Jetblue Airbus A321

JetBlue Eyes First Trans-Atlantic Flights With Airbus A321 Order

JetBlue Airways Corp. ordered 30 Airbus Group SE A321 jetliners valued at $3.6 billion as the carrier expands its premium cabin service and considers adding its first trans-Atlantic flights.

JetBlue agreed to buy 15 A321s for delivery starting next year, and another 15 A321s with new, more fuel efficient engines starting in 2020. The carrier can switch some of the second batch to longer-range versions that would enable it to fly across the Atlantic from cities in the eastern U.S.

The airline is stepping up the growth of Mint after missing out on a chance to buy Virgin America Inc. earlier this year, with the goal of claiming a bigger piece of cross-country markets by offering first-class service at a discount price. The New York-based carrier will decide before the end of 2017 whether to start trans-Atlantic service.

“Our intention is that will be a plane that will give us trans-Atlantic range,” Marty St. George, executive vice president for planning, said in an interview. “We certainly see Europe as a great opportunity.”

JetBlue climbed 6.1 percent to $18.33 at 1:31 p.m. in New York trading after earlier jumping as much as 9.6 percent, the most intraday since November 2014.

The $3.6 billion is based on list prices for the aircraft. Discounts are common for large purchases.

Mint Option

Five of the first 15 planes under the new order will be in Mint, the airline said. While most of the other 10 are expected also to have the premium cabin, JetBlue can switch between that configuration and all-coach, said Doug McGraw, a spokesman. The 15 that begin delivering in 2020 have the same option.

The A321LR “could well be a game-changer for us,” Chief Executive Officer Robin Hayes said on a conference call Tuesday. The plane has extra fuel tanks that enable it to fly farther that the A321, according to Airbus. It features a similar range and seating capacity, along with lower costs, to a Boeing Co. 757-200.

JetBlue already is evaluating trans-Atlantic flights, though it can wait until the end of 2017 to make any decisions. The A321LR doesn’t have enough range to reach the largest cities deeper into South America, beyond where JetBlue already flies.

Airline Playbook

“When we see markets across the Atlantic that are important business markets that have very high fares, we think that’s a great opportunity for us,” St. George said. “That is the JetBlue playbook.”

JetBlue reported second-quarter earnings of 53 cents a share, topping the 49-cent average of analyst estimates compiled by Bloomberg. Revenue rose 1.9 percent to $1.64 billion, matching analysts’ expectations.

The carrier said it expects revenue from each seat flown a mile to decrease 2.5 percent to 3 percent year-over-year in July, which would be the third straight month that it pared a decline in the key industry metric. “Meaningful sequential improvement” also is expected between the second and third quarters, the airline said.

JetBlue started Mint service on the New York-Los Angeles and New York-San Francisco routes in 2014 to retain passengers who were looking for more amenities on coast-to-coast flights at a lower price. Mint fares can dip as low as $599 each way. Routes offering the premium cabin are some of the airline’s most profitable, and it will expand the service to cities including Las Vegas and Seattle and more destinations in the Caribbean.

The Mint cabin includes 16 lie-flat seats, including four “private suites” that have partitions that can be closed. Passengers also have 15-inch flat video screens on seat backs, power outlets, USB ports and customized menus.

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