JetBlue shares slump after airline drastically cuts 2022 growth plans

JetBlue Airways fell more than 11% Tuesday after the airline slashed its growth plans to avoid a repeat of headaches for travelers and crews during peak season.

The New York-based carrier canceled hundreds of flights earlier this month during bad weather in Florida, disruptions that affected other airlines like Fort Lauderdale-based Spirit Airlines, which JetBlue is attempting to acquire. JetBlue told crews it expects to cut its spring and summer schedule by 8% to 10%, CNBC previously reported.

JetBlue said in a quarterly release that its capacity could be flat to up 5% this year compared with 2019, down from a planned expansion of 15% this year.

Spirit Airlines and Alaska Airlines have also trimmed their schedules.

Airlines have been forced to rethink growth plans as they grapple with seasonal weather delays, tight staffing and higher fuel costs even though travel demand — and fares — have soared in recent months. JetBlue said its average fare rose to $195.99 in the first quarter compared with $149.97 in the same period of 2021.

JetBlue, like other airlines, is also scrambling to staff up. Carriers have shed thousands of workers since 2020, urging them to take buyouts to reduce labor costs, since a $54 billion government payroll support package to weather the coronavirus pandemic prohibited them from firing workers.

“In addition to general staffing, JetBlue is working through a backlog of pilot training and re-certification flights after delays from Omicron,” JetBlue said in a release, referring to the Covid variant. “Volatile pilot attrition is also creating a need for additional recruiting and training capacity.”

Leslie Josephs www.cnbc.com