In a memo to their 23,000 crewmembers on Wednesday, JetBlue’s CEO Robin Hayes and President & COO Joanna Geraghty outlined the gravity of the impact the carrier is facing from the global COVID-19 pandemic.
Today, in a memo to their 23,000 crewmembers, JetBlue’s CEO Robin Hayes and President and COO Joanna Geraghty explained the gravity the global COVID-19 pandemic is having on the carrier’s revenues. As explained in the announcement, last March the airline typically earned around $22 million daily from bookings and ancillary revenues. In the last several days, that revenue has fallen to less than $4 million daily, while the company is issuing over $20 million in credits each day for cancelled bookings. The announcement further stated in part,
“Even though we entered this from a position of strength with a strong balance sheet and cash in the bank, because of the dramatic fall-off in bookings, we need to reduce our spending immediately so we can continue to fund JetBlue’s operations and ensure your jobs are protected. We have already announced an initial capacity reduction, pay cuts for our officers (VPs and above), voluntary time off programs, re-negotiated Business Partners agreements, and other spending reductions.”
Considering reduced demand, JetBlue will cut capacity by at least 40% for April and May and expects substantial cuts in June and July. The carrier will also ground some aircraft and is working with Airbus for opportunities to slow new aircraft deliveries and reduce pre-delivery payments (PDPs). Company CEO Robin Hayes and President and COO Joanna Geraghty have taken a 50% pay reduction until further notice and the carrier has paused or terminated 75% of capital expenditure projects. Although the company entered the crisis with about 1.2 billion in cash, they are bleeding millions daily and, with the rest of the industry, are calling on the U.S. government for immediate relief. In the meantime, JetBlue has secured and additional $1 billion credit line to help fund short-term operations during the crisis.
JetBlue operates over 1,000 daily flights to around 100 destinations in the U.S., Caribbean and Latin America. The New York-based airline carries more than 42 million passengers annually and maintains robust operations in New York, Boston, Fort Lauderdale, Orlando, San Juan and Los Angeles (Long Beach).
Editor's Note: We stand by the entire JetBlue team and all airlines during this difficult period as the entire world fights to limit the transmission of, and ultimately recover from, the global COVID-19 pandemic. Once it has been defeated, we look forward to the emergence of an even stronger and more robust global commercial airline industry.