JetBlue Airways will eliminate several unprofitable routes to domestic and international destinations as it looks to slash costs in the wake of its failed $3.8 billion merger with budget carrier Spirit Airlines.
The Long Island City, New York-based operator will cut almost a third of its flights out of Los Angeles International Airport in June. That includes routes to Miami, Las Vegas, and San Francisco, according to Bloomberg News, which first reported the decision. The airline will eliminate flights from Fort Lauderdale, Florida, to five cities — including Nashville, New Orleans, and Salt Lake City — and flights between Detroit and John F. Kennedy International Airport in New York.
Jetblue will completely exit Kansas City, Missouri; Newburgh, New York; Bogotá, Colombia; Quito, Ecuador; and Lima, Peru, on June 13.
“With less aircraft time available and the need to improve our financial performance, more than ever, every route has to earn its right to stay in the network,” Dave Jehn, JetBlue’s vice president of network planning and airline partnerships, said in memo to staff Tuesday. “It’s more important than ever that we are surgical about every route in our network.”
In addition to saving cash, the changes will help the airplane deal with the grounding of some of its planes for inspections of their Pratt & Whitney engines. The company will have, at most, between 12 and 15 of its aircraft idled for almost a full year, JetBlue chief financial officer Ursula Hurley said at an investor conference on Feb. 22.
The changes come just weeks after JetBlue said it would no longer contest a federal judge’s ruling against its proposed merger with Spirit. The deal would have merged the nation’s nation’s sixth- and seventh-largest carriers. It would have also helped JetBlue compete with its larger rivals.
JetBlue stock sank 1% in premarket trading Wednesday after shedding 3% after the market closed Tuesday.
Under the companies’ agreement, JetBlue will pay Spirit $69 million and resolve all outstanding matters related to the deal, such as the appeal. While the merger agreement was in effect, Spirit shareholders received about $425 million in total prepayments, according to the airline.
JetBlue has been losing money and its operations have faltered in recent years. Its woes have even opened it up to a public activist shareholder campaign from Carl Icahn, who led a successfully led a campaign against Illumina $ILMN’s acquisition of cancer test maker Grail last year. Icahn has taken a 10% stake in the company and snagged two seats on JetBlue’s board of directors.
In January, JetBlue said it expects revenue for the first quarter of 2024 to drop between 5% and 9%, while capacity for that period will be down as much as 6%. The carrier also reported a net loss of $104 million for the last three months of 2023, compared to a $24 million profit year-over-year.