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JetBlue sticking with seat caps into next year, CEO says

10/28/2020 | 01:56pm EDT
JetBlue's chief executive Robin Hayes speaks during the opening of a JetBlue ticket office in Havana, Cuba

(Reuters) - JetBlue Airways will continue limiting the number of seats it sells on each flight into early next year, Chief Executive Robin Hayes told Reuters on Wednesday, citing the role the policy plays in customer confidence.

The decision sets it apart from low-cost peer Southwest Airlines, which last week said it would stop blocking middle seats on Dec. 1, referencing recent medical research showing that the risk of contracting the coronavirus on airplanes is very low.

"Our view is that over the course of time the seat caps will go, but right now it's a very important issue for customer perception," Hayes said in an interview.

Hayes warned, however, that the policy is "incredibly expensive, especially in an industry that's struggling."

JetBlue posted on Tuesday a $393 million net loss in the third quarter as a slump in travel demand due to the pandemic hit revenues. Like other airlines it is burning millions of dollars of cash every day.

Hayes said he expects JetBlue's business to be "largely recovered" by the end of next year given the low-cost carrier's focus on domestic leisure travel, which is expected to recover before corporate and international travel.

Business travel accounts for less than 20% of JetBlue's flying, he said.

JetBlue, which is currently capping its seating capacity on flights at 70%, will review the policy in the first quarter of 2021, Hayes said.

Among other airlines, Delta Air Lines and Alaska Airlines will continue restricting seating capacity on their planes through at least Jan. 6. Hawaiian Airlines is also blocking seats, while American Airlines and United Airlines are not.

(Reporting by Tracy Rucinski, Editing by Franklin Paul and Cynthia Osterman)

By Tracy Rucinski

ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN AIRLINES GROUP INC. -0.19% 21.43 Delayed Quote.36.14%
HAWAIIAN HOLDINGS, INC. -0.80% 22.41 Delayed Quote.27.63%
JETBLUE AIRWAYS CORPORATION -1.05% 15.96 Delayed Quote.10.94%
UNITED AIRLINES HOLDINGS, INC. -0.82% 48.68 Delayed Quote.13.48%
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Financials (USD)
Sales 2021 6 025 M - -
Net income 2021 -524 M - -
Net Debt 2021 2 366 M - -
P/E ratio 2021 -13,5x
Yield 2021 -
Capitalization 5 076 M 5 076 M -
EV / Sales 2021 1,24x
EV / Sales 2022 0,93x
Nbr of Employees 20 000
Free-Float 66,4%
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Technical analysis trends JETBLUE AIRWAYS CORPORATION
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Mean consensus OUTPERFORM
Number of Analysts 16
Last Close Price 15,96 $
Average target price 20,13 $
Spread / Average Target 26,1%
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Managers and Directors
Robin N. Hayes Chief Executive Officer & Director
Joanna Geraghty President & Chief Operating Officer
Ursula Hurley Chief Financial Officer
Peter Boneparth Chairman
Carol Clements Chief Digital & Technology Officer
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