JetBlue is kind of in a pickle at the moment. The carrier’s partnership with American Airlines was blocked, and then its takeover of Spirit Airlines was blocked. JetBlue’s leadership now has the task of running the company as an independent airline, and that seems to be starting with trying to reduce costs.
In this post:
JetBlue offers voluntary separation packages to employees
As reported by @xJonNYC, JetBlue is offering voluntary opt out packages to all of its non-union employees (so this excludes pilots and flight attendants). Frontline employees are being offered two weeks of pay per year of service, while management employees are being offered three weeks of pay per year of service. In both cases, pay is capped at 26 weeks.
On top of that, those who accept one of these packages can receive healthcare through April 30, 2024, plus travel privileges. Those who have been at the company for a long time can even potentially get lifetime travel privileges (your age plus years of service must add up to at least 55, and you must have been at the company at least 10 years).
Employees have until February 8, 2024, to express interest in this program, and then will work through the end of February 2024.
Here’s how the airline described this decision in a statement:
“We are aiming to reduce our fixed costs through voluntary measures by giving people who work in a number of corporate functions, in our airports, and in our customer support center the opportunity to leave JetBlue with a departing pay and benefits package.”
This isn’t a huge deal, but is interesting
JetBlue is simply offering employees a mutually beneficial opportunity, as there are no furloughs here. Rather, employees have the option of taking one of these packages if they’d like. This isn’t exactly the most generous opt out package we’ve seen from a company, but then again, if someone was thinking of leaving the company anyway, this is a good incentive to do so.
Currently it seems like the bigger US carriers are best positioned, and most of the smaller and regional players in the US are in a much worse situation (and JetBlue is in an especially tough spot, having just spent hundreds of millions of dollars on a failed takeover attempt).
Stepping back for a moment, it is interesting how the industry has been evolving since demand has recovered after the pandemic. Airlines went on a huge hiring spree for a couple of years, and seemed like they couldn’t get enough employees.
Now even the best positioned airlines are saying that they’re planning on keeping their employee count roughly even over the coming years. I’d even view that as a best case scenario situation, as it assumes there’s no major headwind for the industry.
The US economy is in a good place, given what’s going on globally. But if anything shifts for the worse, you can bet that even the legacy carriers will be in big trouble.
Bottom line
JetBlue is offering its non-inflight teams opt out packages, in an effort to cut fixed costs. This is happening as JetBlue comes to terms with the reality of needing to focus on its own operation, rather than being distracted with partnerships and acquisitions. JetBlue management has quite a bit of work to do, and I don’t envy the job of JetBlue’s new CEO.
What do you make of JetBlue’s voluntary separation packages?
I am just sad for the hard workers. Mabey UAL might buy ? It works JFK and bos
Interesting idea. But UA already has NE presence in both EWR and IAD. So getting JFK and BOS isn't that attractive. My feeling as an IAD based 1K is that UA lacks a real presence in SE to compete against AA in CLT and DL in ATL. A B6 purchase does nothing to help that.
My wife also took VSA (Voluntary Separation Agreement) from AS when it was first offered on my expert advice that future involuntary layoffs won't be so good with benefits.
My advice to JB folks.... if you have "vested" or qualify for lifetime retiree benefits, take the package and get out. It may be emotionally painful but you won't regret it.
My experience is that voluntary buyouts often are follows by layoffs and the terms of the layoffs are usually not nearly as good. If I worked for Jet Blue and had a lot of seniority I would strongly consider taking the offer then finding another job. Frankly don’t see things going well at Jet Blue the next couple of years and this is likely the best deal they will get
Is it possible that air travel had hit a plateau or near peak?
The north east is at saturation via air traffic control which is a bottle neck.
So, it needs to get its house in order (reliability, frequency, cost control).
Other opportunities await (organic growth or do I feel a Breeze in the air).
The midwest is the weakest link.
Great to see that the same bargain basement consultants who are working on middle east strategy also appear to be running domestic air policy. Love that for us. Terrific.
With a failed Merger attempt with SPIRIT (horrible idea in concept) JetBlue is in a precarious position.....not big enough to compete with the Big 3 and Southwest on a National Front and limited options going forward. The TransAtlantic venture needs to be dropped.....it will never stand a chance against the Big 3 and their Joint Venture partners over time, not flying A321 narrowbody aircraft. JetBlue is excluded from any Global Alliance and this hurts their...
With a failed Merger attempt with SPIRIT (horrible idea in concept) JetBlue is in a precarious position.....not big enough to compete with the Big 3 and Southwest on a National Front and limited options going forward. The TransAtlantic venture needs to be dropped.....it will never stand a chance against the Big 3 and their Joint Venture partners over time, not flying A321 narrowbody aircraft. JetBlue is excluded from any Global Alliance and this hurts their marketability on the global stage more than they estimate. JetBlue lacks Airport Lounges which Is a problem in the Big Markets that they want to serve. Outside of some type of arrangement where they partner with AA under allowable terms leveraging the JFK Operation , maybe consider acquiring Hawaiian Airlines for the mass they need or looking at some other partner, they just do not have many opportunities available. I for one do not see Alaska even interested in any type of a Merger/Acquistion because JetBlue wants to be in control and Alaska is never going to allow that and the price to acquire Alaska is way out of bounds for JetBlue.
Agree. Plus AS is a real, profitable airline with plan. So why would they?
The expansion into Europe is fine, and tbh there's a lot of good leisure and business destinations that'd be a good fit for JetBlue and their airplanes like Brussels, Berlin, Bordeaux, Barcelona, Lisbon, Nice, Rome, etc.
Even though their route networks are pretty compatible, AS would get stuck with JetBlue's horrible operational performance. I've literally NEVER had a JetBlue flight that didn't have some sort of operational issue. From leaving one of my two bags behind on a non-stop SFO-BOS to a six hour delay between DCA and BOS, there's always a problem and it's never trivial.
AS seems to be focused on west coast and transcons to serve their...
Even though their route networks are pretty compatible, AS would get stuck with JetBlue's horrible operational performance. I've literally NEVER had a JetBlue flight that didn't have some sort of operational issue. From leaving one of my two bags behind on a non-stop SFO-BOS to a six hour delay between DCA and BOS, there's always a problem and it's never trivial.
AS seems to be focused on west coast and transcons to serve their west coast based flyers. It's a solid strategy and one I appreciated when I was PDX and then SFO/SJC based. JetBlue is unlikely to be in the cards for them.
Jetblue just needs to better position themselves as a value carrier. I think a lot of people are confused because they seem to present themselves as a LCC, but their fares aren’t any cheaper than legacies. And Europe can totally work if they improve their reliability, especially at their hubs. Also, are you aware that Alaska is currently about to buy Hawaiian? And an Alaska-Jetblue merger would be detrimental for all involved parties.