Positions JetBlue to focus on organic strategy
and return to profitability
JetBlue (NASDAQ: JBLU) today announced that it has reached an
agreement with Spirit Airlines (NYSE: SAVE) to terminate their July
2022 merger agreement.
Although both companies continue to believe in the
procompetitive benefits of the combination, JetBlue and Spirit
mutually agreed that terminating is the best path forward for both
companies as required closing conditions, including receiving
necessary legal and regulatory approvals, were unlikely to be met
by the merger agreement’s outside date of July 24, 2024.
“We believed this merger was worth pursuing because it would
have unleashed a national low-fare, high-value competitor to the
Big Four airlines,” said Joanna Geraghty, chief executive officer,
JetBlue. “We are proud of the work we did with Spirit to lay out a
vision to challenge the status quo, but given the hurdles to
closing that remain, we decided together that both airlines’
interests are better served by moving forward independently. We
wish the very best going forward to the entire Spirit team.”
Under the agreement, JetBlue will pay Spirit $69 million and the
termination resolves all outstanding matters related to the
transaction and under which any claims between them will be
mutually released.
“JetBlue has a strong organic plan and unique competitive
advantages, including a beloved brand, a unique value proposition,
and high-value geographies,” Geraghty continued. “We have already
begun to advance our plan to restore profitability. We look forward
to sharing more on our progress in the coming months.”
As outlined on the company’s fourth quarter earnings call,
JetBlue is taking decisive action to return to sustained
profitability and drive shareholder value. As part of this work,
the company is refocusing on its core strengths – deepening its
network relevance in proven geographies and better segmenting its
product offerings to enhance its competitive position – while
delivering meaningful cost savings.
To date, JetBlue has identified multiple near-term revenue
initiatives for 2024, including increased distribution and
partnerships, expanded loyalty program functionality, network
initiatives, and ancillary initiatives, which will deliver over
$300 million in revenue benefits. JetBlue also remains on track to
deliver $175-200 million in cost savings from its structural cost
program and $75 million in maintenance savings from its fleet
modernization, as well as incremental savings from targeted fixed
cost base reductions, positioning the company to approach breakeven
operating margins in 2024. These initiatives are just the starting
point as JetBlue rebuilds its long-term organic strategy with a
renewed focus on driving sustained profitability for its
crewmembers and investors.
JetBlue will hold an Investor Day on Thursday, May 30, 2024, to
provide additional detail on its long-term strategy and ongoing
revenue and cost initiatives. Further information regarding
Investor Day will be shared with analysts and investors in the
coming weeks.
About JetBlue
JetBlue is New York's Hometown Airline®️, and a leading carrier
in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San
Juan. JetBlue carries customers to more than 100 destinations
throughout the United States, Latin America, Caribbean, Canada, and
Europe. For more information and the best fares, visit
jetblue.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act and Section 21E of the
Exchange Act. All statements other than statements of historical
facts contained in this press release are forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as “expects,” “plans,” “intends,”
“anticipates,” “indicates,” “remains,” “believes,” “estimates,”
“forecast,” “guidance,” “outlook,” “may,” “will,” “should,”
“seeks,” “goals,” “targets” or the negative of these terms or other
similar expressions. Additionally, forward-looking statements
include statements that do not relate solely to historical facts,
such as statements which identify uncertainties or trends, discuss
the possible future effects of current known trends or
uncertainties, or which indicate that the future effects of known
trends or uncertainties cannot be predicted, guaranteed, or
assured. Forward-looking statements involve risks, uncertainties
and assumptions, and are based on information currently available
to us. Actual results may differ materially from those expressed in
the forward-looking statements due to many factors, including,
without limitation, the COVID-19 pandemic and government-imposed
measures to control its spread; risk associated with execution of
our strategic operating plans in the near-term and long-term; our
extremely competitive industry; risks related to the long-term
nature of our fleet order book; volatility in fuel prices and
availability of fuel; increased maintenance costs associated with
fleet age; costs associated with salaries, wages and benefits;
risks associated with doing business internationally; our reliance
on high daily aircraft utilization; our dependence on the New York
metropolitan market; risks associated with extended interruptions
or disruptions in service at our focus cities; risks associated
with airport expenses; risks associated with seasonality and
weather; our reliance on a limited number of suppliers; risks
related to new or increased tariffs imposed on commercial aircraft
and related parts imported from outside the United States; the
outcome of legal proceedings with respect to our Northeast Alliance
with American Airlines Group Inc. and our planned wind-down of the
Northeast Alliance; risks associated with cybersecurity and
privacy, including information security breaches; heightened
regulatory requirements concerning data security compliance; risks
associated with reliance on, and potential failure of, automated
systems to operate our business; our inability to attract and
retain qualified crewmembers; our being subject to potential
unionization, work stoppages, slowdowns or increased labor costs;
reputational and business risk from an accident or incident
involving our aircraft; risks associated with damage to our
reputation and the JetBlue brand name; our significant amount of
fixed obligations and the ability to service such obligations; our
substantial indebtedness and impact on our ability to meet future
financing needs; financial risks associated with credit card
processors; restrictions as a result of our participation in
governmental support programs under the CARES Act, the Consolidated
Appropriations Act, and the American Rescue Plan Act; risks
associated with seeking short-term additional financing liquidity;
failure to realize the full value of intangible or long-lived
assets, causing us to record impairments; risks associated with
disease outbreaks or environmental disasters affecting travel
behavior; compliance with future environmental regulations; the
impacts of federal budget constraints or federally imposed
furloughs; impact of global climate change and legal, regulatory or
market response to such change; changes in government regulations
in our industry; acts of war or terrorism; changes in global
economic conditions or an economic downturn leading to a continuing
or accelerated decrease in demand for air travel; and risks
associated with the implementation of 5G wireless technology near
airports that we operate in.
Given the risks and uncertainties surrounding forward-looking
statements, you should not place undue reliance on these
statements. You should understand that many important factors, in
addition to those discussed or incorporated by reference in this
press release, could cause our results to differ materially from
those expressed in the forward-looking statements. Further
information concerning these and other factors is contained in
JetBlue’s filings with the U.S. Securities and Exchange Commission,
including but not limited to, in our Annual Report on Form 10-K for
the year ended December 31, 2023 as may be updated in our Quarterly
Reports on Form 10-Q. In light of these risks and uncertainties,
the forward-looking events discussed in this press release might
not occur. Our forward-looking statements speak only as of the date
of this press release. Other than as required by law, we undertake
no obligation to update or revise forward-looking statements,
whether as a result of new information, future events, or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20240304760258/en/
JetBlue Corporate Communications Tel: +1.718.709.3089
corpcomm@jetblue.com
JetBlue Investor Relations Tel: +1 718 709 2202
ir@jetblue.com
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