JetBlue CEO shares airline concerns and hopes
This is an open sharing
by Robin Hayes, CEO, of what
JetBlue is doing in the wake
of Covid -19 and economic crisis.
This can be seen as typical
of what most other airlines
are doing in trying to deal
with the present and adjust
for the future of commercial
air travel, which is unplannable
at this time.
Dear Crewmembers
–Message from
Robin Hayes
As the corona virus crisis
deepens, so too does its
impact on our business. If
anyone tells you that they’ve
seen anything like this before
– don’t believe them. We’ve
shared with you in the past
weeks the unprecedented decline
in demand for travel,
and the situation continues to
deteriorate. The numbers are
staggering:
Just 7,000 Customers are
likely to fly us each day in
April and possibly May, compared
to the 120,000 we would
typically expect.
Last year on a typical day
in April, we took in about $22
million from bookings and
ancillary fees. This is now
just $1 million per day (and
another $2 million per day is
being issued in cash refunds,
pushing us into negative territory).
Additionally, we are
still issuing $11 million per
day of travel bank credits for
canceled bookings.
We are spending far more
on running the airline than
we are making in revenue
and, as a result, we are burning
through over $10 million
of our savings each day. Despite
our position of financial
strength, this is simply
not sustainable. We are leaving
no stone unturned, cutting
pay for officers (VPs
and above), introducing voluntary
time off programs,
reducing capacity, re-negotiating
Business Partners
agreements, and stopping or
pausing 75% of our major infrastructure,
technology and
real estate projects.
Taking action
by reducing our
network, parking
our fleet
Preserving cash is our
top priority and we’ve had
to make decisions we never
dreamed we’d make. We must
continue to make sacrifices
where needed so that we can
emerge from this unprecedented
challenge.
32 AIRPORT VOICE, APRIL 2020
JetBlue aircraft hard stand during slowdown at JFK Airport. Photo by Jeff Yapalater
70% April schedule reduction:
We’ve reduced our April
schedule by at least 70%.
Parking over 100 aircraft:
Just a few weeks ago,
we couldn’t get new aircraft
fast enough to hit our growth
plans. Now, we are taking
steps to sit down the aircraft
we have. This month, we
will park over 100 in the Arizona
desert and at BlueCities
around the country.
Payroll support for
Crewmembers
Last Friday I shared some
very good news about the
CARES Act, which sets aside
$25 billion in payroll support
for airline employees through
Sept. 30, 2020. In the week
since the law was signed,
our nation’s leaders have
moved with incredible speed
to start the process of getting
that money into the hands
of Crewmembers. I want
to again thank President
Trump, his administration,
and Congress – especially our
very own Senator Schumer –
for their bipartisan support.
Today we submitted our
application for payroll support
funds to the Treasury
department and we now enter
negotiations with the U.S.
Government. I hope things
can move quickly, and we are
available this weekend so we
can conclude an agreement
next week, as time is of the essence.
For reasons I am sure
you understand we won’t be
commenting while we are in
these discussions. We may
not get enough to cover pay
and benefits at the level you
see when we are flying at full
capacity. Also, as a growth
carrier, we have a disadvantage
as the funds are based
on last year’s payroll costs.
With fewer hours for everyone
to work and far fewer
flights, total pay is likely to
go down for both salary and
hourly Crewmembers. The
good news is this law keeps
paychecks coming and it buys
us time. Securing jobs, even
at reduced total pay, is my priority
right now.
“I take great pride in
knowing that we can help
others even when we need a
little help ourselves.”
Every dollar of the payroll
assistance funds will
be passed to Crewmembers,
with the exception of Jet-
Blue Officers who will not
be funded by the Government
and the leadership team
have all taken significant pay
cuts. We are in this together.
The government is providing
these funds as recognition to
us to make sure we are in position
to serve the flying public,
support the country, and
kickstart the economy again
when the crisis is over.
Even if we get the payroll
support, we still need to raise
additional money to pay our
other operating expenses.
We will be talking to the government
and other lenders in
the coming weeks. We have
thoughtfully managed our finances
over the past 10 years,
and thankfully we now own
many aircraft and other assets
we can borrow money
against.
One requirement of accepting
payroll support is that we
continue to provide a reasonable
level of service across
our domestic network. With
dramatically fewer Customers,
we have to take a hard
look at our schedule to meet
those requirements while
also pulling down further flying.
We expect more clarity
on this from the Department
of Transportation soon.
Inspiring Humanity
and looking ahead
I take great pride in knowing
that we can help others
even when we need a little
help ourselves. Customers
choosing to fly during this
difficult time are, for the
most part, doing so because
they need to, not because they
want to. With our mission to
Inspire Humanity in mind,
we are transporting medical
professionals and supplies
to the places where they are
needed, and helping get students
home.
While every day right now
feels endless, this will not last
forever. We are already thinking
about what the world will
look like when we come out of
this. Just like after 9/11, some
things will go back to normal
and others will change for
good and we need to prepare
for that. With our incredible
team, disruptive brand, low
fares, and low-cost structure,
I think JetBlue can do some
great things in this new reality.
I’d like to end this update
on a personal note. So many
of you have reached out to
me and I feel terrible I have
not been able to personally
get back to everyone like I
normally do. I want you to
know that I’ve read your comments
and suggestions and
have shared the themes with
the right leaders. I know it
is a scary time. The multiple
stresses of work, finances,
and personal health can take
a toll. Take care of each other,
and don’t hesitate to reach out
to your leader if you need support.
Thanks for all you’re doing.
We will get through this.
Security Manager Pat Burke Supervisor Tim Harmon, Security Coordinators Josphine Mammola, John Cuccinello.
There are about 50 aircraft a night that RON.