Shareholder activism, usually led by hedge funds, is often a headache for public firms. However Joanna Geraghty, the CEO of JetBlue Airways Company and the primary lady to steer the corporate, is staying constructive amid the airline’s ongoing engagement with the activist investor Carl Icahn, who earlier this yr took a ten p.c stake within the firm and appointed two of his representatives to JetBlue’s board.
The airline has “had actually constructive discussions” with members of Icahn’s workforce, stated Geraghty yesterday (Sept. 19) whereas talking on the Skift International Discussion board 2024. “We’re very clear, and we’re targeted on returning to profitability—we’re all aligned in that regard.”
Regardless of JetBlue’s optimism, Geraghty expressed sympathy for comparable challenges at Southwest Airways. The rival firm has been tackling a extra aggressive activist marketing campaign from Paul Singer’s Elliott Funding Administration, which is reportedly seeking to oust Southwest CEO Robert Jordan. “I don’t want it on anyone as a result of it’s laborious. It may be distracting at instances,” Geraghty stated.
Geraghty, who was appointed high govt of JetBlue in February following a virtually 20-year tenure with the corporate, hasn’t had the smoothest experience this yr. JetBlue inventory is down 21 p.c previously six months as the corporate has misplaced cash since previous to Covid-19. The airline’s struggles have been exacerbated by its concentrate on a sequence of failed acquisitions and partnerships. In January, a federal choose blocked JetBlue’s proposed acquisition of Spirit Airways, following a 2023 choice to finish an alliance between JetBlue and American Airways (AAL) within the Northeast U.S.
The airline isn’t more likely to pursue any comparable mergers sooner or later, in line with Geraghty. “The problem with the present atmosphere that we’re in, however the current approval of Alaskan and Hawaiian, is it’s tough to see how a merger can occur with this administration.”
The New York-based airline can also be coping with setbacks associated to the delayed deployment of latest plane. Round a dozen of its new Airbus planes stay grounded as a result of points with their Pratt & Whitney 1100G-JM geared turbofan engines, a scenario Geraghty described as “an extremely irritating expertise.”
Regardless of the corporate’s failed acquisitions and lack of profitability, the chief is concentrated on “turning the nook and creating a greater, stronger firm for our clients and, actually importantly, for our crew members.”
A central piece of Geraghty’s turnaround plan is the finances airline’s premium choices. The airline yesterday unveiled plans to ascertain its first-ever airport lounges, which the CEO stated is “in all probability the only most important factor clients have requested for.” The JetBlue lounges will begin off in New York and Boston, with the primary scheduled to open at John F. Kennedy Worldwide Airport late subsequent yr adopted by one other on the Boston Logan Worldwide Airport.
“On the finish of the day, I really feel that I’m on this position for a time frame to assist shepherd JetBlue by a difficult interval,” stated Geraghty.