A JetBlue Airways jet comes in for a landing after flights earlier were grounded during an FAA system outage at Laguardia Airport in New York City, New York, U.S., January 11, 2023.
Mike Segar | Reuters
JetBlue Airways shares jumped 20% on Tuesday after the airline posted a surprise profit and said it would defer another $3 billion in aircraft spending through 2029 to improve cash flow.
The New York-based airline has been cutting unprofitable routes and reducing costs to get back to profitability as it faces higher expenses and an oversupplied domestic market.
It said on Tuesday that it has halted 50 routes and is focusing more on its service in New York, New England and Puerto Rico, where it has historically been strong. It also is trying to better deploy its aircraft outfitted with premium seats like its Mint aircraft to maximize revenue.
JetBlue says the changes will help it add $800 million to $900 million in pretax profit from 2025 through 2027.
The airline posted a $25 million profit for the second quarter, down nearly 82% from last year. Wall Street analysts had expected a quarterly loss.
The results and investor reaction are a win for CEO Joanna Geraghty, a JetBlue veteran who took the reins in February. Hours after she started in the top role, activist investor Carl Icahn disclosed a nearly 10% stake in the company. He won two board seats days later.
Geraghty said Tuesday the airline is taking additional steps to improve reliability, such as adding more buffer time to flights. JetBlue has consistently ranked toward the bottom of U.S. carriers.
JetBlue and Spirit Airlines called off their merger agreement earlier this year after the New York airline’s planned acquisition of the budget carrier was blocked by a federal judge. Both airlines have said they are challenged in competing with larger rivals.
This story is developing. Please check back for updates.
