Sun, December 04, 2022

JetBlue and its Mission to Modernize the Corporation

American and federal aid package

Last week one of the most famous airlines from the U.S. released the information regarding the fourth-quarter results. JetBlue Airways Corporation, stylized as JetBlue, is the sixth-largest airline in the U.S.

On Thursday, JetBlue released the fourth-quarter results. This news had a positive impact on the JetBlue shares as on January 23, shares increased by 4.7% to $20.72 and outperformed stocks of other airlines.

One of the major factors that helped to boost the shares relates to JetBlue’s ambitious plan to reduce the costs.

The New York-based corporation was able to reduce the costs by $314 million over the past three years. Interestingly, JetBlue exceeded the cost-saving target.

Total operating revenue rose by 3.2% to $2 billion in the fourth quarter compared with the same period in 2018.

As a reminder, JetBlue’s business model depends on fares, which makes it possible to compete with legacy airlines.

Airline’s target was to save from $250 million to $300 million.

However, renegotiated contacts for engine maintenance, as well as transition to an all-Airbus fleet, helped to surpass the target.

Engine maintenance is very expensive as the airline has to spend from $325 to $350 million a year to maintain its fleet.

JetBlue and new opportunitiesJetBlue's quarterly results

JetBlue wants to offer its services outside of North and South America. In 2021, it plans to launch a service to London.

Currently, it flies to 102 cities in the United States, Caribbean, and Latin America. Furthermore, the airline plans to increase its capacity by between 5.5% and 7.5% this year.

The airline offers perks such as extra legroom in coach and free Wi-Fi. Thus, the corporation should balance between product and cost.

Thanks to positive results, the airline will have the opportunity to offer budget-friendly airfares over the next decade. It is not an easy task, but JetBlue remains competitive in the market.

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