Specialist
Former EVP at JetBlue Airways Corp
Agenda
- Rising coronavirus cases and compounded impact on the airline industry and JetBlue Airways (NASDAQ: JBLU)
- JetBlue's demand exposure and ability to operate in a contracting market
- Cost-cutting initiatives to date and potential implications on long-term competitiveness
- Potential change in strategic focus due to changes in demand and traveller behaviour
Questions
1.
Could you give an overview of JetBlue Airways, including where it’s focused and its pre-coronavirus strategy?
2.
How might consolidating operations in Washington, Boston, New York, San Francisco and Los Angeles impact JetBlue’s ability to serve customers in an eventual recovery?
3.
Why do you think JetBlue is being more aggressive? Is it due to the opportunity to gain share presenting itself? What’s giving the company the flexibility to take this stance – does it have lower costs?
4.
What feedback were you aware of for JetBlue’s business class pre-coronavirus?
5.
We’ve mentioned how JetBlue has been a low-cost provider. Could the company do better in this environment at driving down costs, across salary, wages or benefits? Were those low enough already?
6.
What’s your reaction to the JetBlue-American Airlines partnership? What opportunities does it create, and could there be any drawbacks to other initiatives JetBlue is undertaking?
7.
Do you think the partnership presents any opportunities for JetBlue outside the northeast?
8.
Who in the industry do you think will be most impacted by the partnership as it rolls out – Delta, United or smaller carriers?
9.
Has JetBlue pursued any similar partnerships before? Does this represent a change in strategy?
10.
Could you elaborate on JetBlue having the mechanics to make the American partnership happen? Are you talking about the computer systems, or the planes?
11.
I know JetBlue was assessing flying to London. Could the American partnership reduce the company’s need to do Europe?
12.
What are your thoughts on JetBlue’s fleet in an eventual recovery? Could having a non-Boeing fleet be an advantage? Might it be unimportant as we recover, as people will be focused on other things?
13.
Do you think JetBlue is doing anything unique or especially effective to make customers feel safe, beyond blocking middle seats? Have any other airlines made notable moves?
14.
Do you think leisure customers currently feel safer on JetBlue? Is it like any other airline?
15.
Could you discuss JetBlue’s loyalty programme? United and American have used theirs as collateral for some debt deals, but would you say there’s anything special about JetBlue’s programme vs competitors’?
16.
You suggested an appraisal may have been performed on JetBlue’s loyalty programme. Do you have a sense of what an appraiser assesses to value a loyalty programme?
17.
You estimated JetBlue’s cash burn at USD 7m-9m per day. How do you think that compares to JetBlue’s peers, given its liquidity of over USD 3bn? The company will still want to hammer away at costs.
18.
Could there be more opportunities for sale leasebacks? JetBlue has done a small amount of them, but do you think more are viable?
19.
What could cause airlines to seek CARES [Coronavirus Aid, Relief, and Economic Security] Act funds? How do you evaluate this support vs other options?
20.
Could you comment on JetBlue’s labour relations? You mentioned success around getting more employees to accept voluntary retirements, but are there generally good relations here? Would you say this is an advantage or disadvantage for JetBlue?
21.
When do you think the airline industry will recover?
22.
Do you think today’s operating environment is creating more opportunities for JetBlue, assuming a vaccine does come around? Are there other initiatives you think the company should undertake?
23.
How much business travel do you predict will never come back?
24.
What would you summarise as JetBlue’s current strengths?
25.
What do you think our clients should be asking JetBlue’s management?
26.
Boeing CEO Dave Calhoun generated controversy earlier in 2020 by predicting that a major US carrier would declare a Chapter 11 bankruptcy. I know liquidity has been raised, but do you think an American carrier will go Chapter 11?
27.
What are your final thoughts on JetBlue?
