JetBlue Cuts Flights, Parks Some Jets As Weak Travel Demand Deepens Profit Woes

JetBlue Airways CEO Joanna Geraghty told employees in an internal memo obtained by CNBC that the airline is implementing new cost-cutting measures as softer-than-expected travel demand makes achieving break-even margins increasingly unlikely this year.

“We’re hopeful demand and bookings will rebound, but even a recovery won’t fully offset the ground we’ve lost this year and our path back to profitability will take longer than we’d hoped. That means we’re still relying on borrowed cash to keep the airline running,” Geraghty told staff in a letter dated Monday.

Some of those cost-cutting actionsinclude:

Further flight reductions

Halting aircraft retrofits

Parking some Airbus jets

Restructuring and downsizing parts of the leadership team for efficiency

Last year, the proposed merger between JetBlue and Spirit Airlines terminated after a federal judge blocked the deal due to antitrust concerns. The Justice Department under the Biden-Harris regime argued that the merger would harm consumers.

In markets, shares of JetBlue traded 5% lower in premarket trading. On the year, shares have tumbled 42% on the year as of Monday’s close.

Preliminary data from the Transportation Security Administration shows that solid demand has held steady so far this summer, with peak travel volumes expected in the late July to early August window.

Geraghty was not entirely clear about the cause behind the softer demand.