JetBlue Airways announced plans to delay retiring its Embraer E190 fleet, part of an effort to accommodate resurgent demand and new growth opportunities driven by its alliance with American Airlines in the northeastern U.S.
New York-based JetBlue has 60 100-seat E190s in its current fleet, of which half are leased and the rest owned. The carrier has been exploring ways to dispose of the jets as it takes delivery of 70 larger and more fuel-efficient Airbus A220-300s, four of which have been delivered so far in 2021. The E190s currently have an average age of 12 years, according to Aviation Week Intelligence Network Fleet and Data Services.
JetBlue CEO Robin Hayes, addressing investors on a conference call July 27, said that management has decided to delay the retirement schedule for the E190s after “re-examining our fleet to ensure we are well-equipped” to capitalize on strong leisure travel demand and capacity growth related to the Northeast Alliance (NEA) with American in Boston and New York City.
JetBlue CFO Ursula Hurley said the company still plans to remove the leased portion of the E190 fleet between 2023 and 2026, although she offered no details about the fate of the owned fleet. The airline plans to finish 2021 with 282 aircraft in its total fleet, up from 267 in 2020, reflecting the addition of seven A220s, three A321LRs and four A321neos in 2021.
“We’re keeping the [E190s] in the fleet to capture the Northeast Alliance opportunity that is in front of us,” Hurley said. “Delaying these retirements is a capital-light and balance sheet-friendly decision that supports the ramp-up of the NEA.”
The NEA has led to the creation of 58 total new codeshare routes out of Boston and New York, including 38 services flown by JetBlue. Hurley estimated the partnership will eventually allow the company to increase its daily flights from 175 to 220-240 at New York JFK; from 15 to 50-60 at LaGuardia; from 35 to 70 at Newark; and from 175 to 230 at Boston Logan.
“This is about providing a very formidable third competitor in our Northeast geography that will benefit customers by offering not only lower fares, but also greater competition in a much more robust network,” Hurley said.
Management is currently planning for capacity to be flat to down 3% from 2019 levels during the 2021 third quarter (Q3), marking an improvement from down 15% in the second quarter (Q2). Revenues are expected to drop 4-9% from two years ago, compared to down 29% in Q2. Non-fuel unit costs, measured in CASM-ex, are expected to rise 11-13% from 2019 levels, marking a sequential improvement from up 19% in Q2.
JetBlue posted an adjusted pre-tax loss of $309 million in Q2 versus an adjusted pre-tax income of $238 million in 2019. The airline reported consolidated Q2 revenue of $1.5 billion, a seven-fold increase over Q2 2020. Operating expenses more than doubled year-over-year to $1.4 billion, leading to a $147 million operating profit for the June quarter. JetBlue posted a $64 million net profit for Q2 2021, reversing its $320 million net loss in Q2 2020.
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