Jetblue Amidst Rigorous Review of Business Strategy June 14, 2007

Licking its wounds from a customer service melt-down in February and an overall soft market, Jetblue Airways has begun a second review of its long-term business strategy. New Jetblue CEO Dave Barger has already shaved back the carrier’s growth prospects in the short-term, and is considering selling some of the carrier’s Airbus A320 aircraft to generate capital. Last year the airline sold five of its most elderly aircraft to Bluewings, a low-fare carrier based in Dusseldorf, Germany. With Airbus A320 aircraft in high demand at the moment, the sale of these aircraft has proven to be both a financially savy move and a way to reduce capacity. Within the American domestic market, most carriers have reduced their fleet sizes significantly since September 11, 2001. Until recently, Southwest Airlines and Jetblue were notable exceptions; however, even stalwart Southwest is warning that it may have to slow growth amidst a sluggish economy. So far, Barger is satisfied with Jetblue’s cost discipline, but at a recent Merrill Lynch conference, he added that “there is still opportunity for improvement.” All options are being considered to boost revenue, except the implementation of first-class, the CEO recently commented.

Sources: Reuters, Blue Wings