JetBlue among first US airlines to seek waivers to suspend flights to 12 cities
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JetBlue Airways is seeking approval to suspend service to 12 cities as it faces near-zero passenger demand during the novel coronavirus pandemic.
The request is among the first by U.S. carriers for exemptions to the air service requirements attached to the more than $50 billion in aid available under the government’s coronavirus stimulus package, officially known as the CARES Act. New York-based JetBlue has applied for some of the $25 billion in grants earmarked for airline staff compensation.
JetBlue proposed suspending service to the 12 cities from April 15 to June 10, according to a filing with the Department of Transportation on Wednesday. If approved, JetBlue would temporarily halt service to Albuquerque (ABQ); Bozeman, Montana (BZN); Dallas/Fort Worth (DFW); Houston Bush Intercontinental (IAH); Minneapolis/St. Paul (MSP); Palm Springs, California (PSP); Portland, Oregon (PDX); Reno (RNO); Sacramento (SMF); Worcester (ORH), Massachusetts; and the airports serving Aguadilla (BQN) and Ponce (PSE) in Puerto Rico.
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“There are so few customers traveling to justify even the reduced service levels required by the [CARES Act], and a rigid interpretation of the [air] service obligation will only threaten to unnecessarily diminish JetBlue’s liquidity,” the airline said in its filing. Liquidity refers to the amount of cash a company has on hand to pay its bills.
Airlines are required to maintain a minimal level of air service to all of the destinations in the U.S. they serve in exchange for CARES Act funds. The only exception is for large metropolitan regions served by multiple airports designated by the DOT or a special exemption, such as the one JetBlue sought on Wednesday.
Other airlines have sought creative ways to meet the requirements.
Alaska Airlines is consolidating routes to 12 cities by “tagging” flights to six of them on to existing service to the other six cities. American Airlines is suspending many nonstop flights to its nine domestic hubs and focusing on maintaining service to primarily its two largest bases in Charlotte (CLT) and Dallas/Fort Worth (DFW).
JetBlue previously unveiled plans to temporarily suspend flights to eight airports in the Boston, Los Angeles, New York, San Francisco and Washington areas, consolidating its operations in each of those areas at a smaller number of airports. Those cuts come amid an 80% cut in system capacity by the carrier.
The airline’s size varies widely in each of the 12 airports where it wants to suspend flights. JetBlue is the sole carrier serving Ponce. It was also the largest at both Aguadilla and Worcester airports last year. But at Bozeman, Dallas/Fort Worth, Houston, Minneapolis and Portland, the airline had less than a 1% share of passengers in 2019, according to DOT data via Cirum.
The CARES Act leaves it to the DOT to determine what air service is “reasonable and practicable” for airlines to receive funds to continue. However, there are some situations where the decision may be made for the DOT, for example in Aguadilla and Ponce where the Federal Aviation Administration and government of Puerto Rico have agreed to close the airports to commercial service.
In addition, JetBlue notes that it only serves Palm Springs seasonally in the winter and had suspended service for the summer as previously planned on March 27.
“JetBlue fully intends to gradually resume service to the levels prescribed in the [CARES Act] at each of these airports as soon as it is both safe to do so and when even the slightest customer demand re-emerges,” the airline said.
However, former Hawaiian Airlines network analyst Adam Nathan pointed out on Twitter that “it’s hard to restart service and re-stimulate a market once you drop it for a while.”
I wonder how many of these will come back…it’s hard to restart service and restimulate a market once you drop it for a while.
— Adam Nathan (@adampnathan) April 8, 2020
There is near universal agreement across airline management, industry organizations and Wall Street analysts that the industry will be smaller when it recovers from COVID-19. What that means for JetBlue, and every U.S. carrier, remains to be seen. But whether flights resume at airports where service was suspended will be closely watched.
Combined, the 20 airports that JetBlue plans and wants to suspend flights to through June amounted to nearly 13% of its system capacity in 2019, Cirium data shows.
Featured image by Jerry Holt/Star Tribune via Getty Images.
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