Vacations in turmoil as major airline slashes flights and grounds planes amid recession fears
Vacations have been thrown into turmoil after JetBlue announced plans to slash summer flights.
The budget airline is launching new cost-saving measures after weak travel demand is threatening its bottom line.
JetBlue admitted that its chances of breaking even this year are 'unlikely', in a memo seen by Reuters.
As a result the carrier is planning to wind down less popular routes and cutting its leadership team, CEO Joanna Geraghty told employees in the note.
'We're hopeful demand and bookings will rebound, but even a recovery won't fully offset the ground we've lost this year and our path back to profitability will take longer than we'd hoped,' Geraghty said.
US airlines have taken a hit after President Trump's aggressive trade policies and border crackdowns have seen a significant pullback in travel to the US.
JetBlue is not alone in scaling back capacity ahead of the summer travel season, with United also cutting four in every 100 of its domestic flights.
'While most airlines are feeling the impact, it's especially frustrating for us, as we had hoped to reach break-even operating margin this year, which now seems unlikely,' Geraghty explained.
JetBlue is under additional financial strain as it us undergoing inspections of some of its engines, which has grounded a number of its aircraft.
In other efforts to cut costs the airline is planning to park six of its Airbus jets instead of retrofitting them as initially planned.
It comes after JetBlue previously pulled its full year forecast in April to readjust to the new demand environment.
The company also previously announced its plans to make a $3 billion saving by deferring buying 44 new Airbus jets.
JetBlue's shares are down more than 44 percent so far this year.
Earlier this year United announced it would be axing flights due to a dip in demand for US travel.
'The softer economic situation is creating softer demand for travel,' CEO Scott Kirby told investors on the airline's first quarter earnings call in April.
United said it also saw flights coming out of Canada see a 9 percent dip, with the rest of international demand coming in to the US down 6 percent.
Canadians have been boycotting US travel after Trump threatened to make America's northern neighbor the '51st state.'
As a result air travel dropped 13.5 percent in March compared to the same time last year.
Flair Airlines was forced to abandoned its routes from Vancouver and Calgary to Phoenix, Arizona as a result of such low demand.
Tourist hotspots that rely heavily on Canadian visitors, such as Buffalo, New York and Old Orchard Beach in Maine have seen dramatic drop-offs in visits.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
34 minutes ago
- Telegraph
Race Across the World's reunion episode was a charming farewell to one of its best series
Nobody really needed Race Across the World: The Reunion (BBC One). The race finished last week in an entirely satisfactory manner. However, the BBC likes to flog a hit for all its worth, so viewers got this follow-up programme anyway. I'm glad we did. It was a suitably life-affirming farewell to a heartwarming series. Six months since the globe-trotting contest climaxed at the southernmost tip of India, our five intrepid pairs gathered to reflect on their epic 14,000km odyssey across China, Nepal and India. Meeting up with friends you made on holiday often backfires. Once the tans fade and the sundowners stop flowing, so does the conversation. Happily, this was a lot less awkward. They met as strangers but are forever bound together by their shared experience. The forgotten team, former married couple Yin and Gaz, were knocked out before the midway mark but now gained a sense of closure. Yin tearfully admitted how she'd struggled with her heritage while travelling through China. Since returning home, she had built bridges with her family and made peace with her past. Sixtysomething siblings Brian and Melvyn, who finished fourth, rebuilt their brotherly bond on the road.'Things got a bit emotional but a cold beer sorted it,' said the typically phlegmatic Melvyn. Having emerged as the race's cult hero, he stole the show again, declaring, 'Up the oldies!' Still the cheering updates kept coming. Teenage sweethearts Fin and Sioned, who claimed the bronze medal, had caught the travel bug and since been on a trip around Australia. The race runners-up, sisters Elizabeth and Letitia, were inspired to build their own homestay in Kenya. Victorious mother-and-son duo Caroline and Tom were similarly reborn. Caroline was newly carefree, while Tom's confidence had blossomed so much that he was now self-employed and excitedly planning his next adventure. Those who had become tired of the sob stories won't have been appeased by some of the navel-gazing. There was plentiful talk of 'personal growth' and 'moving forward'. Yet the show and its participants are so likeably wholesome, it was hard to be too cynical. Caroline and Tom might have clinched the £20,000 prize but money was barely mentioned. Indeed, the winnings are so incidental to the show's magical mix, it's easy to forget there's cash involved at all. When it comes to Race Across the World, it truly is the taking part that counts. We were treated to unseen clips – cue backpack-laden dashes down streets, like panicking turtles – and breathtaking scenery. Everyone paid tribute to helpful locals and praised the kindness of strangers. Behind-the-scenes footage revealed how embedded film crews captured their every move. It made for a fascinating insight into the vast logistical operation required to make the show. My main complaint was that the location for the reunion – a wood-panelled suite at London's L'Oscar hotel – bore a distracting resemblance to the Round Table showdowns from BBC stablemate The Traitors. I kept expecting a tweed-clad Claudia Winkleman to pop up and demand that somebody be banished. Please, anyone but Melvyn. The last word went to winner Tom. 'It's important to enjoy the journey, as well as the destination,' he concluded. This was a celebratory, albeit non-essential, way to sign off. Now how about applying for next year's race?
Reuters
44 minutes ago
- Reuters
Steelmaker Ternium pushes for stronger USMCA trade pact in face of tariffs
MEXICO CITY, June 18 (Reuters) - Ternium (TX.N), opens new tab, a steelmaker with a massive Mexico business, on Wednesday pushed for stronger terms of a regional trade agreement ahead of a pending review, despite current headwinds from steel tariffs imposed by the government of U.S. President Donald Trump. Shipments from Mexico to the U.S. under the U.S.-Mexico-Canada (USMCA) trade agreement are currently exempt from tariffs, though steel products face a whopping 50% tariff. The U.S. and Mexico are negotiating a deal to reduce or eliminate the steel tariffs on imports up to a certain volume, Reuters reported last week. The USMCA deal is up for review next year, though some officials believe it may come sooner. In a presentation to analysts in New York on Wednesday, Ternium pushed for stronger "rules of origin" as part of the review to protect the region against what it called unfair trade. Steelmakers have accused China of engaging in a practice known as dumping, in which they sell their product abroad below market value. Products can be shipped through another country before reaching their final destination, often making their origin unclear. "While management acknowledges the adverse effects on the global economy, they view the U.S. (tariffs) as beneficial for long-term globalization," analysts at J.P. Morgan said in a note to clients. The U.S. shipped 2.28 million metric tons more of steel to Mexico than Mexico shipped to the U.S. in 2024, Ternium said, though the U.S. government has previously accused Mexico of flooding its domestic market with steel. Ternium is looking to boost its market share in Mexico's local market in the coming years, management said. In Brazil, it said Chinese imports continue to pressure the market. Ternium could also acquire the remaining shares it does not currently hold in Brazil's Usiminas ( opens new tab, the J.P. Morgan analysts said, though it is not a priority at the moment.
Reuters
an hour ago
- Reuters
Apple eyes using AI to design its chips, technology executive says
SAN FRANCISCO, June 18 (Reuters) - Apple (AAPL.O), opens new tab is interested in tapping generative artificial intelligence to help speed up the design of the custom chips at the heart of its devices, its top hardware technology executive said in private remarks last month. Johny Srouji, Apple's senior vice president of hardware technologies, made the remarks in a speech in Belgium, where he was receiving an award from Imec, an independent semiconductor research and development group that works closely with most of the world's biggest chipmakers. In the speech, a recording of which was reviewed by Reuters, Srouji outlined Apple's development of custom chips from the first A4 chip in an iPhone in 2010 to the most recent chips that power Mac desktop computers and the Vision Pro headset. He said one of the key lessons Apple learned was that it needed to use the most cutting-edge tools available to design its chips, including the latest chip design software from electronic design automation (EDA) firms. The two biggest players in that industry - Cadence Design Systems (CDNS.O), opens new tab and Synopsys (SNPS.O), opens new tab - have been racing to add artificial intelligence to their offerings. "EDA companies are super critical in supporting our chip design complexities," Srouji said in his remarks. "Generative AI techniques have a high potential in getting more design work in less time, and it can be a huge productivity boost." Srouji said another key lesson Apple learned in designing its own chips was to make big bets and not look back. When Apple transitioned its Mac computers - its oldest active product line - from Intel's chips to its own chips in 2020, it made no contingency plans in case the switch did not work. "Moving the Mac to Apple Silicon was a huge bet for us. There was no backup plan, no split-the lineup plan, so we went all in, including a monumental software effort," Srouji said.
