A JetBlue Airways jet comes in for landing after planes were grounded during an FAA system outage at LaGuardia Airport in New York City on January 11, 2023.
New Mike | Reuters
JetBlue Airways Shares rose 20% on Tuesday after the airline reported a surprise profit and said it would defer another $3 billion in aviation costs through 2029 to improve cash flow.
The New York-based airline, facing high costs and an oversupplied domestic market, has been shedding unprofitable routes and cutting costs to return to profitability.
On Tuesday it said it was dropping 50 routes and focusing more on its service to New York, New England and Puerto Rico, where it has historically been strong. It tries to better utilize its planes with premium seats like its Mint plane to increase revenue.
JetBlue says the changes will help it add $800 million to $900 million in pretax profits from 2025 to 2027.
The airline posted a profit of $25 million in the second quarter, down nearly 82% from last year. Wall Street analysts had expected a quarterly loss.
The results and investor reaction were a win for JetBlue veteran CEO Joanna Geraghty, who took the helm in February. Hours after he started in the principal role, activist investor Carl Icahn released a nearly 10% stake in the company. Two days later he won the board seats.
Geraghty said on Tuesday that the airline is taking additional steps to improve reliability, such as adding more buffer time to flights. JetBlue is consistently ranked among the lowest US carriers.
JetBlue and Spirit Airlines Their merger deal was called off earlier this year after a federal judge blocked the New York airline’s takeover of the budget carrier. Both airlines have said it is challenging to compete with larger rivals.
This story is developing. Check back for updates.
