JetBlue may be able to avoid laying off pilots, flight attendants

U.S. airlines accepting CARES Act grants are currently forbidden from implementing involuntary furloughs to reduce headcount, but that requirement currently only runs through Sept. 30. This October is not going to be pretty — that's when we're expecting airlines to begin laying off and furloughing employees, given that demand has yet to recover, and likely won't return to pre-coronavirus levels for years to come.

In the meantime, several airlines have been actively attempting to persuade employees to voluntarily step away from their jobs, offering perks like cash compensation, health benefits and even years of free travel, with the hopes that more pilots, flight attendants, airport workers and other employees will sign up to leave on their own.

As Wandering Aramean reports, there's some good news when it comes to JetBlue's voluntary separation program: The airline's initiative may end up largely being a success. JetBlue may be able to avoid laying off many employees, thanks to "healthy" buy-out participation among flight attendants, for example. Airport workers, maintenance technicians and some other teams seem to be in a good place as well, though the airline may need to reduce its headcount among support center and salaried employees.

According to a Reuters report, meanwhile, JetBlue has come to an agreement with its pilots union, committing to avoid any involuntary pilot furloughs before May 2021. Such an arrangement may not materialize at larger U.S. airlines, including American, Delta and United — some of which have already warned pilots that furloughs may be on the way.

JetBlue could end up paying many more pilots than it actually needs to operate scheduled flights, but it may be worth the expense, given that captains and first officers require significant training before they can fly passengers, and the cost of hiring new pilots and bringing them up to speed could be higher than what the airline will spend to retain its existing workforce.

Also, in some ways, JetBlue is better positioned to weather this storm than its far larger counterparts — American, Delta and United — which depend on business travel and international passengers to make ends meet. With Europe and much of Asia off-limits to Americans, and the U.S. border closed to international visitors, carriers with a significant international footprint may need to make more drastic cuts. JetBlue does fly beyond the U.S., but most of its international service is to the Caribbean, which is beginning to reopen to American tourists.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

Also, assuming JetBlue extends its generous no-neighbor guarantee, the airline will need more pilots and flight attendants to fly fewer passengers than say, American Airlines and United, which aren't capping capacity onboard their flights. Let's hope this all spells good news for the JetBlue crew.