JetBlue May Defer Jet Deliveries
JetBlue Airways would consider deferring deliveries of some aircraft or issuing new equity as it seeks to keep its debt under control, its chief executive said on Wednesday.
The low-cost airline lost money in the fourth quarter, breaking a profit streak extending to its 2002 IPO. It has been grappling with higher fuel prices than it planned for.
"We're going to look at (slowing deliveries) very seriously as we look at our routes and where the capability is and where the substantial profitability (is)," David Neeleman, the airline's founder said.
He said the airline, which is forecasting a full-year loss, would also consider selling new shares as it seeks to keep its debt at no more than 75 percent of its total capital.
"It's important to the ratings agencies that we do that," he said.
JetBlue raised about USD$155 million through a stock sale in November.
If the New York-based airline did delay deliveries of aircraft it has on order from Airbus or Embraer, it would be a significant retreat from the aggressive growth strategy the airline has pursued so far.
Neeleman said that given strong demand from airlines elsewhere for both of JetBlue's mainstay planes, the Airbus A320 and the smaller Embraer E-190, it would be easy to defer the planned deliveries.
"One of the advantages we have is that we have airplanes that are very desirable on the world market," he said.
The airline is slated to take delivery of 17 A320s this year and 17 next, and 18 E-190s in each of 2006 and 2007, boosting its fleet to 162 planes from 92 at the end of 2005.
Neeleman also reiterated that JetBlue is looking for ways to raise additional revenue after being caught unawares by high oil prices.
"We kind of ran the company in a sense assuming that oil was going to be USD$50 a barrel," he said.
JetBlue's revenue per available seat mile (RASM) rose 7.5 percent in the fourth quarter, lagging the gains at some other carriers.
"I think we can do better than that as we go forward," Neeleman said, adding that the airline was close to hiring a new vice president of revenue management.