JetBlue CEO sees ‘too strong’ demand, no ‘dominance’ if it takes over Spirit

JetBlue CEO Robin Hayes sees no upside loss for consumer demand heading into the second half of the year, despite mounting recession fears and disappointing financial results from the airline.

“Demand is still very strong,” Hayes said on Yahoo Finance Live Tuesday. “We continue to see very strong demand [into the fourth quarter.]”

The upside comes from Hayes as JetBlue shares fell 6% in Tuesday’s session after higher labor and fuel costs weighed on second-quarter earnings.

To alleviate cost pressures, Hayes revealed a new goal to save $150 million to $200 million by 2024, driven mostly by the retirement of old, inefficient aircraft.

Here’s how JetBlue performed compared to Wall Street estimates for the second quarter:

While Hayes turns his attention to cost optimization, he’s also now in a position to try to get regulatory approval to buy Spirit Airlines after a painful battle with Frontier Airlines.

JetBlue CEO Robin Hayes displays his airline ticket before a JetBlue flight to London at JFK International Airport in New York City’s Queens borough, New York, US, August 11, 2021. REUTERS/Jenna Moon

Spirit ended its Frontier cash-and-shares deal to acquire the low-cost airline last week after it failed to win enough shareholder support. JetBlue stepped in and said it would look to buy Spirit for a total of $3.8 billion.

Hayes sought to allay regulators’ concerns that JetBlue would have too much control over airfares given its larger size. These concerns are particularly prevalent as JetBlue is expected to control 50% of the lucrative Fort Lauderdale market.

Hayes told Yahoo Finance Live that he is open to disposing of the assets to seal the deal.

“JetBlue and Spirit will not dominate in any market,” Hayes said. “Even in Fort Lauderdale with a 50% share, there are still more than 20 airports where an airline has a larger market share than that.”

Brian Suzy It is a comprehensive editor and Announcer at Yahoo Finance. Follow Suzy on Twitter Tweet embed and on LinkedIn.

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