In the wake of the earthquakes that have rattled Puerto Rico since late December, JetBlue will be “temporarily reducing capacity” to protect its revenue base at least through the first quarter, COO Joanna Geraghty said during a call with analysts to discuss the carrier’s fourth quarter 2019 results.
“We remain committed to the island, but given the most recent booking trends, we are temporarily reducing capacity to protect RASM [revenue per available seat mile]. We would anticipate restoring this flying as demand recovers,” she said.
She explained that the company’s first quarter guidance calls for an increase in its RASM of between 0% to 3%, which includes “a headwind of approximately 0.5 point to our system RASM due to earthquakes in Puerto Rico.”
“Puerto Rico remains an important part of our network. It’s been a significant margin contributor and we see these pressures from time to time in Puerto Rico and the rest of the industry,” she said.
JetBlue is Puerto Rico’s largest airline, with routes out of the Luis Muñoz Marín International Airport, the Rafael Hernández Airport in Aguadilla and the Mercedita Airport in Ponce.
“We do expect to make temporary capacity adjustments in the short term. It’s difficult to forecast the impact of Puerto Rico,” she told analysts.
During the call, JetBlue executives were not specific about the planned cutbacks to its flight schedule to the island, which is currently in the midst of its peak tourism season. There has also been a surge in demand for outbound flights from island residents looking to escape from the ongoing tremors.
“We’re doing our best to forecast what we think the impact is. And taking tactical adjustments to mitigate the demand environment as needed,” she added.
During the call, JetBlue CEO Robin Hayes also addressed the island’s current situation, saying the impact has been significant.
“Following a natural disaster, it is common to see a lingering demand impact even in nearby areas that were not damaged. History suggests that bookings were normalized, where we expect a random impact in the first quarter,” said Hayes.
“While events such as this one have masked some of the progress we have made in our building blocks, we’re confident in our plan to grow our revenues,” he said.
He also took the opportunity to thank its Puerto Rico crew and staff for “volunteering your time helping in the relief efforts. As we have done in the past, we are working closely with the authorities and community to support short-term needs and help in the recovery.”