JetBlue cuts routes to improve financial performance

By Rajesh Kumar Singh

CHICAGO (Reuters) - JetBlue Airways will eliminate a number of its routes and markets, and reduce service in Los Angeles to improve its financial performance, the company said on Tuesday.

In a memo seen by Reuters, network planning head Dave Jehn told JetBlue's crew members the airline is not faring well in some short-haul routes in western U.S. and Midwest markets, and South America.

"More than ever, every route has to earn its right to stay in the network," Jehn said.

As a result, it will stop serving markets such as Bogotá in Colombia, Quito in Ecuador, Lima in Peru and Kansas City in June.

Jehn said Tuesday's move does not change the airline's seat capacity outlook for this year, which is expected to drop by a low single-digit percentage rate from 2023.

JetBlue's earnings have been pressured by higher operating costs and uneven travel demand. Jehn said demand after the pandemic has shifted away from some routes. The collapse of JetBlue's proposed merger with Spirit Airlines has prompted the need to "refocus" in Los Angeles, he said.

The carrier is also dealing with an aircraft shortage due to a snag with RTX's Pratt & Whitney geared turbofan that powers the popular Airbus A320neo jets. In January, JetBlue said it had seven aircraft out of service, with the number expected to rise to as much as 15 by the end of 2024.

New JetBlue CEO Joanna Geraghty has vowed "aggressive action" to return the airline to profitability. The measures include deferring about $2.5 billion in aircraft capital expenditure and cutting costs through buyouts to employees in corporate, airport and customer support functions.

It is also trying to generate an extra $300 million in revenue this year.

(Reporting by Rajesh Kumar Singh; Editing by Richard Chang)