JetBlue Unveils Cost-Cutting Plan Worth Up to $300 Million by 2020

JetBlue Airways Corp. is expected to announce cost-cutting initiatives that will deliver $250 million to $300 million in structural savings by 2020 in a presentation to investors Tuesday.

New York-based JetBlue also said it plans to double its stock-repurchase authorization to $500 million through 2019. Earlier, it had approved $250 million of buybacks through 2018, and the company bought $120 million of stock in an accelerated share buyback in the current quarter.

Two years ago, JetBlue outlined a plan aimed at boosting its revenue and on Tuesday reaffirmed it is on track to realize that goal of $415 million in improvements. Among the components: more revenue from an array of fare options that give passengers more choice in ticket prices and amenities; a new branded credit card agreement that is driving increased customer spending; and adding seats to its aircraft.

On top of that, JetBlue's premium Mint service, only available on certain long-haul flights, is boosting operating margins on routes where the outfitted planes operate, the company said. JetBlue is rolling out new Mint planes and routes, with the eventual goal of offering 70 or more daily flights to 13 destinations on the two U.S. coasts and in the Caribbean.

Currently the nation's fifth-largest carrier by traffic, JetBlue is shifting some of its attention to cost savings, mainly in the areas of maintenance, airports and crew scheduling. The steps will include introducing software tools to allow its technical and spare-parts operations to run more efficiently, updating its crew resources capabilities to optimize crew scheduling, and adding more sophistication to its airport kiosks so passengers can handle rote transactions on their own.

Jim Leddy, JetBlue's interim chief financial officer, said the cost-saving steps will be phased in over three years and should yield permanent structuring savings by 2020.

In the investor presentation, JetBlue said it expects to increase its capacity in 2017 by 6.5% to 8.5%, with the most growth on transcontinental routes, and on the East and West coasts. It expects its unit cost excluding fuel to rise by 1% to 3% next year.

Write to Susan Carey at [e-mail]

(END) Dow Jones Newswires

December 13, 2016 12:55 ET (17:55 GMT)

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