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JetBlue (JBLU) to Remove Capacity Limit in Early January

Zacks Equity Research
·3 min read

Targeting the forthcoming Christmas and New Year celebrations, JetBlue Airways’ JBLU president and COO Joanna Geraghty in a memo to crewmembers stated that the airline will operate planes with 85% onboard capacity from Dec 2 through Jan 7, 2021. The low-cost carrier has been running flights with 70% capacity since Oct 15, 2020. Also from the same date, management no longer guarantees that the middle or adjacent seats will be left unoccupied.

However, on Jan 8, 2021, the carrier, currently carrying a Zacks Rank #3 (Hold), will operate its flights at full capacity with no seat remaining empty. Notably, demand is typically less in the winter period. Management believes that its policy to do away with the practice of blocking seats is dictated by science. It cited findings from recent studies by the researchers from Harvard T.H. Chan School of Public Health and the U.S. Department of Defense as the guiding force behind its decision.

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The studies substantiate the efficacy of HEPA filters and the disciplined practice of wearing masks by passengers (which is mandatory on JetBlue flights) in stemming the onboard spread of coronavirus, thereby validating the aircraft cabin’s safety. The study from Harvard shows that advanced hospital-grade HEPA air filtration systems make up for the lack of distance between passengers. Naturally, these findings encouraged JetBlue to remove social-distancing norms on its flights and sell all its seats Jan 8 onward.

Continuing with the carrier’s customer-friendly approach, Geraghty stated that if any passenger who already booked a seat on any JetBlue flight for travel on or after Jan 8 feels dissatisfied with this decision can request for a full refund of his/her ticket. However, the particular passenger must have paid the fare by Nov 13 with Nov 27 being the last day to apply for its refund.

Meanwhile, Southwest Airlines LUV has decided not to block the middle seats on its flights after Nov 30, 2020. Notably, blocked middle seats induced a substantial loss of revenues for the airline in the September quarter. However, Delta Air Lines DAL and Alaska Air Group ALK will continue blocking the seats in the center through Jan 6, 2021.

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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
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