LEGACY LABOUR DRAG
In terms of scale and operating model, America’s JetBlue and Ireland’s Ryanair have a lot in common. However, there are two important differences: Ryanair doesn’t do transatlantic flights and JetBlue doesn’t make a profit.
JetBlue recently commenced its daily flights from Dublin to New York JFK and Boston Logan, with the service running through the summer until 30 September. JetBlue has been flying from the US to London since 2021 and this year is also operating routes to Paris and Amsterdam, with Edinburgh being added later this spring.
The international routes are a very small part of the JetBlue business. JetBlue bills itself as ‘New York’s Hometown Airline’, and is a leading carrier in Boston, Fort Lauderdale, Los Angeles, Orlando and San Juan. The airline flies on over 100 routes throughout the US, Latin America, the Caribbean, Canada and Europe, and in 2023 had revenue of $9.6bn (€8.7bn).
That’s not far behind the €10.8bn turnover at Ryanair for the year to March 2023. But while Ryanair managed an operating profit of €1.4bn in FY23, the corresponding figure at JetBlue was a loss of $230m (€210m). This helps explain why while JetBlue is valued by the stock market at $2.3bn (€2.1bn), Ryanair’s market cap is €23.8bn.
On one key input, JetBlue has an advantage over the Irish carrier. The cost of JetBlue’s aircraft fuel was 28.3% of turnover last year, while at Ryanair fuel and oil ate up 37.4% of revenue. At JetBlue, the landing fees overhead was 6.8% of revenue in 2023, while at Ryanair the same overhead was 11.5%, and Ryanair also has to pay 8.4% of annual turnover in route charges.
Where Ryanair has the most important edge over JetBlue is in staff costs. The New York carrier’s annual report gloomily notes that the airline’s salaries, wages and benefits costs increase as the workforce
Maja Gedosev, JetBlue GM Europe, and Gary McLean, managing director of Dublin Airport
ages. “As our crewmembers’ tenure with JetBlue matures, our salaries, wages, and benefits costs increase. As our overall workforce ages, we expect the cost of our medical and related benefits to increase as well, despite an increased corporate focus on crewmember wellness,” says the report.
In 2023, JetBlue’s payroll overhead increased by 11.2%, primarily due to a new contract agreed with the pilot union. This called for an initial pay increase of 14% and an additional 3% pay increase last August, and raised the annual outlay on staff costs to $3,055m (€2,770m). Over at Ryanair, staff costs for FY23 came in at €1,190m.
The difference in staff costs between the two airlines explains why Ryanair makes a profit and JetBlue does not.