JetBlue Hits Pause on Airbus A320 Cabin Upgrades as Neo Deliveries Slide
JetBlue Airways is postponing cabin upgrades to some of its Airbus A320 aircraft as deliveries of new A321neo jets continue to slide.
The New York-based carrier has pushed upgrades to about 10 A320s to 2020 as it works to make up for the loss of more than half of its planned new aircraft deliveries this year, JetBlue CFO Steve Priest said during the company's second-quarter earnings call Tuesday.
JetBlue began the year expecting deliveries of its first 13 A321neos but, due to production delays at the European airframer, will only receive six aircraft in 2019, he said. The issues continue into 2020 with the company forecasting just 14 A321neo arrivals, instead of the scheduled 15 aircraft.
The delivery delays alone would reduce the airline's 2019 capacity growth from an initial target of up 5-7%, year-over-year. However, the company has "managed to tweak the restyling program to manage the capacity challenges in 2019," said Priest.
Related: How to Redeem Points With the JetBlue TrueBlue Program
By upgrading just 50 A320 cabins instead of 60 this year, JetBlue can grow capacity by 4.5-5.5% in 2019, just a half-a-point reduction from its initial forecast.
Where JetBlue will really feel the impact of the delivery delays is in 2020. The company expects a roughly two-point impact to planned capacity growth next year as a result of the late A321neos, says Priest.
In a report today, Cowen analyst Helane Becker estimates that the carrier will grow by roughly 6% in 2020 including the two-point reduction.
While it is difficult to say where JetBlue will not grow in 2019 due to the delivery delays, the carrier is pulling back capacity in Caribbean markets with weak leisure demand, including Punta Cana (PUJ) in the Dominican Republic where several American tourists have died since the beginning of the year.
The carrier has cut seats to Punta Cana by 5.2% in the second half of the year compared to the same period in 2018, Diio by Cirium schedule data shows.
Related: More on The JetBlue TrueBlue Rewards Program
The A321neo delays are just the latest delivery delay for JetBlue. In 2017, the airline converted three neo deliveries scheduled for 2018 to the A321ceo due to production issues, pushing back the introduction of the aircraft to this year.
One thing the delivery delays will not impact is the airline's planned London launch in 2021, JetBlue CEO Robin Hayes said on the same call. The flights will be flown with A321LR aircraft, a variant of the A321neo that can fly up to 4,600 miles.
JetBlue's A320 retrofit program will see its entire fleet of 130 aircraft restyled with a new cabin by the end of 2020. The upgrade raises seat count by 12 to 162 seats, while at the same time adding new seatback monitors and power outlets in every row.
Joanna Geraghty, chief operating officer of JetBlue, said the airline so far has completed upgrades to 28 A320s and remains on track to complete the entire fleet by the end of 2020 – even with the decision to push some 2019 retrofits to next year.
Customer response to the restyled A320 cabins has been positive, she said.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + 4% back in Bilt Cash on everyday purchases |
Pros
- Unlimited up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Housing payments may include transaction fees, depending on the payment method
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 3 months + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.