“The recovery in air travel has come more quickly than we expected… Vaccines have clearly catalyzed customer confidence.” With that opening statement, JetBlue CEO Robin Hayes launched a mostly optimistic recap of the carrier’s second quarter finances.
International travel remains a drag, however, with uncertainty about borders reopening and testing rules. As a result, the company’s new London service will launch a bit more slowly than previously expected.
A little less London
The inaugural flight to London will still operate on August 11th. But the trip is no longer sold out. Even some Mint seats up front are now available on board. That’s a rough blow for the first flight, but easy to understand given quarantine restrictions for most travelers arriving into the UK.
Given the limited demand from travelers the company expects to drop service on select dates into September and beyond. A disappointment in many ways – CEO Robin Hayes calls it “frustrating” – but also very understandable.
Service drops to 4x weekly (Sunday, Monday, Wednesday, Friday eastbound, day later westbound) in September. Later dates will be evaluated on a month-by-month basis.
A lot more Embraer
JetBlue also expects to keep its Embraer E190 fleet longer than previously planned. The new NorthEast Alliance (NEA) efforts with American Airlines are proving more successful than expected and the company now needs the additional aircraft to support the growth over the coming years.
JetBlue’s 60 E190s are split between 30 owned and 30 leased. The leased aircraft are expected to be returned from 2023-2026 as the terms expire. The owned aircraft, however, will remain in service rather than retire as the initial schedule called for.
The planes have not seen much in the way of updates since their induction and the company previously indicated only basic maintenance would occur given the planned retirement. It is unclear if the planes will receive a much-needed interior refresh given their extended life in the fleet.
The Embraer fleet sticking around will not derail the A220 or A321neo growth. Those remain the future of the JetBlue fleet plan.
NEA Cost Pressure
Building out for the alliance with American carries costs beyond just keeping the Embraer fleet around longer than expected. JetBlue expects a 2-4% increase is CASM-ex fuel in 2022 because of investments associated with the deal. They include increased rent, landing fees, and staffing expenses at Newark and LaGuardia, two of the higher-cost airports in the network.
Those costs will hopefully deliver returns, however, with demand already increasing as a result of the NEA. JetBlue also says that it is seeing a boost to its loyalty program as a result of the partnership, though details are scarce.
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