JetBlue retools with new CEO Joanna Geraghty, aviation veteran
A JetBlue Airways plane prepares to depart New York’s LaGuardia Airport.
Leslie Josephs | CNBC
In the past 24 years JetBlue Airways‘ first flight, the New York-based airline has pushed the envelope for a carrier of its size. Now, with some veteran hires and cost cutting, he’s trying to get back to basics.
JetBlue pioneered in-seat entertainment, free Wi-Fi, great snacks and a business-class cabin with lie-flat seats that featured lower prices than competitors. Recently, he has crossed the Atlantic with flights to London, Paris, Amsterdam and Dublin. And, until a judge blocked the deal last month, they planned to buy a budget airline Spirit Airlines for $3.8 billion. (The carriers are appealing that decision.)
While JetBlue has never had big ideas, it has fallen short on profits, cost control and reliability. These challenges will be top of mind for incoming CEO Joanna Geraghty when she takes the helm on Monday, replacing Robin Hayes.
Geraghty, 51, has been at JetBlue for nearly two decades, most recently as president and chief operating officer. By naming its CEO, the company is promoting a messenger who knows the complexities of running an airline with quirks like New York’s congested airport.
Joanna Geraghty, president and chief operating officer of JetBlue Airways Corp., speaks during a panel session at the World Aviation Festival in London, UK, on Thursday, September 5, 2019.
Chris Ratcliffe | Bloomberg | Getty Images
“The main strategic challenge we’ve always faced is how do we succeed as a small player in an industry dominated by four large airlines,” Geraghty said on a Jan. 30 earnings call, referring to American, Delta, United and Southwestwhich controls about 80% of the domestic market.
Last week, JetBlue said it has hired the airline’s former chief commercial officer, Marty St. George, 59, appointed as president. St George left the carrier in 2019 after 13 years and most recently worked at Latam Airlines as chief commercial officer. St. John’s is held in high esteem by industry watchers. George, who previously held positions at United Airlines and US Airways, for his knowledge and good relationship with frontline staff.
“Marty will be a much-needed force for JetBlue to improve the airline’s operational focus and reliability,” said Henry Harteveldt, a former airline executive who runs the consulting firm Atmosphere Research Group. no difference with Legroom, no difference in snacks if your menu can’t be trusted.
JetBlue promoted Warren Christie, previously head of safety, security, fleet operations, and airports, to take over Geraghty’s role as COO.
Back to basics
Geraghty, who declined to make JetBlue available for an interview, must convince investors and customers about the company’s turnaround.
JetBlue’s last annual profit was in 2019, before the pandemic. Wall Street analysts don’t expect it to turn a profit until 2025, while other carriers have already returned to profitability in the post-Covid travel boom. JetBlue shares are down 29% over the past 12 months, while the NYSE Arca Airline index is up nearly 6% over that period.
JetBlue ranked ninth in punctuality for US airlines from January through November 2023, with less than 67% of its flights arriving on time, according to the Department of Transportation .
“As we operate in one of the most complex and challenging airspaces, operational reliability is fundamental to all our priorities, helping us deliver a better customer experience while improving revenue with fewer refunds and brokerage vouchers and better costs while reducing overtime and overhead. pay,” Geraghty said on the earnings call.
The company plans to detail the $300 million in new revenue initiatives at an investor day in May, and said last month it expects up to $200 million million to cut costs by the end of the year.
“We’ve been served the food but the main course isn’t until investor day,” said Brett Snyder, president of travel assistance company Cranky Concierge and site Cranky Flier. “They’re hiring the right people. I’m cautiously optimistic for the first time in years.”
JetBlue has recently announced some cost-cutting measures: offering employee buyouts, canceling some capital expenditures on aircraft, cutting unprofitable routes, and reducing frequencies on some routes to prioritize to provide aircraft for moneylenders such as high leisure travel and the steady business from customers visiting friends and relatives. .
Snyder said JetBlue needs to take a long, hard look at its network to cut what isn’t working, and make tough decisions, such as adding more slack in the system to improve operations.
“Customers expect good service, and when they don’t get it, they’re vocal about it,” Geraghty said in a 2019 interview with CNBC. She said the airline at the time was “a ‘ leaving that awkward teenage stage and becoming an adult.”
Spirit up in the air
JetBlue’s most aggressive expansion was its pursuit of budget carrier Spirit Airlines. He made a surprise offer to the carrier in April 2022 when Spirit had already agreed to join other discounts Frontier Airlines.
A JetBlue Airways plane sits on the tarmac at Fort Lauderdale-Hollywood International Airport on January 31, 2024 in Fort Lauderdale, Florida.
Joe Radle | Getty Images
Spirit shareholders ultimately rejected the cash-and-stock deal with Frontier and voted in favor of JetBlue’s acquisition of Spirit, a deal JetBlue argued would allow it to better compete against rivals when aircraft and space are limited. to grow in the US
The Justice Department sued to block the deal in March 2023, arguing it would reduce competition, and in January a federal judge sided with the DOJ.
JetBlue and Spirit said they are appealing the decision, though analysts are skeptical of a reversal. Investors have so far expressed relief that JetBlue would not be paying $3.8 billion for Spirit, which had a market capitalization of $726 million as of Friday’s close.
Spirit executives last week sought to calm concerns about the airline’s future without a possible JetBlue takeover, even as Spirit navigates rocky financial footing. partly due to the memory of the Pratt & Whitney engine that underpins dozens of their planes.
Geraghty said last month that JetBlue did not agree with the judge’s decision to block the merger and said that if the airlines do not win their appeal, “We have to be done with the plan our organic