JetBlue pulled back on its growth plans earlier this year, focusing instead on rolling out its improved Mint product. It seems to have paid off and the airline will be opportunistic about growing its fleet going forward.
The airline exceeded its revenue expectations, with total operational revenue up 12.1 percent compared to Q2 2016, and plans to the continue the expansion of its new premium Mint seats to up to 20 routes.
“Our strategy of targeted growth continues,” said Marty St. George, JetBlue’s executive vice president of commercial and planning, on the company’s earnings call this morning. “…. the core underlying demand is strong right now.”
JetBlue pulled back on its planned capacity growth earlier this year in an attempt to drive revenue. It appears to have worked, but the airline will remain cautious into the third quarter of 2017. Meanwhile, it expects its Mint product to be available on 31 aircraft by the end of the year.
JetBlue Airways ‘s potential order for Airbus A321LR planes is seen as an indication the airline will finally move into the trans-Atlantic market. For now, the company has made no decision.
“We have a lot of flexibility; we ended up deferring aircraft and retained significant flexibility,” said Steve Priest, JetBlue’s chief financial officer. “At the early start of the year to shore up revenue weakness we pulled down capacity… as we face these air traffic control challenges, we’ve actually puled down some capacity in Q3. That really shows discipline and our focus… we will react when we need to.”
JetBlue has also worked to renegotiate its distribution deals, in an attempt to earn more favorable terms than when the previous deals were negotiated and the airline was a smaller industry player.
“We are currently under a full content agreement with our [global distribution system] partners,” said St. George. “It’s important to say we continue to work through the distribution goal we [described] on investors day last year and we’re happy with the progress we’ve made.”
JetBlue executives also detailed the airline’s focus on developing its presence at New York’s JFK Airport, which for now represents operating flights out of additional slots before work begins in earnest on the redevelopment of Terminal 6.
JFK represents a key pillar of JetBlue’s planned growth into the next decade.
“The key reason we’re going forward with this is we have exclusive rights to develop the T6 space,” said Priest. “It’s valuable real estate in an incredibly congested airport… this is really about securing our long-term future.”
Check out JetBlue’s presentation below.
Photo credit: JetBlue has slowed down its capacity growth while improving its product. A passenger walks past a JetBlue advertisement at Logan International Airport in Boston, Massachusetts January 6, 2014. Bryan Snyder / Reuters