First Free Story (1 of 3)Join Skift Pro
SKIFT GLOBAL FORUM | SEPTEMBER 21-23 | ONLINE CONFERENCE | THE DECADE AHEAD: SAFEGUARDING TRAVEL’S FUTURE
JetBlue Airways executives had planned to spend much of this year fighting for airport access in Europe, where the airline wants to expand. Instead, they have been fighting for survival.
On the surface, the airline should be insulated from some of the worst of the Covid-19 pandemic. JetBlue is a leisure airline, and most of its business comes in the domestic market, so it does not face the same pressures as, say, United Airlines, which made its profits flying business customers to Europe and Asia.
But JetBlue is based in New York City, and it has a robust focus city at John F. Kennedy International Airport. In the spring, the city faced a massive Covid-19 outbreak, and while health conditions have improved, many airlines report air travel demand in the New York region remains depressed.
To compensate, JetBlue has been hunting for new markets, many outside its usual sphere of influence. Some airports where JetBlue is growing, like Pittsburgh, Cleveland and Providence, Rhode Island, are probably short-term plays, with the airline hoping it can generate cash this winter flying to Florida.
But others, including Los Angeles and Newark, are part of a new long-term strategy. After being shut out for years at some gate-constrained airports, JetBlue wants to turn this crisis into future opportunities.
JetBlue president Joanna Geraghty will speak Tuesday at the Skift Global Forum. We conducted an email interview with her to preview the discussion.
Skift: How is business? Now that we are almost in fall, has the summer recovery stagnated?
Geraghty: Based on forward bookings and current planning assumptions, we are estimating our third quarter revenue to decline approximately 80 percent, year-over-year. While demand has improved materially from the historical lows we saw in April, bookings remain choppy, and we remain focused on addressing changing trends as we progress through the summer.
Skift: On previous earnings calls, you spoke about an L-shaped recovery. Is that still your expectation?
Geraghty: It is likely that recovery will not be linear, but our smaller size allows us to respond quickly to changes in demand. We are confident that our low-cost, low-fare, leisure model, coupled with our trusted brand will be instrumental in navigating recovery.
Skift: You’re expanding at two main airports, Newark and Los Angeles. What opportunity do you see?
Geraghty: LAX has become one of our most successful and profitable Blue cities and we see a lot of potential in the long-term to grow both domestically and internationally. Until now, we’ve not been able to secure space to grow but with the support of LAWA, the airport operator, we now have a path to expand. Today we offer about 20 flights per day at LAX and have plans to grow to about 70 flights per day by 2025.
Expanding our New York focus city presence to include more flying at Newark brings more choices to our NYC metro area travelers. Mint and leisure destination, for example, have performed very well for us in New York. Some of our transcon and leisure destination flying has remained strong throughout the downturn and we expect demand in Newark to be similarly strong.
Skift: You recently announced a bunch of new routes to Florida, including many from cities that never had much JetBlue service, including Philadelphia, Cleveland, Portland and Seattle. Is this part of a long-term strategy? Or is this mostly about making money for one winter, during a pandemic?
Geraghty: We continue to play offense in the face of the continuing impact of the coronavirus pandemic on our business. With low demand continuing in many parts of our network, this fall and winter we’ll deploy some of fleet into new markets where there is a stronger demand for air service.
By going to the places people want to fly in the short term, we can get immediate cash coming into the business to help us through this difficult time. Particularly now, we need to be flexible and move around capacity into routes that may be untraditional for us but reflect potentially temporary demand changes.
Skift: Is Europe still on the horizon? Are you fearful long-haul international routes may not recover for a while?
Geraghty: We believe there is pent-up demand for leisure travel, including for travel on transatlantic routes. JetBlue will continue with plans to launch and operate flights to London in 2021, a market still ripe for disruption with low fares and great service.