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JetBlue follows United, announces flight cuts because of coronavirus

March 05, 2020
3 min read
JetBlue follows United, announces flight cuts because of coronavirus
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JetBlue Airways will reduce capacity amid falling travel demand as fears rise of a widespread COVID-19 coronavirus outbreak in the U.S. With the move, JetBlue joins United Airlines and foreign peers in adjusting to the changing environment.

The New York-based carrier will cut system capacity by roughly 5% in the "near term," said JetBlue president Joanna Geraghty in an internal memo to employees on Wednesday viewed by TPG. She attributed the reduction due to a "fall in demand," and said the airline could reduce capacity further if required.

"We must also be flexible in this rapidly changing environment," said Geraghty. "We will make some tough decisions in the days ahead as we monitor the impact of coronavirus."

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In addition, JetBlue is delaying or cancelling any upcoming company meetings and events; reducing hiring of frontline and support center staff; and limiting non-essential spending. The carrier is also considering offering employees voluntary time off.

Earlier on Wednesday, United unveiled a 20% cut to international schedules and a 10% cut to domestic schedules in April in response to falling demand. The Chicago-based carrier said similar cuts are likely in May.

U.S. carriers began suspending flights to China due to fears of the outbreak at the end of January. However, COVID-19 has continued to spread, with clusters emerging in Iran, Italy and South Korea in recent weeks, and in the U.S. in just the past few days.

Related: A guide to traveling during the coronavirus outbreak

As of noon on Wednesday, the Centers for Disease Control (CDC) reported 80 cases of COVID-19 and nine deaths in 13 states across the U.S.

Despite not having any flights to China -- or any of the impacted countries -- JetBlue was the first U.S. carrier to offer domestic travelers a blanket waiver to cancel or change flights due to fears of COVID-19.

The capacity cut comes as JetBlue was scrambling to meet its growth targets for 2020. In January, the airline leased four used Airbus A321s to make up for delays of new A321neo deliveries that it needed to grow capacity by 5.5-7.5% year-over-year this year.

Related: JetBlue picks up used jets as Airbus A321neo delays mount

Those additional A321s may not be needed if the reductions announced Wednesday remain in place for an extended period.

"We have a solid balance sheet (money in the bank) to help us weather this storm," said Geraghty in the memo in what was an added level of assurance to staff versus what United told employees on its cuts. "But in times when revenue falls quickly, having enough cash on hand to meet our financial obligations – from buying fuel to paying business partners to making payroll – becomes a priority."

Most in the industry expect other U.S. airlines to follow JetBlue and United's lead with domestic capacity cuts as fears of COVID-19 are increasingly halting all but essential travel.

Related: Could the coronavirus end the decade-long U.S. airline expansion?

Featured image by Bloomberg via Getty Images

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
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    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

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  • Annual Fee

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  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

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  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

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  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases