From high unemployment to rising gas prices, numerous economic headwinds are straining consumers today. But talk to JetBlue President and CEO David Barger and you may not get that sense. In particular, and even with oil prices rising sharply this year, Barger says his company is managing the higher costs and at the same time still seeing fliers seek out its jets.
The Daily Ticker's Aaron Task sat down with the head of the value-based airline at its T5 terminal at John F. Kennedy airport to ask him about the impact of rising oil prices.
From JetBlue's perspective, all is well even as the company's fuel costs were up $91 million, or 35 percent, year-over-year in the first quarter. The New York-based airline posted net income of $3 million, compared with a $1 million loss for the same time period in 2010.
Barger says above that, JetBlue saw "strong economic growth" last quarter and expects nothing less for the second. Right now, he says, rising oil prices aren't having a damaging effect and could actually be helping business as consumers decide it's less expensive to fly than drive.
"JetBlue has been built for more difficult times," Barger says referring to its low-cost business model.
However, the company did follow suit with industry rate hikes in the first quarter to help cover the expensive cost of oil. While the industry raised its rates roughly 20 times for the first part of the year, Barger says JetBlue only had to up fares 13 times -- albeit to its all-time high average price of $150 for a one-way ticket.
"What we are really asking is for the traveling public to share in the cost of energy, and people understand that [and] they get that," he says, while not ruling out future increases.
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