Kirk LaughlinJetBlue Airways Corp., with 65 daily trips to the Caribbean and Latin America, may fly to more distant international destinations as it adds fuel-saving winglets to planes and receives new Airbus SAS A320neo jets.
The changes, along with replacing smaller Embraer E190 jets with bigger planes on some routes, will allow the New York-based carrier to fly farther and carry more passengers. JetBlue announced a $2.5 billion order Tuesday for 40 A320neos.
The plan will allow JetBlue to expand its strategy of focusing flying in New York, Boston and the Caribbean. The carrier said it also is likely to use Airbus A321 aircraft it will receive to boost service on high-demand cross-country routes between New York and San Francisco and Los Angeles.
“We have always said as we’ve grown in the Caribbean and Latin America that we still see significant opportunities, and some of those have been range-constrained,” Robin Hayes, JetBlue’s chief commercial officer, said on a conference call. “With the winglets and, later, neos, some markets we can’t serve today absolutely are destinations we can consider.”
From January 2009 to May 2011, JetBlue increased capacity 44 percent in the Caribbean and Latin America. It is the largest carrier in Puerto Rico, based on available seats.
JetBlue will select an engine manufacturer for the A320neos by the end of this year, Chief Executive Officer Dave Barger said on the call. It will choose between Pratt & Whitney and CFM International, a joint venture of General Electric Co. and Safran SA of France. JetBlue’s price for the 40 planes was less than their list value of about $3.4 billion, said Chief Financial Officer Ed Barnes.
JetBlue is paring to 75 from 100 the number of 100-seat E190s it will fly. While the airline will expand its current fleet of 46 E190s, it won’t fly more than 75 as it replaces the Embraers with larger Airbus jets in high-demand markets.
Embraer SA has agreed to work with JetBlue to remarket the 25 remaining E190s it had ordered, Barnes said. The airline can sell some of its E190s and replace them with new planes, sell its delivery positions to other airlines or opt out of the remaining orders and pay a penalty to Embraer, he said.
JetBlue also said it will convert 30 of 52 existing A320 orders to A321s and delay the deliveries of eight A320s to 2017 from 2014 and 2015. The changes will reduce JetBlue’s near-term spending on planes by $800 million, Barnes said.
Airbus A320s delivered starting in 2013 will come with winglets, and the airline will retrofit existing A320s with the fuel-saving wingtips.
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