JetBlue Airways has announced it will defer deliveries of 18 new Airbus A320-family aircraft from the 2016-2018 period to 2022-2023.
The carrier is deferring delivery of five aircraft originally due for delivery in 2016, five in 2017 and eight in 2018. Most or all were due to be current-generation Airbus A320 aircraft.
However, JetBlue’s deferral decision ensures that instead of taking delivery of 18 current-generation A320-family jets, JetBlue Airways will eventually take delivery of all the aircraft as Airbus A320neo-family aircraft.
The delivery deferrals of 16 aircraft until 2022 and two until 2023 mean they will be delivered to JetBlue Airways well after 2020, when A320-family production is due to have shifted completely to deliveries of Airbus A320neo-family jets.
Robin Hayes, JetBlue Airways’ president, said in a statement on November 19 that the deferral would form part of a plan that would allow the carrier to maintain unit cost growth (excluding fuel and profit-sharing) below 2 per cent through 2017.
The plan would also allow longer-term gains “from a number of avenues”, including JetBlue gradually up-gauging the average seat capacity of the aircraft in its fleet with the larger A321s it has on order.
JetBlue’s 2016-2018 aircraft deferrals also form part of a larger strategic, long-term plan by the airline to reduce capital expenditures by more than $900 million through 2017 and also to generate more than $400 million of new annual operating income from that year onwards as a result of existing and new revenue-enhancement initiatives.
A sizable part of the revenue-enhancement program will come through JetBlue Airways adding 15 seats to each of its Airbus A320 jets during what it describes as “a major cabin refresh” for each aircraft, a program which will begin in mid-2016.
The cabin refresh will upgrade each A320 cabin to a standard similar to that found in JetBlue’s new Airbus A321 jets. It will include each seat being provided with a larger seatback in-flight entertainment screen, more entertainment options offered and power ports made accessible to all passengers.
However, the refresh will also see each A320 being reconfigured to seat 165 passengers instead of the 150 passengers each of its A320s holds today.
This seat increase will reduce JetBlue’s average fleet-wide seat pitch (this includes the aircraft it has configured with extra seat pitch for its Mint premium transcontinental service) from 34.7 inches today to 33.1 inches by 2019.
However, despite the prospective 1.6-inch average seat-pitch reduction, JetBlue claims that in 2019 it will still boast the highest average fleet-wide seat pitch of any major U.S. carrier.
JetBlue’s strategic plan also includes simplifying its fare structure to three branded fare categories. These are ‘Better’, the lowest-fare category, for passengers who don’t wish to check a bag. This fare category would not allow the passenger to watch live in-flight television for free and would award six TrueBlue points per dollar spent.
The next fare category is ‘Even Better’. This would allow each passenger to check one bag, would allow free live, in-flight TV-watching, would provide unspecified “other benefits” and would award six TrueBlue points per dollar spent plus an unspecified additional number of points per dollar spent.
Not including its Mint premium service, JetBlue’s highest base fare category in the future will be ‘Best’.
Passengers paying for this fare will be able to check two bags, will watch live in-flight TV for free, will be provided unspecified “other benefits” and will be awarded six TrueBlue points plus an unspecified additional number of points (a higher number than awarded under the ‘Even Better’ category) per dollar spent.
‘Best’ fares will also allow flexibility for changing flights and other changes to the booking.
Separately, irrespective of which fare bundle a passenger buys, JetBlue will continue to offer ‘Even More Space’ higher-pitch seats, for a variable fee depending on flight distance.
JetBlue will begin its new revenue-enhancement moves, including introducing its new fare families, in 2015.
By 2017, when the program is fully implemented, the airline expects to obtain more than $200 million a year in additional operating income as a result of its three new fare families; approximately $100 million a year from its A320 cabin refresh and seat increase; and about $150 million a year from “new and ongoing initiatives”.
These initiatives include “expected incremental margin” from ‘Even More Space’ and other ‘Even More’ service products; co-branding; its Mint premium service; JetBlue’s Fly-Fi in-flight Wi-Fi service (which the carrier claims 43 per cent of its passengers are using); JetBlue Getaway vacation packages; and partnerships with other companies and airlines.
Most of JetBlue Airways’s planned 2015 capacity expansion will come from expansion of its Mint transcontinental services and expansion of its hub at Fort Lauderdale Hollywood International Airport.
In 2015, transcontinental services will represent 31 per cent of its total capacity and will see 15 to 17 per cent growth in available seat mile (ASM) capacity, according to JetBlue.
During next year, JetBlue’s network to and from Florida will represent 29 per cent of its total capacity and will see 4 to 6 per cent ASM growth. Its routes to and from Latin America will represent 28 per cent of its total capacity and will also see 4 to 6 per cent ASM growth, according to the airline.