By Doyinsola Oladipo
NEW YORK, Nov 11 (Reuters) - JetBlue Airways showcased on Wednesday its new domestic first-class product, BlueFirst, at John F. Kennedy International Airport, marking the start of what the airline has described as its largest initiative towards its return to profitability by 2027, weeks after it sought to reassure investors and employees on its financial health following a selloff of its bonds.
With seats already on sale across more than 30 routes and the inaugural BlueFirst flight
scheduled for December, the carrier said offering a first-class product at an accessible price point will give it an edge as domestic fares climb due to the Iran war.
Low-cost carriers across the industry are following a similar playbook, boosting their premium product offerings to capture spending from travelers eager to spend more for perks and leg room. On Tuesday, Frontier opened reservations for its new First Class product. Allegiant said it plans to roll out Allegiant First on select aircraft in 2027.
JetBlue said in October that early response to BlueFirst suggests it is tapping previously unmet demand for a domestic first-class product among its existing customer base. About 35% of bookings have been award redemptions, while Mosaic loyalty members account for nearly a quarter of seats booked, the airline said during its October earnings call.
BlueFirst is a key driver in the company's JetForward plan of achieving operating profitability in 2027 and progressing towards positive free cash flow and at least $1 of earnings per share in 2028.
The New York-based carrier expects BlueFirst to contribute nearly 5 points in seat revenue improvement, a proxy for pricing power, as it is expected to attract travelers in markets with strong premium demand, notably in Boston and New York.
The first-class product features 2-by-2 seating with additional legroom and recline, as well as seatback screens that allow customers to order food and beverages. On flights longer than about 900 miles, customers will receive a meal and premium snacks.
JetBlue, which has about $8.4 billion in debt and finance lease obligations, has not posted an annual profit since 2019 and reported that its third-quarter net loss deepened to $257 million from $143 million a year earlier primarily due to soaring fuel costs.
Chief Executive Joanna Geraghty told Reuters in October that JetBlue was not considering filing for bankruptcy and was not in touch with its creditors. A group of creditors hired restructuring advisers PJT Partners and Akin Gump, according to media reports, raising questions about the carrier's ability to fund a turnaround without having to renegotiate its debt.
The company's roughly $2 billion in bonds backed by its TrueBlue frequent-flyer program were trading at about $47 for every $100 of debt on October 26, down from around $80 at the start of the month, according to LSEG data.
Its fuel expenses jumped 61% in the third quarter but the company said it was able to recover 87% of that from higher fares and saw no meaningful decline in passenger volume.
(Reporting by Doyinsola Oladipo in New York;; Editing by Chizu Nomiyama )
