High fuel costs force JetBlue to put off delivery of 21 Airbus A320 jets

JetBlue Airways, partly owned by Deutsche Lufthansa AG of Germany, has said it deferred deliveries of 21 Airbus A320 jets. This has been done with a view to slowing down further the airline’s expansion in the midst of enormously high prices of jet fuel. 

The deliveries of 21 Airbus A320 jets have been delayed until 2014 and 2015 instead of arriving from 2009 through 2011, JetBlue said in a statement.

JetBlue will now add 11 planes in 2009 through 2011 – down from a planned 32.

JetBlue Airways, the low-cost airline owned by JetBlue Airways Corporation, is headquartered in the Forest Hills neighborhood of the New York City borough of Queens, the United States. John F Kennedy International Airport, New York, is the home airport of JetBlue.

The airline’s “focus city” operations are at Long Beach in Los Angeles County, California, Logan International Airport, Boston, Fort Lauderdale, Oakland International Airport, Washington-Dulles, and Orlando International Airport. JetBlue mainly serves destinations in the United States, along with flights to the Caribbean, the Bahamas, Bermuda, and Mexico.

JetBlue, the statement added, “plans to sell $160 million in debt that can be converted into stock, with the proceeds going to pay existing borrowings.”

JetBlue joins a long list of carriers, including AMR Corporation’s American Airlines, in restricting growth and cutting back costs in order to tackle a whopping 83% rise in fuel prices in the past year.

American Airlines, the world’s largest airline, had, on May 21, 2008, announced that it was deferring deliveries, reducing US capacity by 12%, as well as abolishing flights between Chicago and Buenos Aires and Chicago and Honolulu.

Dave Barger, chief executive officer of JetBlue, said in the statement: “It is essential to take a more financially conservative approach to managing our business. Pushing back the aircraft deliveries will mean taking on less debt and enhancing access to funds.”

In April 2008, JetBlue had revealed that its capacity would get reduced in size – for the first time ever – in the fourth quarter of 2008 as the airline sells 6 planes to cut its operating costs. Earlier, the airline had cut back its expansion plans for 2008 to 3%-5% from a previous plan of 8%.

In December 2007, JetBlue had announced that it would sell a 19% stake in itself to Deutsche Lufthansa AG, in a deal totaling about $300 million.

It may be noted that 7 small airlines have filed for bankruptcy or stopped operating in the past 5 months.