of giving up Long Beach because of their tantrum over trying to build an international terminal in an airport that clearly can’t support it
Icahn and his minions are now running JetBlue so it’ll be shrinking down to nothing very soon…
Is it similar situation with American West failed Chapter11 in 1991 expanded to the International route which need extensive ubternational market reseach and higher fuel cost? https://www.nytimes.com/1991/06/28/business/america-west-airlines-files-for-chapter-11-bankruptcy.html
With all the flight changes and cancellations as well as unusable credits I look forward to them shrinking down to the nothing they are.