ANA seeks Boeing compensation
20th March 2013
JetBlue expects its aircraft on ground (AOG), as a result of the Pratt & Whitney geared turbofan (GTF) engine issues, to reach its peak in the next year or two.
The company's CFO Ursula Hurley said in the company's investor call that it continues to “work constructively” with Pratt & Whitney relating to 2026 and beyond.
“Obviously, there are a lot of inputs that can materially impact the number of aircraft that we have on the ground, everything from Pratt & Whitney supply chain to their shop capacity,” said Hurley in the call. “It does continue to remain pretty fluid. But in the next year or two, we believe that we'll be approaching the peak."
The company expects AOG to be in the mid- to high teens for 2025. In 2024, AOG averaged at 11 aircraft due to the GTF engine issue. The issue impacted JetBlue's EBIT margins by around 2.5 percentage points. The presentation detailed an approximate $150 million EBIT impact on its normal variable profit, as well as a $50 million impact from overstaffing adjusted and an approximate $25 million EBIT impact from costs related to A320 extensions. The company's full EBIT was at a negative $658 million, along with a net loss of $795 million.
Management added: “At some point, this situation will become a tailwind. We will get airplanes back. As you look at our orderbook in 2027 and beyond, it actually lines up pretty well in terms of when we think we're going to get aircraft back due to the AOG issue.”
The company expects five A220 deliveries in 2027, nine in 2028, and seven in 2029. Furthermore, the company is anticipating 17 A220s next year. For this year, the company anticipates 24 deliveries, including 20 A220s and four A321neos.
“We've also been working to extend the lives of our A320 fleet,” said Hurley. “Thus far, we've taken steps to extend 14 aircraft through a combination of lease extensions, lease buyouts and changes to the retirement dates of owned aircraft. The capacity benefits from these actions are expected to phase in over several years.”
JetBlue will retire the remaining E190 aircraft in its fleet after the summer peak and will fully replace them with the incoming A220s.
The company's CEO Joanna Geraghty confirmed the company is currently in discussions with a “number of [domestic] carries” to discuss a future partnership to replace the North East Alliance (NEA) partnership with American Airlines.
The alliance was dismantled by the US court after it concluded the partnership would have damaged domestic competition.
“The judge in Massachusetts obviously laid out a framework that would be acceptable under at least the prior administration,” said Geraghty. “So that's what we're looking at.”