JetBlue Unveils Cost-Cutting Plan Worth Up to $300 Million by 2020
December 13 2016 - 1:10PM
Dow Jones News
JetBlue Airways Corp. is expected to announce cost-cutting
initiatives that will deliver $250 million to $300 million in
structural savings by 2020 in a presentation to investors
Tuesday.
New York-based JetBlue also said it plans to double its
stock-repurchase authorization to $500 million through 2019.
Earlier, it had approved $250 million of buybacks through 2018, and
the company bought $120 million of stock in an accelerated share
buyback in the current quarter.
Two years ago, JetBlue outlined a plan aimed at boosting its
revenue and on Tuesday reaffirmed it is on track to realize that
goal of $415 million in improvements. Among the components: more
revenue from an array of fare options that give passengers more
choice in ticket prices and amenities; a new branded credit card
agreement that is driving increased customer spending; and adding
seats to its aircraft.
On top of that, JetBlue's premium Mint service, only available
on certain long-haul flights, is boosting operating margins on
routes where the outfitted planes operate, the company said.
JetBlue is rolling out new Mint planes and routes, with the
eventual goal of offering 70 or more daily flights to 13
destinations on the two U.S. coasts and in the Caribbean.
Currently the nation's fifth-largest carrier by traffic, JetBlue
is shifting some of its attention to cost savings, mainly in the
areas of maintenance, airports and crew scheduling. The steps will
include introducing software tools to allow its technical and
spare-parts operations to run more efficiently, updating its crew
resources capabilities to optimize crew scheduling, and adding more
sophistication to its airport kiosks so passengers can handle rote
transactions on their own.
Jim Leddy, JetBlue's interim chief financial officer, said the
cost-saving steps will be phased in over three years and should
yield permanent structuring savings by 2020.
In the investor presentation, JetBlue said it expects to
increase its capacity in 2017 by 6.5% to 8.5%, with the most growth
on transcontinental routes, and on the East and West coasts. It
expects its unit cost excluding fuel to rise by 1% to 3% next
year.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
December 13, 2016 12:55 ET (17:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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