JetBlue Is Now Burning Up To $8 Million Each Day

JetBlue has announced today an operational and financial update of its fourth-quarter business. The New York City-based airline expects its daily cash burn in the fourth quarter to rise to around $8 million per day. JetBlue made the prediction citing recent booking trends and a delay in cash tax refunds.

JetBlue Airbus A320
JetBlue is the seventh-largest American airline. Photo: JetBlue

In a Security and Exchange Commission (SEC) filing, the US carrier predicted a daily cash burn of between $4 million and $6 million and not the $6 million to $8 million mentioned in today’s report. Regarding fourth-quarter capacity, JetBlue says it expects to see a decrease of somewhere between 45% and 50% year-over-year, slightly up on the number it predicted previously. The airline said that it is on top of the situation and will continue to manage capacity on a rolling basis to keep up with demand.

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JetBlue expects a non-linear recovery

Despite a worrying trend of decreased bookings, JetBlue remains confident that the recovery will be non-linear through the fourth-quarter and beyond. The airline also said that it has no control over COVID-19 disruptions or any other matters related to the pandemic.

JetBlue Airbus A320
JetBlue is based in New York and operates many of its flights out of JFK. Photo: JetBlue

JetBlue now expects year-over-year revenue to decrease by around 70% compared to its previous planning assumption that year-over-year revenue would be down by approximately 65%. Based on the information it has currently available, JetBlue’s 2020 fourth quarter assumption for operating expenses will see a year-over-year decrease of around 30%. JetBlue says that the planning assumption for operational expenses will rise and fall based on the quarters capacity numbers.

COVID-19 has opened new markets

In slightly more upbeat news, while giving a keynote interview as part of the Routes Reconnected conference program, JetBlue CEO Robin Hayes said that COVID-19 has allowed the airline to experiment with its network strategy. During the current global pandemic, JetBlue has bolstered its position at Newark Liberty International Airport (EWR) and Los Angeles International Airport (LAX). Along with this, JetBlue has also opened 62 new routes.

JetBlue tailfins
COVID-19 has allowed JetBlue to experiment. Photo: JetBlue

During the interview, Hayes said,

“When you’ve got every airplane flying, you’re constantly looking at the routes,” Hayes said. “Of course, there’s opportunities to add new routes—as you’re either taking on new aircraft or moving routes off your network that aren’t working—but it’s a relatively small amount of capacity.

“At JetBlue, we grow about 5-7% a year, and most of that is usually adding capacity to current markets. Suddenly, we have airplanes sitting on the ground, and we have business travel demand that’s likely to face a press for a while, so we have a tremendous amount of assets to try new things.”

What do you think about JetBlue’s prediction of possibly burning through $8 million a day? Please let us know what you think in the comments.