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Jet Blue planning to expend its first class offerings in twenty twenty six as passengers continue to pay up for premium options. The carrier also cutting capacity to increase fares and focus on East Coast leisure destinations. Joining us now to discuss is the Jet Blue CEO Joanna Garretyanna, good to see you.
Thanks thanks for having me.
The demand for premium is through the roof and a lot of people are trying to provide the capacity for it. What gives you the impression the confidence that that demand's going to stick around?
I mean, Jet Blue has been doing premium for ten years. We introduced our Mint product ten years ago. This is just continuing to round out the suite of products that we have. We have a great coach experience, we have even more space Mintlifelat and now more of a domestic Mint and domestic business class seat that we're going to be introducing in twenty twenty six. Very excited to bring it to customers and leisure markets.
Food is best in class. Say on your behalf, I've done the flight in Mint to California and to London as well. Where does that come from. How expensive is it to provide that kind of product?
Yeah, I mean, we really look to provide a differentiated experience and we lean in on certain areas. So food has been an area that we focus on. Comfort is another area that we spend a lot of time with. We have a great, a great partnership with Tought and Needle, and as we think about our new domestic first class, comfort is going to be the area that we lean in on there as well, with some interesting features of our seat product that provide a bit more comfort to customers.
How difficult is it to thread a needle with the likes of business class Given the fact that Jet Blue traditionally has been an airline that caters to pleasure travel, sure to the idea of traveling with the family to warm places in the winter time. How much does that kind of create a conflict for you?
You know, we don't think it creates a conflict because everybody's a leisure customer and when you think about what you like to do on a vacation, sometimes you want an elevated travel experience as well. So we want to make sure that we have an offering for every type
of leisure customer. One of the things we have done recently is kind of retrenched in the Northeast, really focusing on serving the best leisure markets out of the Northeast Europe, the West Coast down in the Caribbean, and there's a real market for that premium seat.
I guess another way to say this is businesses are willing to pay more on their expense accounts than individuals, especially when they're going on vacation. How difficult is it to charge the rates that make it worthwhile given the fact that as people going on vacation and they typically have bledgets.
We're not focused on charging rates at are akin to what a business customer and a business would charge. We really want to make the premium experience affordable to leisure customers. When we introduced min ten years ago, we did just that. We reduced fares to the West Coast, we introduced a better product, a better service, and that's what we're looking to do here. It's really important for jet Blue to make sure that we have affordable fares and that all
of our products are accessible to the leisure customers. So that's the customer that we're targeting. Somebody willing to pay a bit more, but not at the size that you would for a business.
You've been tasked with turning around the balance sheet of jet Blue, and you've made progress in that front. You just reported earnings that were positive and really pointed toward progress in that How much.
Are you able to.
Raise prices at a time where you see increasing consumer pushback, but at the same time there seems to still be that ongoing demand for travel.
There's very healthy demand in the peak and that's where leisure travel is great. So as we think about, you know, the holidays, we think about the summer time frame. You know, that's where I think Jet Blue does its best because we fly to some of these great destinations. Troughs are definitely more challenging. We've seen some pricing pressure in the troughs.
We've reduced a lot of flying in the trough So it's really about balancing out that year and making sure that you know, when demand is high, you're focused on trying to capture your share of that demand and in the troughs, really reducing the losses.
So do you expect to increase fares this year?
We're hopeful that we can keep fares affordable that reflect the costs of service. It's more expensive to travel now because there are costs. Airport costs have gone up, labor costs have gone up, so there's meaningful inflationary pressure for the airlines as well. Our great food comes at a cost. When you start seeing the grocery costs go up, that means the food in an aircraft is going to go
up too. So we're really trying to balance it and make sure that relative to the other travel out there, that Jet Blue is an affordable fare for customers, inaccessible for a leisure customer.
Well, there's also been other constraints on the air industry when it comes to getting the parts they need, comes to actually getting the planes they need to fly. And then next year a lot of people are talking about, well we might get tariffs and potentially that might impact the supply chain.
How are you preparing for all of that?
Yeah, I mean jeb Blue has a unique situation with Pratt and Whitney. Right now, we have a number of aircraft sitting on the ground that we're paying for, but we're not able to fly because they're due for an engine inspection and there's not enough capacity to do those inspections. So that's definitely a headwind for Jet Blue as you think about tariffs, it's a bit too soon to tell.
I think the good news for Jebl's.
We take a lot of our aircraft from Alabama, but you know, depending on how tariffs get put in. We do have exposure in Europe and in Canada because some of our aircraft come from there.
Of course, the Jet Blue Spirit Airlines potential merger was blocked. Are you potentially thinking about going at it again in the next four years in this space more mergers and acquisitions because there might be a lighter regulatory touch in.
Washington, d C.
We're really focused on delivering our new plan, Jet Forward. We want to see Jet Blue thrive as a successful standalone company. We have a brand that customers love, We've got a great product, a great service. We're focus on flying in the places that people know us. So we're really focused on our standalone plan Jet Forward right now.
Okay, so you might not dip your toes back into that space, but do you think that this is going to be a more welcoming administration when it comes to things like mergers and acquisitions.
It's hard to speculate because we don't know exactly what the complain's going to be, but it's hard to see an administration that's going to be worse than the administration we had around antitrust.
In the meantime, you have announced a number of changes in terms of the jet Forward, including closing down certain operations in a number of cities.
I believe that they are.
Going to cut You're going to cut some fifty routes.
Correct. Is it done?
Are there more to come?
The network is always something that's evolving. So the majority of the changes are done. But you know, we're not going to rest on our laurels. If a particular market is not producing results, then we're going to take a good hard look at it see if we can improve it, and if not, then we're going to point those planes to a place where we can make money.
We've got to become.
Profitable, and part of that has made maybe need to make some tough to say decisions.
I've got to follow up. Have you spoken too the incoming administration.
We have not spoken to an incoming administration.
Planet to go down to marri Lanka anytime soon, like the pilgrimage.
Right now, I'm focused on holiday travel. We have one hundred and fifty thousand customers a day.
Flying is a great place over the holiday, the sun for the holiday.
You can combine the two.
What do we call that?
Work?
Patience, leisure, pleasure? Leisure pleasure? Yeah, leisure, Okay, Leizia. You seeing a lot of pleasure.
We see a lot of leisure. We see a lot of leisure over the holidays too.
Though. We're just really happy to be a part of connecting people with their families.
Over over the whole.
What does it only look like that one hundred.
And fifty thousand people a day over the Christmas holiday, we've got about a thousand flights a day, and you know, it's amazing when you think what airlines do and the magic that we can deliver to customers, reuniting their families and making that great experience. It'll be busy, it'll be tough, and my hope is that everybody can be patient and a little kinder.
If you're asking for patients, does that mean they're going to be delays? How does this snack cut?
Oh, you've teed that one up perfectly delays. I wish this administration would focus more on air traffic control and that it's definitely been a meaningful pressure to Jet Blue to all airlines. When we think about this next administration, that is a real focus area for JetBlue.
What would you like to see change?
What would they do to.
See more hiring. I'd love to see better technology and ultimately improving the amount of delays that come out of the air traffic control system in New York in particular, which is the hardest hit.
We don't like to say the same thing now one what's delays? Did they pram up?
You're talking to the choir I've had? Well, okay, Honestly, going to Florida is the hardest though. I have to be honest, because there's always weather. There are winds that come up. There's a random storm that comes up, and some people get delayed for a long period of time and they sit there and then their complane gets canceled and they take go on vacation with the family.
CEOs can't control the weather, though.
But what is interesting is we have here an airline CEO saying they want the FAA to hire more. The incoming administration is talking about dog deifying the government.
It's true, Well, hopefully do not.
Talking about air traffic controllers. We are grossly.
Understaffed, and at the end of the day, those delays, even with weather, we should be able to have a more resilient aviation air traffic control system with weather.
That is just something that we have to deal with.
Just pause for a second. Are you saying that all those delays it's not because of weather.
It's just some of the delays are definitely because of weather, but they are exacerbated because we are significantly understaffed among air traffic I.
Never trust the excuse. You've got a problem with trust as well. I never trust it. I never trust it.
They know it's actually going on.
And actually, to Joanna's point, there is a problem.
With their traffic.
The stuff's missing.
I think you can actually see how bad the weather is and you're thinking show and it's the weather.
But sometimes you look outside the sky is blue, the sun is shining, and they're.
Like air traffic control blazing.
Yeah, that's a problem. The pilots missing went out the night before.
Who knows, that's jan but that does not happen.
That doesn't have to checks. Just to be very clear, okay, Joanna, it's going to say thank you, appreciate time. Thank you