NEW YORK Dec 13 JetBlue Airways Corp
on Tuesday said it was earning more from checked bag fees and
higher-priced fares than expected and plans to double the money
it will return to shareholders via stock buybacks.
The New York-based airline said that new fares and fees for
add-ons it rolled out last year, including a $20 checked bag
charge for its lowest-fare customers, generated an expected $260
million in 2016, versus a prior forecast of $200 million.
As part of the windfall, the carrier is expanding its share
repurchase program to $500 million from $250 million through
JetBlue shares jumped 5 percent in early Tuesday trade as
unit revenue guidance released during after-market hours on
Monday was better than investors had expected.
JetBlue also said it would generate up to $300 million in
annual cost savings by 2020 through several initiatives,
including up to $65 million from evaluating suppliers and
spending at airports and automating more of the customer
experience from check-in to boarding.
Staff, once constrained to stay behind a counter, will be
free to approach customers who need help most, interim Chief
Financial Officer Jim Leddy said in an interview.
The change is not about headcount and will "not necessarily"
result in fewer hours or lower pay for employees, he said.
Cost savings also include about $20 million per year from
reviewing agreements with online travel agencies, JetBlue said.
"We're very frustrated there's just no way to get across the
real value of a JetBlue experience versus flying any of our
competitors," Marty St. George, JetBlue's executive vice
president of commercial and planning, said during the same
interview. "Frankly, I think that getting back towards a direct
model is probably a better solution for us."
For months, airlines have tried to draw passengers away from
low-price comparison sites and back to their own home pages.
They see customizing travel packages with airport lounge access,
extra legroom or hotel stays as the area where revenue has the
most room to grow.
The airlines' efforts have put them at odds with some online
travel agencies that do not allow for upselling beyond the base
airfare. It also has drawn ire from consumer advocates who say
airlines are attempting to hamper comparison shopping and boost
(Reporting By Jeffrey Dastin and Alana Wise in New York;
Editing by Alan Crosby)