Hello and welcome to the Airline Weekly Lounge. I'm Gordon Smith. While Jay and I are away for the holidays, we're bringing you two special episodes with extended interviews from our recent Skift Aviation Forum held in Fort Worth, Texas. In this first program, I'm in conversation with JetBlue CEO Joanna Geraghty. In this lively onstage interview, Geraghty explains why she believes the deck is stacked against smaller carriers in the US airline industry and why she thinks 2026 will be a better year. Enjoy.
Joanna, welcome to the Skift Aviation Forum. Nice to
It wasn't guaranteed that you were going to be here. You were on a plane barely two hours ago.
Two hours ago. One of the competitors. Benefit of being small is you fly everybody else and get to do a little market research yourself.
Feel really good about the JetBlue product after this morning.
DFW did its job though. Got you through the airport nice and smooth.
That all worked very well.
We'll talk strategy in just a moment, but let's begin with the big story from the past week. On Friday, we had that global safety alert affecting the A320 family. EASA stemmed that back to a JetBlue A320 on October 30th.
I imagine you and the team have had better Friday nights.
Yeah. I mean, this month has been tough, I think, for the industry. Particularly tough for JetBlue. My team, I just want to make a shout out for them. What they have managed between a hurricane in Jamaica, the government shutdown, and then the Airbus with this directive, it's definitely been a dynamic and challenging environment to operate in. And I think they did as well as anybody could expect to navigate that. So the Airbus issue, obviously safety first. When a regulator, let alone your manufacturer, tells you that you need to roll back a piece of software because they see an anomaly, obviously we all take that extremely seriously. JetBlue happened to be a bit more impacted than others because we had rolled out this version of the software, which was actually part of Airbus's safety standard program ironically, across more of our fleet. We actually were very proactive in rolling it out, and we also rolled it out across a portion of the fleet that had ELACS, these flight boxes that could not be reprogrammed onboard the aircraft. And so that's why we had a bit longer of a recovery because we had to actually replace the boxes. And when you have a worldwide airworthiness directive that goes out like that, suddenly everybody wants the boxes at once. And so it took us a little longer because we had more aircraft impacted and had a version of the box that needed to be done off-wing. But again, happy we made it through it and tried to minimize customer disruptions on a really important weekend as much as we could.
For sure. Was there any frustration that you were the good student, you did your homework, you got it in early, and you were almost punished for it?
I mean, at the end of the day, we try to make the right decisions around what modules to implement, and I think we're never going to regret the decision. It had a set of flight envelope protections. That was what the version that we had on our aircraft had to be the version that we had to remove. So it removed some flight envelope protections when we rolled it back. But it's absolutely the right decision. I'm sure Airbus will sort it out and figure out what the right path is moving forward. But yeah, it's definitely frustrating. But we're JetBlue. We've had a lot of knocks and punches over the past couple of years, so we'll just add this to the list and keep powering through.
It's fascinating that here we are the week after Thanksgiving and Thanksgiving didn't even mention it wasn't even mentioned in your first opening statement. It was the hurricane shutdown, it was the A320.
Speaking in DC last month, you called for a quote level playing field. That term means different things to different people. I'm sure different people in this room have got a different idea of what level playing field means. What does it mean to you and team JetBlue?
Yeah. I mean, I think what it means to us is the opportunity to actually effectively compete and succeed in competing. And right now you've got four airlines that occupy 80% of the domestic markets, and we're 5%. And we've had a number of things that we've tried to do to gain scale that have either been blocked by the government or haven't worked our way. And I have some great examples of head scratchers, frankly, in that category. And it makes it more challenging for a smaller carrier to effectively compete. If you think about big companies, they have the advantage of purchasing power. If you're buying a big aircraft order book, obviously the cost of those planes is going to be less. If you're buying more, we're smaller, so we buy less. Airport rents and landing fees, if you have a huge operation, you can run those gates more efficiently than an airline that has maybe a smaller number of flights and spread the costs of operating at that airport across a wider base. Loyalty programs. We all have our favorite loyalty programs, and when you can't serve customers in all the destinations that they want to go, they're forced to go outside of your ecosystem and find another loyalty program to augment what you offer or another credit card. So with lack of scale on a network, it makes it particularly challenging there. Access. That's another huge area. We're constantly knocking at the door of airport authorities trying to find a way into markets that we think JetBlue can be successful in, markets where we want to bring our product, and a lot of times the doors get shut in our face.
How do you compete against scale without having that scale? It's a little bit of a catch-22.
Yeah. I mean, it is. I think we tried to do the Spirit transaction. That didn't work. We tried to do a very deep partnership with American Airlines that involved revenue sharing and schedule coordination. That was blocked. So we're now doing a partnership with United Airlines called Blue Sky. So that's one opportunity to try to get scale with a partner. And then we're going to continue to knock at the door of airport authorities and others to try to force our way in. We're also very active on the Hill trying to point out the challenges that small carriers have in this environment, and the government needs to pay attention and start looking for opportunities to kind of tilt things our way in areas that they can.
You gave a couple of choice numbers there, 5% and so on. Here's some other numbers. You're the largest carrier, Boston Logan. You're second only to Delta at JFK. These aren't the characteristics of an underdog.
Correct. Yeah, they're not. But when you have a global carrier that you're competing with at JFK or in Boston, we still can't offer all the destinations that a Delta offers in Boston for example. And when I look at what we did in Boston, we really put Boston on the map in terms of a hub for an airline. So our ask of airport authorities and others is to recognize that sometimes you do have to put your finger on the scale for the small guy because if you don't, then they can't succeed. And it could lead to an environment where you're left with only a legacy carrier or a carrier that maybe doesn't offer as good a product or service as JetBlue offers. So I think stopping and taking a minute to look at the long view, which is we have to have a healthy climate where all carriers can compete, not just the big guys.
Let's reflect briefly on the government shutdown. I know there was some shared frustration around legacy operators maybe being able to be a little more tactical in terms of what they had to cut with their regional fleets, in a way that maybe JetBlue and others couldn't. Another shutdown's possibly going to be with us in as little as a month, a month and a half.
What is your message to the lawmakers and to the Hill and to everyone else that's got a say in avoiding a potential January 30th?
I mean, at the end of the day, we obviously supported the FAA and their decision to reduce capacity because we were concerned about a safety impact across the national airspace. I think first and foremost, we've got to fix the national airspace. It can't be political fodder for situations where the Democrats and Republicans can't find a path forward. Part of that's got to be air traffic control modernization. We've been at the forefront of this for literally more than a decade, pounding the pavement. Dave Barger, my CEO two CEOs ago, was literally the person who chaired the first NextGen advisory committee. For the most part, nothing's happened. I think this administration is doing a much better job. But I think it first starts with that. Then as you think about the potential for another shutdown, we were a very big advocate to really apply the rules on an operating carrier basis so that the legacy carriers can't just go out and cancel the marketing carriers or those smaller carriers that fly under an American or Delta or a United code because it's a small aircraft. When we are forced with canceling a JetBlue flight, a larger number of people are impacted. They came up with a formula that they thought was fair. I think I would have preferred to see operating carrier be the required cut standard, but it is what it is. At the end of the day, I think I'm happy we got out of it and fingers crossed we find a path forward so we're not there again.
You're listening to a special episode of the Airline Weekly Lounge. Don't go anywhere. We'll continue our discussion with Joanna Geraghty right after the break.
Hello and welcome back to the Airline Weekly Lounge. Let's continue now with part two of our onstage interview with JetBlue CEO Joanna Geraghty recorded on December 3rd at the Skift Aviation Forum in Fort Worth, Texas.
It's not just in the US where you're being challenged. We had your colleague Marty George join us in New York at the Skift Transatlantic Summit in October, and he was expressing some frustration around Lisbon, around Heathrow.
It's, I mean, it's uh, so Lisbon we continue to knock at the door there. We were given a slot in Lisbon that was completely unworkable, would not have driven what customers wanted in terms of the right arrival time, but also would not have performed from a revenue basis for JetBlue. And the latest turn as the world turns is we had applied for a Boston Heathrow remedy slot that we had applied for several years ago, which was actually a remedy slot as part of the American/US Airways BA joint venture years ago. United got it the first go-round, was unsuccessful in operating that Boston Heathrow slot. So we then applied when they turned it back in, and we've lost again to what I believe is another legacy carrier. These decisions in isolation seem perhaps logical. The challenge is when you pull up and look at this from 30,000 feet, they add up, and the more it happens, the more challenging it becomes for carriers like JetBlue or others to really provide that service that we'd like to.
What would you say to the CMA in the UK, the competition market authority? You say, 'Well, hang on. That legacy operator is going to be flying a widebody in there and you're putting a tiddly little A321.'
Completely understand it. And I'd say take the long view. Because we've come into these markets and driven competitive change. We have reduced fares even with a narrow body. We've improved product offerings because others have to match the product offering that we put out there. You can look at Mint as a great example of that. And so if you're only focused on the number of customers you're bringing over the pond, which appears to be the large majority of what they looked at, I understand. But you've got to take a long view here, because if you don't, then you're going to end up with just big guys.
Is there a risk that if new entrants like yourself get treated badly time and time again with the crummy slots and unworkable conditions...
...a self-fulfilling prophecy? It just doesn't work in the long run.
So, I mean, another example is DCA. There was an opportunity to fly an out-of-perimeter slot. A couple of out-of-perimeter slots became available. We fly one out-of-perimeter slot today, San Juan, it does very well for us. We applied for an out-of-perimeter slot and guess what? We didn't get it. Guess who did? Legacy carriers. Because it was politically driven because it involved people flying home from DC to their home states. So, you know, it is what it is. We keep at it.
One place you are heading into is Milan.
Yes. Milan and Barcelona.
Can you get from Boston to Milan on an A321 LR in winter with the bad winds?
Well, we're doing summer seasonal for both Milan and Barcelona.
