JetBlue Airways has outlined a long-term plan to drive shareholder returns through new and existing initiatives that are expected to collectively generate more than $400 million in annual operating income on a run rate basis beginning in 2017.
JetBlue has deferred 18 Airbus aircraft scheduled for delivery from 2016-2018 to 2022-2023 in a bid to reduce capital expenditures by more than $900 million through 2017 and allow the airline to optimize its fleet to better match capacity with demand.
Robin Hayes, JetBlue's President, said: "We believe the plan laid out today benefits our three key stakeholders. It delivers improved, sustainable profitability for our investors, the best travel experience for our customers and ensures a strong, healthy company for our Crewmembers. As we focus on executing this plan, JetBlue's core mission to Inspire Humanity and its differentiated model of serving underserved customers remain unchanged."
The airline has announced it will maintain unit cost (excluding fuel and profit sharing) growth below two percent through 2017 with longer-term gains from a number of avenues including gradually upgauging the fleet with larger A321s on order and increasing the number of seats on its A320 fleet as part of a major cabin refresh.
"Today we announced actions that we've been working for some time to enhance JetBlue's revenue performance, control costs and reduce capital commitments through 2017," said Mark Powers, JetBlue's Chief Financial Officer. "As we execute this plan and continue to grow, we also seek to drive significantly improved returns for our shareholders. We believe our strategy, in combination with the additional initiatives discussed today, keep us on a path to enhance long-term shareholder value."
The initiatives discussed by JetBlue leadership include offering three branded fare bundle options; refreshing its A320 interiors with lighter and additional seats; launching additional Mint services; and upgrading its aircraft with WiFi.