Friday, May 24, 2024

JetBlue bullish about business travel rebounds

JetBlue Airways’ corporate travel had seen a strong recovery of nearly 50 per cent, compared with 2019 levels, when the Covid-19 omicron wave hit, JetBlue president and COO Joanna Geraghty said, during the carrier’s fourth-quarter earnings call.

“We believe corporate travel will recover in a nonlinear path, similar to the shape of leisure demand,” Geraghty said. “We were encouraged to see corporate bookings recover to roughly half of 2019 levels prior to the onset of the latest wave compared to approximately one-third at the start of the quarter.”

As other carriers have reported, JetBlue said omicron hampered recovery at the end of the fourth quarter and will continue to have a dampening effect through January and February. But based on surveys and conversations with corporate customers, JetBlue expects business travel to accelerate in the second quarter and beyond. The airline anticipates its Northeast Alliance with American Airlines will play a key role in that uptick.

Geraghty added, “Through the [Northeast Alliance], we intend to gain a larger share of business travel as we are able to offer an expansive network, robust schedule as well as a superior product and service.”

“Corporate customers are very encouraged by the network offering that we have and in terms of the ability to drive more competition into the region.”

Since the launch of the Northeast Alliance, which Geraghty said in its early stages has brought in about $100 million in codeshare revenue, JetBlue announced the largest expansion of its network in the past 15 years with nine new JetBlue cities and 32 new routes. “While business travel may have been pushed out further with this latest wave, we see a strong business recovery on the horizon for this region,” she added.

JetBlue sees the launch of its transatlantic service to London as ‘disruptive,’ and it plans to further ‘bolster relevance and competition’ in the Northeast by expanding its London service from New York and adding Boston transatlantic service later this year, said CEO Robin Hayes.

Most current business travel is by individuals visiting clients, “going to build new relationships, to close the deal,” said JetBlue head of revenue and planning Dave Clark.

“The large meetings, whether external or internal, are a bit on hold for Q1. But I think once we get through omicron here and through the spring, we’ll see a return to that strong recovery that we’re seeing in the fall and have not only all these different industries growing, but different use types growing, especially some that are getting pretty largely pent-up in terms of gatherings. [They] are set to really grow in the warmer months this year.”

JetBlue reported $1.7 billion in passenger revenue during the fourth quarter, compared with $1.9 billion in the same period in 2019. Full-year passenger revenue was $5.6 billion, down from $7.8 billion reported in 2019.

The company posted a quarterly net loss of $129 million compared with net income of $161 million for the fourth quarter of 2019, and a full-year loss of $182 million versus net income of $569 million for 2019.

Capacity for the quarter was down 5.4 per cent compared with the same period in 2019. Capacity guidance for the first quarter of 2022 is a range from down 1 per cent to an increase of 2 per cent compared with the same period three years ago.  The company plans to hire more than 5,000 employees this year.

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