JetBlue Focuses on Cost Reductions by 2020
Joe Cortez December 14, 2016
Airline wants to cut $300 million from books over next four years.
After a period of rapid expansion, JetBlue Airways is looking to reduce their costs by as much as $300 million by 2020. Skift reports that the announcement came during the airline’s investor day on Dec. 13.
After investing in premium product Mint, executives for the airline told investors that their new goal was to increase revenues by cutting costs while not reducing the passenger experience. Through initiatives including adding checked bag fees and increasing seating capacity on aircraft, the airline wants to bring their revenues in line with the three major legacy carriers.
“There was a period when we had to make significant investments,” JetBlue chief executive Robin Hayes said, as quoted by Skift. “But now we appreciate, in this landscape of increased competition, the importance of cost.”
In order to reduce costs without cutting corners in the cabin, the airline has outlined four different areas to ultimately reduce their overhead. The biggest savings will come from aligning maintenance efficiency for their aircraft fleet. This includes lining up aircraft maintenance outages with plans to add additional rows of seats to Airbus A320 aircraft.
In addition, the airline plans on focusing more on automation both within the company and at airports. The New York-based carrier announced a focus on “corporate automation” at their headquarters, while increasing self-service options at airports, including self-check in kiosks. Executives did not announce staff reductions, but instead claim the “automation” would allow workers to focus on other tasks.
Other cost-savings identified by the airline include reducing distribution costs through online travel agencies and third-party providers. Executives said they want more flyers to book directly through the JetBlue website, instead of other avenues.
[Photo: Shutterstock]
How is it that adding checked bag fees and cramming more seats in a plane don't "reduce the passenger experience"?
I stopped flying JetBlue because of their terrible on time performance. I do miss the cabin experience, but hey if they're looking to get rid of it, that certainly reassures me in my decision to leave them.
How about adding seats int the cargo hold for those really cheap fares. No air, no heat, it will be a great experience! Wheee, only $25US round trip.
So they are taking the reasons why people fly jetBlue instead of the big 3 away so they can race to the bottom like the big 3. Typical bean counter run business...