1 00:00:02,520 --> 00:00:08,840 Speaker 1: Bloomberg Audio Studios podcasts, radio news, The. 2 00:00:08,880 --> 00:00:13,160 Speaker 2: Stock Movers podcast, your roundup of companies making moves in 3 00:00:13,200 --> 00:00:17,599 Speaker 2: the stock market, harnessing the power of Bloomberg Data. 4 00:00:17,880 --> 00:00:20,600 Speaker 3: I'm Carol Masser along with Tim Stent of It. Let'stical 5 00:00:20,600 --> 00:00:23,400 Speaker 3: look at some stocks on the move. Jet Blue plans 6 00:00:23,400 --> 00:00:26,360 Speaker 3: to hasten cost cuts by eliminating some flights, ending service 7 00:00:26,400 --> 00:00:29,680 Speaker 3: to a number of cities, and restructuring its leadership ranks 8 00:00:29,720 --> 00:00:33,120 Speaker 3: as economic concertain defeats weaker than expected demand for travel. 9 00:00:33,200 --> 00:00:35,239 Speaker 3: I don't think I'm talking out of turn. You and 10 00:00:35,280 --> 00:00:38,080 Speaker 3: I came back on a red eye on Jet Blue. 11 00:00:38,120 --> 00:00:39,080 Speaker 2: It was in Mint. 12 00:00:39,920 --> 00:00:41,920 Speaker 1: Carol mass your fancy well, I. 13 00:00:42,280 --> 00:00:44,520 Speaker 3: Remember when they introduced it. It was a big deal 14 00:00:45,080 --> 00:00:47,560 Speaker 3: in their business class or first class, and it's really 15 00:00:47,640 --> 00:00:50,279 Speaker 3: nice for if you're going across the country. Having said that, 16 00:00:50,440 --> 00:00:53,279 Speaker 3: mine had a piece missing on the side and it 17 00:00:53,360 --> 00:00:56,760 Speaker 3: was taped, and it just reminded me. And I want 18 00:00:56,800 --> 00:00:59,040 Speaker 3: to bring in our Mary Schlangnstein, who's Bloomberg News USA 19 00:00:59,040 --> 00:01:02,160 Speaker 3: Airlines reporter there in our Dallas bureau. Mary reminding me, 20 00:01:02,320 --> 00:01:05,360 Speaker 3: I remember when all of Jet Blue planes were spanking 21 00:01:05,520 --> 00:01:09,640 Speaker 3: new and it was interesting. Yeah, it was really cool. 22 00:01:09,680 --> 00:01:11,920 Speaker 3: And the endless snacks even if you weren't in business. 23 00:01:12,760 --> 00:01:14,760 Speaker 3: But it was just interesting for me to be sitting 24 00:01:14,760 --> 00:01:16,520 Speaker 3: in that plane and there was a piece missing, and 25 00:01:16,520 --> 00:01:19,200 Speaker 3: then they had taped over another part, and I thought, Wow, 26 00:01:19,920 --> 00:01:23,600 Speaker 3: times have changed. They've got more legacy issues than they 27 00:01:23,600 --> 00:01:25,960 Speaker 3: did certainly when they started. But give us some context 28 00:01:26,000 --> 00:01:28,360 Speaker 3: and kind of where Jet Blue is when it comes 29 00:01:28,360 --> 00:01:30,080 Speaker 3: to all the major carriers that are out there. 30 00:01:30,880 --> 00:01:34,440 Speaker 4: Well, because Jet Blue is primarily focused on US the 31 00:01:34,600 --> 00:01:37,640 Speaker 4: US market, it's suffering, just like a lot of other 32 00:01:37,680 --> 00:01:40,760 Speaker 4: carriers are, from a downturn in demand in the US. 33 00:01:41,000 --> 00:01:43,200 Speaker 4: And this really started earlier in the year and was 34 00:01:43,200 --> 00:01:46,400 Speaker 4: a big surprise to airlines that had expected a really 35 00:01:46,480 --> 00:01:50,320 Speaker 4: profitable and strong demand year in twenty twenty five. But 36 00:01:50,520 --> 00:01:53,559 Speaker 4: when Trump imposed the tariffs and people became very worried 37 00:01:53,600 --> 00:01:57,360 Speaker 4: about a recession, about inflation, about trade wars, the domestic 38 00:01:57,400 --> 00:02:01,320 Speaker 4: demand really fell off a cliff. And that was in April. 39 00:02:01,360 --> 00:02:04,320 Speaker 4: A lot of the carriers came out and they withdrew 40 00:02:04,360 --> 00:02:07,520 Speaker 4: their full year guidance because things were so uncertain. And 41 00:02:07,560 --> 00:02:10,320 Speaker 4: so basically what Jet Blue's saying is, this hasn't gotten 42 00:02:10,360 --> 00:02:12,320 Speaker 4: any better for us, and we're going to have to 43 00:02:12,360 --> 00:02:14,280 Speaker 4: take more steps to cut costs. 44 00:02:14,600 --> 00:02:17,080 Speaker 1: Hey, you know a question that I have about this 45 00:02:17,240 --> 00:02:20,960 Speaker 1: Mary is really when it comes to what is unique 46 00:02:20,960 --> 00:02:24,040 Speaker 1: about Jet Blue and why it's struggling so much. Yes, 47 00:02:24,080 --> 00:02:27,040 Speaker 1: there's been a couple failed types. The Spirit thing didn't 48 00:02:27,040 --> 00:02:29,440 Speaker 1: work out, the American Airlines thing didn't work out. It's 49 00:02:29,480 --> 00:02:32,320 Speaker 1: trying to do something with United that's going to be 50 00:02:32,480 --> 00:02:35,920 Speaker 1: over the next few years. What is the is the 51 00:02:36,000 --> 00:02:38,239 Speaker 1: challenge to meant that it's like, it's not an ultra 52 00:02:38,280 --> 00:02:40,120 Speaker 1: low cost carrier, but it's also not one of the 53 00:02:40,120 --> 00:02:42,000 Speaker 1: big three. Is that the problem? 54 00:02:42,919 --> 00:02:44,960 Speaker 4: That's part of the problem. It's you know, it's not 55 00:02:45,760 --> 00:02:48,880 Speaker 4: it's also not, you know, a full service global airline, 56 00:02:48,880 --> 00:02:52,160 Speaker 4: although it has some international routes, but it's kind of 57 00:02:52,160 --> 00:02:54,320 Speaker 4: stuck in the middle. It's really a niche player, and 58 00:02:54,320 --> 00:02:56,440 Speaker 4: that's what it was trying to get away from when 59 00:02:56,480 --> 00:02:59,280 Speaker 4: it tried to acquire Spirit and did the alliance deal 60 00:02:59,320 --> 00:03:02,800 Speaker 4: with America. It really needed more heft to compete with 61 00:03:02,840 --> 00:03:05,760 Speaker 4: the bigger players in the US industry. Of course, it 62 00:03:05,800 --> 00:03:08,280 Speaker 4: didn't get that, and so Joanna Garrett has been trying 63 00:03:08,280 --> 00:03:11,359 Speaker 4: to restructure the operations at Jet Blue. She's pulled them 64 00:03:11,360 --> 00:03:14,280 Speaker 4: back to their original focus areas of the US Northeast 65 00:03:14,320 --> 00:03:17,000 Speaker 4: and along the East coast, and the situation in terms 66 00:03:17,000 --> 00:03:19,720 Speaker 4: of demand has just really been tough in those areas, 67 00:03:20,160 --> 00:03:20,520 Speaker 4: all right. 68 00:03:20,680 --> 00:03:22,679 Speaker 3: So I don't know what are you hearing, Like what's 69 00:03:22,720 --> 00:03:25,720 Speaker 3: the outlook? I mean, how much time do you give? 70 00:03:25,919 --> 00:03:27,119 Speaker 3: I mean, litter's. 71 00:03:26,840 --> 00:03:28,400 Speaker 1: Running on borrowed money right now? 72 00:03:28,440 --> 00:03:29,760 Speaker 2: Well that's there, you. 73 00:03:29,720 --> 00:03:32,320 Speaker 3: Know, like how long do they have no right right? 74 00:03:32,400 --> 00:03:34,280 Speaker 3: I mean, when companies are going through changes, you give 75 00:03:34,280 --> 00:03:35,840 Speaker 3: them a little bit of time. But Tim makes a 76 00:03:35,840 --> 00:03:37,400 Speaker 3: really good point. You know, you got to look at 77 00:03:37,440 --> 00:03:39,560 Speaker 3: the balance sheet and wonder what kind of pressures they 78 00:03:39,600 --> 00:03:40,200 Speaker 3: have right now. 79 00:03:41,080 --> 00:03:44,320 Speaker 4: Yeah, there really hasn't been that long since Joanna Garretty 80 00:03:44,360 --> 00:03:47,960 Speaker 4: took over. But you know, they do have this United 81 00:03:48,000 --> 00:03:51,040 Speaker 4: plan doing the partnership with United, which they expect to 82 00:03:51,160 --> 00:03:54,320 Speaker 4: really help them a lot. That's going to give United 83 00:03:54,360 --> 00:03:56,560 Speaker 4: access to some routes at JFK, going to give Jet 84 00:03:56,560 --> 00:03:59,080 Speaker 4: Blue access to some slots at Newark, and so they 85 00:03:59,120 --> 00:04:01,680 Speaker 4: expect a lot out of that. They're also partnering on 86 00:04:01,720 --> 00:04:05,800 Speaker 4: their travel bookings of venture that Jet Blue has, which 87 00:04:05,800 --> 00:04:08,360 Speaker 4: should bring a lot of added revenue into Jet Blue. 88 00:04:08,760 --> 00:04:11,480 Speaker 4: But you have to remember that you know, their executive 89 00:04:11,480 --> 00:04:13,840 Speaker 4: spent a lot of time focusing on these failed deals 90 00:04:13,840 --> 00:04:16,080 Speaker 4: and they're really having to go back and focus on 91 00:04:16,160 --> 00:04:18,560 Speaker 4: basic operations at Jet Blue, and it's just a tough 92 00:04:18,560 --> 00:04:19,600 Speaker 4: time to have to do that. 93 00:04:19,880 --> 00:04:21,880 Speaker 3: I'm so glad you went there that with United because 94 00:04:22,000 --> 00:04:25,000 Speaker 3: United was down as well. Is it because of the 95 00:04:25,080 --> 00:04:27,679 Speaker 3: Jet Blue news? And there's some kind of read into 96 00:04:27,839 --> 00:04:29,960 Speaker 3: all right, if jet Blue's having issues, does that mean 97 00:04:30,440 --> 00:04:33,400 Speaker 3: United is too? Help me tie that up now? 98 00:04:33,400 --> 00:04:34,919 Speaker 4: I think really, you know, if you look, all the 99 00:04:34,960 --> 00:04:36,960 Speaker 4: airlines are down by a pretty good amount, and so 100 00:04:36,960 --> 00:04:40,440 Speaker 4: I think it's probably broader market forces that work here, 101 00:04:40,600 --> 00:04:43,480 Speaker 4: things that are affecting a lot of variations of stocks 102 00:04:43,480 --> 00:04:44,640 Speaker 4: and not just the airlines. 103 00:04:45,120 --> 00:04:48,160 Speaker 1: Okay, so obviously a lot of headwinds facing the entire industry. 104 00:04:48,240 --> 00:04:50,839 Speaker 1: Totally moving forward, it sort of builds on what Carol 105 00:04:50,960 --> 00:04:53,120 Speaker 1: was asking about. When it comes to the future of 106 00:04:53,160 --> 00:04:55,800 Speaker 1: this company. Is this I'm not going to ask you 107 00:04:55,839 --> 00:04:59,280 Speaker 1: to make predictions, because that's not the business that we're in. 108 00:05:00,160 --> 00:05:05,080 Speaker 1: But is this a company that analysts say can succeed 109 00:05:05,480 --> 00:05:07,640 Speaker 1: in its current iteration or is it going to have 110 00:05:07,720 --> 00:05:09,080 Speaker 1: to become part of something else? 111 00:05:10,360 --> 00:05:14,760 Speaker 4: No, I don't think anybody's predicting or forecasting that they're 112 00:05:14,760 --> 00:05:17,200 Speaker 4: going to have to become part of something else. You know, 113 00:05:17,680 --> 00:05:20,800 Speaker 4: Merger and acquisition talk in the airline industry is non ending. 114 00:05:20,839 --> 00:05:24,320 Speaker 4: It's always going on. But I haven't seen really anybody 115 00:05:24,360 --> 00:05:26,480 Speaker 4: focusing on the fact that Jet Blue needs to get 116 00:05:26,520 --> 00:05:29,240 Speaker 4: a deal done as soon as possible. Again, I think 117 00:05:29,279 --> 00:05:32,000 Speaker 4: the alliance with United the scene is a big feather 118 00:05:32,080 --> 00:05:33,839 Speaker 4: in their cap and something that is going to pay 119 00:05:33,880 --> 00:05:35,520 Speaker 4: off for them. 120 00:05:35,680 --> 00:05:39,800 Speaker 2: The Stock Movers podcast from Bloomberg Radio. 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