Robin Hayes, Chief Executive Officer, JetBlue, talks about the evolution of the airline into a travel company. Interview by Graham Newton.

Tell us about your latest financial results and what they mean for the airline going forward?

We’re very pleased with our second quarter results. Revenue doubled compared with the first quarter, which clearly demonstrates the pent-up demand that we expected. The underlying trends are positive, and we’ve also reduced our debt. It’s been a strong summer and we see some significant strides in the recovery.

 

Is the recovery just a matter of time or do you see roadblocks ahead?

I expect the industry recovery will be non-linear and take some time. As of August 2021, there are rising case counts of COVID-19 in the United States and in many other countries. Companies are delaying office openings and travel restrictions remain in place. So, there will be pressure in the short to medium term and it will be some time before we have any sort of stability in the industry.

But when demand comes back, it comes back quickly. We need governments to remove some of the travel restrictions they’ve imposed and to harmonize health protocol measures. But once this is corrected, the bounce back will be strong.

There’s plenty of demand there, particularly for the leisure sector. We’ve already seen the return in demand with our new flights to London from New York. I think some business travel will take longer and so some airlines may need to reposition for the future.

 

Do you see a fundamentally different industry in the years ahead or will 2025 see aviation that looks much as we expected pre-COVID?

The main point is that people want to fly. That remains unchanged. What airlines have to do is be flexible enough to respond to that demand.

Those airlines with more exposure to leisure have performed better because the demand has been strongest in the leisure and visiting friends and relatives (VFR) markets. The domestic market will continue to perform well in comparison to international travel because we expect some form of border restrictions lasting into 2022.

I think customers’ expectations for traveling moving forward will be changed. Enhanced cleaning protocols during the travel journey are here to stay. They will also value flexibility and so I expect airlines to continue to make it easy to cancel tickets or change flights.

 

Is the recent Executive Order on competition and consumer protection a step toward re-regulating the industry in the United States?

The Biden Administration has recognized that there has been a significant amount of consolidation in the industry in the United States. Four airlines now control over 80% of the domestic market. That makes it extremely difficult for new airlines to break into or expand in key hubs.

The fact is we are a fraction of the size we want to be in New York. And that is why we signed our codeshare agreement with American Airlines. It has tripled our presence at New York’s LaGuardia and doubled it at Newark. This new Northeast Alliance will bring low fares to even more people. We are codesharing on 80 routes and it has allowed us to offer a number of new destinations. It will also provide essential competition to Delta at JFK and to United at Newark.

We have to find ways for JetBlue to grow and we will be developing the alliance with American.

 

Why did you decide to compete in the transatlantic market?

There is significant demand between the Northeast US and the United Kingdom and Europe and it was the right time to offer customers greater choice in the transatlantic market. In fact, London is the largest market that JetBlue didn’t already fly to from New York or Boston. The transatlantic market has been characterized by high fares, especially in business class. We offer the unbeatable combination of low fares and award-winning service to our customers. Having JetBlue in the market means fares will come down across the board. That won’t be the result of the pandemic, it will be the JetBlue effect.

We needed to wait for our Airbus A321LR aircraft to be delivered and, of course, to get access to London Heathrow. That wouldn’t have been possible if the pandemic hadn’t freed up slots there.

We start serving London Gatwick from JFK in late September and will be the only carrier at Gatwick offering US service. Flights from Boston to the United Kingdom are scheduled for summer 2022.

 

Has your technology venture been successful and is there any particular technology or idea that has caught your attention?

JetBlue Technology Ventures (JTV) is about us evolving from being an airline to being a travel company. It allows us to invest in dozens of start-ups with great ideas about the future of travel. They help us with their innovative thinking, and we help them by mentoring and growing their business.

The work we’re doing with Joby Aviation is a great example of this. They are involved in the electric vertical take-off and landing (eVTOL) sector and aim to provide commercial service by 2024. The project is providing crucial insight into this new sector of ultra-short haul and electric flying. They’re working hard and were able to become a publicly traded company in August.

JTV has also invested in Universal Hydrodgen, specializing in fueling carbon-free flight, to help us understand this important form of energy and how it may affect the travel sector.

 

What will it take for you to achieve your target of net-zero carbon emissions by 2040?

Last year, JetBlue became the first major US airline to achieve carbon neutrality for all domestic flights and we are offsetting the CO2 emissions from all of JetBlue’s London flights throughout 2021. Last year we announced our commitment to achieve net-zero carbon emissions by 2040.

Airline attention has understandably been on surviving the pandemic. But once we get through that, sustainability will be the number one issue for the industry outside safety.

It will be challenging to completely decarbonize the industry because of the nature of our business; flying aircraft that rely on fossil fuels. We must work together with manufacturers and fuel suppliers to move away from this reliance on fossil fuels to cleaner fuel and ultimately carbon-free power. The first step is sustainable aviation fuels (SAF). JetBlue is already using them in Los Angeles and San Francisco, and we will expand our use to 10% of total jet fuel use by 2030. But completely carbon-free energy sources are the only way forward and that is what we must keep in mind.

 

Why is diversity important to the aviation industry?

Diversity is absolutely vital. Having diversity in your workforce means you reflect the customers you serve, and it also gives the airline a better variety of skills and resources.

At JetBlue, all our frontline staff have access to programs to further their careers. There is a leadership training program, for example, and we also have frontline staff that have successfully applied to be pilots and maintenance technicians. We have similar programs in place at a number of different levels within the organization.

We have good gender diversity at the senior management level. Even so, there’s always more to do, and we’ve committed to meaningfully increasing our minority and female representation in the officer and director ranks by the end of 2025 and will continue to work at increasing diversity across the organization.

 

What topics do you want to tackle in your time remaining as IATA Chair?

It is a great honor to be IATA Chair and see all the hard work that is done by the IATA team.

This has been an unprecedented time in our industry and difficult to navigate. Countries were affected by the pandemic at different times and at different rates and governments across the world responded in different ways. This has led to an extremely complex situation for our industry as every country is dealing with different challenges.

As we come out of the COVID crisis and the virus becomes endemic, then sustainability will be crucial. Public opinion will be formed by industry actions rather than the strategy of individual carriers and we must stay focused on that bigger picture.

We must not replicate what has happened with COVID and have different responses trying to achieve different goals. We must view sustainability through a global lens with harmonized measures that allow airlines to operate on a level playing field.

 

Credit | JetBlue
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