JetBlue has announced it will reduce capacity by 40 percent for April and May amid a "stunning shift" in revenue caused by a decline in new bookings, lower fares and a cancellation rate more than 10 times higher than normal stemming from the coronavirus (COVID-19) outbreak.
"As it relates to our business, we are not going to sugarcoat it. Demand continues to worsen, and the writing is on the wall that travel will not bounce back quickly," JetBlue CEO Robin Hayes and President and COO Joanna Geraghty said in a message to the carrier's 23,000 crew members on Wednesday.
"Last year on a typical day in March we took in about $22 million from bookings and ancillary fees. Throughout this March, our sales have fallen sharply and in the last several days we have taken in an average of less than $4 million per day while also issuing over $20 million per day of credits to customers for canceled bookings," the executives added.
Like its competitors, the airline has implemented several cost-cutting measures to navigate the uncharted territory, including grounding some aircraft, pay cuts for VPs and above and increasing cash reserves.
"We also expect substantial cuts in June and July, and given the unpredictability of this event, we will ground some of our aircraft," said Hayes and Geraghty. "We know this is not an easy move-it will impact hours for many frontline crew members, but it is also essential that we reduce capacity in the face of dramatically falling demand."
JetBlue is also calling for government intervention as travel bans and restrictions have compounded the industry's struggles.
"When this pandemic passes-and it will-air travel will play a major role in getting life back to normal and supporting economic recovery. We are going to need significant government help to do that," the message stated.
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