JetBlue to Open First Airport Lounges, CEO Focuses on ‘Returning to Profitability’ (Video)

For the first time, JetBlue (JBLU) is opening lounges at New York’s JFK Airport and Boston’s Logan International Airport, part of the company’s strategy to attract premium customers and grow market share in an increasingly competitive market.

“We are focused on executing our strategy and focusing on our strengths to return to profitability,” CEO Joanna Geraghty told Yahoo Finance (video above).

To avoid overcrowding, lounge access will be limited primarily to JetBlue’s new premium credit card holders and the airline’s top customers. Complimentary access will be available to TrueBlue Mosaic 4-level members and Transatlantic Mint passengers. (Mint is the name of JetBlue’s first-class seats.)

Lounge benefits include free food, beverages and Wi-Fi. Level 4 TrueBlue Mosaic members and premium credit card holders can bring a guest for free.

Read more: Best Airline Credit Cards for September 2024

It’s the latest initiative in a broader effort by Geraghty, who has been in his seventh year as CEO, to double down on leisure travel, which could mean a shift away from value-oriented offerings toward more luxurious offerings that drive revenue for rival airlines.

JetBlue last reported profitability in 2019, and while the airline recently lowered its future outlook due to lower fuel prices and an increase in bookings in July, the past year has been challenging.

Activist investor Carl Icahn’s Icahn Enterprises (IEP) acquired two board seats and a 10% stake in the company the same week Geraghty took over as CEO. With a focus on cutting costs, she sees alignment with activist shareholders.

“JetBlue is undervalued, and we feel strongly about that,” Geraghty said. “We have a lot of really important assets — whether it’s slots, gateways, our network, our people, our product offering — and we want to make sure we’re getting more value out of that.”

Geraghty also handled the canceled $3.8 billion merger with Spirit Airlines, which was blocked in January after regulatory scrutiny.

“It’s clear that this administration is much more demanding,” Geraghty said of the regulatory environment.

On Wednesday, Alaska Airlines (ALK) completed its acquisition of Hawaiian Airlines (HA) after the Justice Department decided not to block the deal. Geraghty said that doesn’t change her goal.

“We have to be profitable,” she added. “We won’t chase Spirit anymore.”

The airline’s next step on the road to profitability was the sale of $2.75 billion of debt, which prompted Moody’s to downgrade the airline’s rating to junk status.

Despite the challenges, JetBlue’s latest earnings surprised on the upside, with a $25 million profit for the second quarter. That was down 82% from a year earlier but above Wall Street expectations.

The lounges announced today are expected to launch in 2025, so it will be some time before any boost from this initiative is seen in the company’s revenue.

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