jetBlue Airways’ big challenge: can it achieve its ambitious cost targets?

JetBlue Airways remains bullish in its ability to meet cost targets the company set in late 2016: unit cost growth excluding fuel of 1% or less from 2018 to 2020. Its ambitions are based on a structural cost reduction programme in which the airline aims to reach USD250 million to USD300 million in annual savings on a run rate basis by 2020.

Nothing in jetBlue's calculus in reaching those goals has changed. The airline continues to list numerous opportunities in four major areas - technical operations, corporate expenses, airports and distribution.

JetBlue's targets are being met with some scepticism as the airline faces cost pressure in 2017 stemming from the effects of hurricanes that struck its system in late 3Q2017. JetBlue's response is that, absent pressure it faces on numerous cost items in 2017, its unit costs for 2017 are essentially flat.

That argument is doing little to quell reservations about jetBlue meeting cost targets, given that the airline has historically struggled with its cost performance, and a looming pilot deal is guaranteed to create significant cost pressure.