JetBlue Airways is in initial discussions with the city of Long Beach about international flights, defers 18 Airbus deliveries, changes its seat pitch and will charge for checked bags

JetBlue Airways (New York) wants to add international routes from its noise-sensitive focus city of Long Beach, California. The airline has started initial discussions with the city but faces an uphill battle to gain international routes at LGB.

Read the full report from the Press-Telegram: CLICK HERE

In other news, JetBlue today issued this strategy statement to retain shareholder value:

JetBlue logo-1

JetBlue Airways today outlined a long-term plan to drive shareholder returns through new and existing initiatives aimed at enhancing the Company’s product advantage and service-oriented culture while delivering improved financial results. The revenue initiatives are expected to collectively generate more than $400 million in annual operating income on a run rate basis beginning in 2017.

Additionally, JetBlue announced the deferral of 18 Airbus aircraft scheduled for delivery from 2016-2018 to 2022-2023 which will reduce capital expenditures by more than $900 million through 2017 and allow the airline to optimize its fleet to better match capacity with demand.

JetBlue Fleet Optimization

Robin Hayes, JetBlue’s President, said, “We believe the plan laid out today benefits our three key stakeholders. It delivers improved, sustainable profitability for our investors, the best travel experience for our customers and ensures a strong, healthy company for our Crewmembers. As we focus on executing this plan, JetBlue’s core mission to Inspire Humanity and its differentiated model of serving underserved customers remain unchanged.”

JetBlue is committed to maintaining its competitive cost position. Specifically, JetBlue announced it will maintain unit cost (excluding fuel and profit sharing) growth below two percent through 2017 with longer-term gains from a number of avenues including gradually upgauging the fleet with larger A321s on order and increasing the number of seats on its A320 fleet as part of a major cabin refresh.

“Today we announced actions that we’ve been working for some time to enhance JetBlue’s revenue performance, control costs and reduce capital commitments through 2017,” said Mark Powers, JetBlue’s Chief Financial Officer. “As we execute this plan and continue to grow, we also seek to drive significantly improved returns for our shareholders. We believe our strategy, in combination with the additional initiatives discussed today, keep us on a path to enhance long-term shareholder value.”

The initiatives discussed by JetBlue leadership included:

Fare Families / Branded Fares — Beginning in the first half of 2015, customers will be able to choose between three branded fare bundle options. The first of these will be designed for customers who do not plan to check a bag, while the latter two will offer one and two free checked bags, respectively, along with other attractive benefits, including additional TrueBlue points and increased flexibility. This new merchandising platform will enable JetBlue to tailor its offering to individual customers’ needs in a way that is simple and transparent.

Airbus A320 Cabin Refresh — JetBlue will build on the successful launch of its Airbus A321 fleet, which has been received with great customer acclaim, by outfitting its A320 aircraft with a similar refreshed cabin. The reconfigured cabin plan for the A320 will preserve JetBlue’s product advantage and highly-rated customer experience while helping to generate higher returns. Using lighter, more comfortable seats, JetBlue will be able to increase the number seats on its planes while continuing to offer the most legroom in coach. Retrofits of the Airbus A320 fleet are expected to begin in mid-2016 and will also include larger seatback screens with more entertainment options and power ports accessible to all Customers.

JetBlue Mint logo

Mint — JetBlue’s new premium service, which is exceeding expectations in its ramp up on the JFK-SFO and JFK-LAX routes, is significantly improving transcontinental margin performance. JetBlue plans to continue rolling out additional Mint service in JFK-LAX through the fourth quarter of 2014 and in JFK-SFO through the first quarter of 2015.

JetBlue Fly-Fi Banner

Fly-Fi — JetBlue customers will continue to enjoy free access to the fastest in-flight Wi-Fi product in the industry while the company pursues a unique new monetization strategy including partnerships with Verizon, the Wall Street Journal, Time, and others. The entire Airbus A320/A321 fleet is expected to have Fly-Fi in the first half of 2015, with Embraer 190 installations beginning thereafter.

Even More — With dynamic pricing, JetBlue’s extra legroom product continues to offer customers industry-leading comfort and value and represents a growing source of ancillary revenue.

Is this the right decision? Will it turn off its loyal customers? Read the analysis by Bloomberg Businessweek: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A320-232 N592JB (msn 2259) in the Barcode design lands at Long Beach.

JetBlue Airways aircraft slide show: AG Slide Show

Current routes from LGB:

JetBlue LGB 11.2014 Route Map