The Path Forward: Travel
Welcome, Mr. Hayes, and welcome to our audience around the country.
MR. HAYES: Hey, Frances, how's it going? It's--I'm looking at you and I'm looking at myself speaking. It's--
MS. SELLERS: Good, okay, and [audio distortion]--
MR. HAYES: Yeah, exactly.
MS. SELLERS: I'd like to start with one issue that comes up among all my friends and colleagues when I talk to them about getting back in the air, and that is they're scared.
I know that JetBlue was the first airline to mandate the use of face masks, but what are you doing specifically to get people back up in the air?
MR. HAYES: No, Frances, again, thanks for having me today, and I think that's the most important issue that we face as an industry right now. How do we give people confidence to fly again?
You know, we are seeing, in the U.S. at least, volumes starting to come back, but still a fraction of what we would normally expect at this time of year.
So, what we did at JetBlue is we rolled out our "Safety from the Ground Up" program, and it had a number of elements: The first thing is making sure our crewmembers are healthy and well. And we had to make some changes to some of our internal policies to make sure that, if crewmembers weren't well, if they had been tested for COVID and tested positive or if they'd been asked to quarantine that they knew it was absolutely okay not to come to work. So, that was the first thing.
We're also rolling out--actually, from the 1st of June--temperature checks, as well, for our crewmembers.
The second part of that is making sure our customers didn't fly when they didn't feel well. So, giving our customers the ability to rebook, change the dates of their flights without penalty. So, we introduced that a couple of months ago, actually.
The third part of our "Safety from the Ground Up" program is just making sure that airplanes are sanitized. We call it "healthy air," making sure airplanes are sanitized, that they're clean, airplanes have HEPA filters. I mean, I think no one knew what a HEPA filter was, now. And every time an airline executive does something like this, we talk about HEPA filters. And we do it because actually what a lot of people don't know is the air in an airplane is recycled completely every three to five minutes. We also were the first airline to ask customers to wear masks.
And then, also creating, you know, more space. So, we are [audio distortion] blocking the middle seats, we are blocking the aisle seats to make sure that you're never sitting next to someone that you--[audio distortion] to download the app. It's always good for an airline when people download the app, but you know, use that app to check in, use the app to travel through the airport, scan the app when you get onto your airplane.
And then, amending our service routines to-
MS. SELLERS: I have a question about that. How many of these changes do you think a part--
MR. HAYES: Yeah.
MS. SELLERS: Will cancelation and change fees come back. Am I ever going to sit next to a stranger again on a plane?
MR. HAYES: Well, I think you are going to definitely sit next to a stranger again, I'm afraid, on a plane, because the economics of our industry--most airlines have a break-even load factor of 75 to 80 percent. So, clearly, capping flights at 55 to 60 percent, which is what we're doing right now through July the 6th is not sustainable.
But you know, in terms of--you know, and I think you hear a lot of people talk about what's temporary, what's permanent, I do think that airlines are going to have to rethink, you know, how they sell their product, because it's not ever going to be really acceptable, I don't think, for someone who is unwell to feel that they've been made to fly.
And so, I think airlines are going to have to think about how they, you know, monetize their fare structure, how they create products that give people the ability to change flights more easily than perhaps they felt in the past they could.
MS. SELLERS: One of the innovations that we've heard about, not only the HEPA filters, which you mentioned, but electrostatic fogging.
MR. HAYES: Oh, yes.
MS. SELLERS: What is that? How does it work? And how do you know it works on planes?
MR. HAYES: Well, you know, I--I remember when I started first flying many years ago, used to go to all these exotic places and the crew would come through with what looked like deodorant cans. You know, they'd go down and they'd spray them into the air and all that stuff was landing on us and it was there to stop--you know, stop insects and--had insecticide in it.
Thankfully, we've come a long way since then. And you know, what we're doing now is just a much--high level of cleaning. And you can do that in a number of different ways. You can do a--you know, a hand clean or you can use these electrostatic cleaners.
And what's that doing? Is really taking the product that we are using to sanitizing--sanitize the airplanes, and it's like an aerosol. You go through the cabin and you spray it and then it kind of gets into all the nooks and crannies that it's hard for someone to go in there with a hand and do.
So, again, the thing about safety on the ground, it's a layered approach. There's not one single thing that you can do that is the silver bullet, here, but it's a number of things that work together to create a sense that flying really is as safe as anything else you would do when you leave your house.
MS. SELLERS: So, a number of our listeners and readers have sent in questions, and they're particularly concerned, I think, about personal safety.
One person, Cindy Nayer [phonetic] from California, asks: "What do you do about people who are immunocompromised? Can you make special circumstances for them?"
MR. HAYES: Well, again, you know, everyone's got different health issues. And you know, I think everyone is going to have to make their own decision when it's safe to fly again.
You know, we believe that, you know, the use of masks, keeping the seats next to you free as we're doing for now, you know, we think that that is offering a significant level of protection.
But again, you know, everyone is going to have to make a decision to fly based on, one, what they think their health risk is; and two, what level of risk they're comfortable in taking when they sort of do an any at the end of the day. And so, you know, I think it's--yeah, go ahead, I'm sorry.
MS. SELLERS: That brings me to another question from a reader, a very interesting one, from Jamie Bennetts [phonetic] in California, who says, "What are you going to do--what are you doing now and what will you do about people who decide they do not want to wear masks when they get on your planes?"
MR. HAYES: Well, there's all these questions from California.
MS. SELLERS: I think [audio distortion] Florida. But anyway, this is--
MR. HAYES: No, it's a good question. So, the good news is the vast majority of our customers are complying with the face mask directive, and that's very important. Look, we know that face masks aren't great to wear. I mean, you know, I wear it when I go to the store, I wear it when I'm on the street. Now, I don't love having it on, but you know, we do know it's a significant mitigant. And so, we are asking all our customers to wear face masks.
Our inflight crew members are amazing at persuading people, sometimes to do things that they don't want to do. And so, we train them in how to manage conflict. We call it the ABCs, ask, bargain, and convince. And again, when we go through that, most customers are--will do--wear the mask.
You know, at the end of the day, though, if someone refuses to put a mask on before they board the airplane, we won't let them board. And secondly, when, if they are in the air, flight, and they take their mask off--and again, if you have a medical issue, if you want to have something to eat or drink, like, let's use some common sense, right? So, there are times you are going to need to drop your mask to do something. But if you want to sit there and just not wear it and everyone else is wear--you--around it, then, you know, unfortunately, we're going to have to review whether we want that person to fly JetBlue again.
Thankfully, that hasn't happened, yet, but you know, the safety of our customers and crewmembers is paramount. This is the new flying etiquette, at least until there's a different solution to this. And we're going to have to accept that wearing a mask is less about protecting ourselves but more about one of our sort of social obligations to protect each another.
MS. SELLERS: There aren't any federal regulations at the moment overseeing cabin cleanliness, ticketing, and that sort of thing. Do you believe there should be?
MR. HAYES: Well, you know, I would say the industry has responded very quickly. And you know, there's a tremendous amount of cooperation that goes on in the U.S. between the airlines and our regulator, the FAA, on all safety matters.
And so, you know, we don't want to wait until regulations, because we don't know how long that's going to take. We don't know if that's ever going to happen. So, we've got to get on and do what we think are the common-sense things. And you know, there are thousands of private companies, stores, shops, hotels, theme parks, all thinking about how they can reopen quickly.
You know, I think it's very hard to regulate to keep middle seats free. I do think where there is a role for regulation is some of the things that we need to think about doing consistently around the world to help people get international travel going again. You know, we're seeing countries as they start thinking, opening their borders, or thinking about different ways of protecting their country. And I do think that could be very confusing if every individual country comes up with their own solution as to how to do that.
MS. SELLERS: Let me ask you, though, about this country. Public health officials have made it very clear in this country that contact tracing, knowing where people have been, knowing where they're flying to, knowing who they've sat with is key to preventing this disease from having a second wave or continuing to spread.
But the airline industry has been in a 15-year, at least, battle lobbying not to produce more information for public health officials. Where do you stand on that? What is the proper role of the airline industry, here?
MR. HAYES: Well, again, I think that, you know, for contact tracing, we have those cases today where we are contacted by the CDC or state officials. And you know, we cooperate and we make sure that we do that quickly.
You know, I think some of the--maybe what you're referring to was two or three months ago, as some of these flights were coming from China, you know, when--at the beginning, everyone thought the virus was coming from China. And then, later, it was--maybe it's been coming from Europe, as well. We're still learning that. You know, there were requests about how can we get that kind of information.
And it wasn't that the airline was resistant, that we didn't really have any--airlines was resistant that we didn't really have any tools that made that easy to do.
MS. SELLERS: Right--
MR. HAYES: And so, as you [audio distortion]--
MS. SELLERS: --going back 15 years--going back 15 years to SARS, there have been questions about how much data the airlines should collect and hand over, I think, and that's come to a head--
MR. HAYES: Yeah, I mean, we have privacy--it really isn't a question about being resistant. It's really making sure that we have the information.
And again, we actually offered as a U.S. airline group, through A4A, which is our trade association, to actually build a contact tracing app that we would all use and could be used.
And again, so, it's not that we're resistant; it's just that we need to make sure that what we do, you know, we have the technology and the tools that make that possible.
MS. SELLERS: Thank you. I have a question from Colorado this time. It's Suzie Campbell [phonetic]--
MR. HAYES: Oh, wow.
MS. SELLERS: --who's asking--yeah--who's asking about--you know, she's hearing what airlines are doing. She asks: "What about airports? What can you tell us about what airports are doing to make that passage through the airport onto the airline safer for passengers?"
MR. HAYES: Well, I think the best news about flying at the moment is there's not very many people doing. And so, airports are naturally very quiet. And so, right now it's actually very easy, I would say, in the vast majority of cases, to socially distance as you go through an airport.
You know, I think the challenge will be, as volumes start picking up again, how do you kind of--you know, maintain that safety. And so, again, some of the responsibility sits with airports, some sits with the airlines. You know, I think you'll see, again, a big push on using mobile technology.
You know, I think you're going to see the seating configurations change in both where, you know, you can get something to eat and drink, and also at the gates to spread people out.
You know, you're going to see, I think, more floor decals to help prompt people to stay six feet apart, as you're sort of getting on an airplane, to make sure you don't all rush at the same time.
And you know, airports have been really good partners in this whole process.
MS. SELLERS: And talking about seating reconfigurations actually onboard planes, I'm curious about how you think they may change. And also, whether, by paying more, for example, going for--you know, a more expensive seat, people are likely to get more secure seats in this age of virus transmission.
MR. HAYES: Yeah, I think, again, the question really be--is what do we think changes over time. And you know, clearly, right now, we are managing a pandemic. We're managing a great deal of valid concern that exists around, you know, people wanting to stay healthy when they fly.
And you know, you can't--look, even if you keep the middle seat free, you can't socially distance from someone else in terms of a six-foot standard. And so, at the end of the day, for true quote/unquote social distancing on an airplane, you're probably going to take an airplane that's got 150 people on it today and at most you're going to get--is 40 to 50. And that's just not viable.
You know, I do think that people's desire for low fares, for all the benefits of travel, they're going to still be there when we come through this. And so, I think the things that you'll see changing are things like the sanitization of the airplanes, making sure it's a healthier environment. All those are good things. But I don't personally think, longer term, you're going to see significant changes to the way seats are configured on an airplane.
You may get more people choosing to buy a spare seat to kind of create that space. You know, some people do that today; I think that may be increased. But we also have to accept it's probably only a small number of people that will be able to afford to do that.
And so, it's what else we can do to make sure people feel really safe when they fly.
MS. SELLERS: Right. And we've all become very good at Zoom. Here we are at the moment talking to each other--and all the other forms, Skype, everything else.
MR. HAYES: Yeah.
MS. SELLERS: Do you think business travel is going to pick up, or are you preparing for a future in which there will be less business travel, and possibly less vacation travel?
MR. HAYES: Well, I think that actually leisure travel will come back very quickly. You know, people are--you know, we weren't wired to sit in our homes and do these lockdowns. We did them because it was an important short-term priority for public health reasons.
But you know, people want to travel. They want to see friends; they want to see family; kids want to get back to college in the fall. And so--and particularly in the domestic U.S., I think a lot of people will maybe forego international trips this year. I've already done that. You know, I normally--I like to go to Europe and see friends and family in the summer and we're going to do it in the U.S. this year. So, I think that traffic will come back quickly.
I think business travel is going to be slower. And I think, again, some of that--there are certain sorts of jobs--you know, you work in sales, a lot of relationship jobs, you want to travel. You've got to travel. You can't really do a lot of that over Zoom. But it also--going to be, I think, some change that may be more permanent.
Now, we are an 80 percent leisure carrier. For the last ten years, we've been trying to make ourselves more dependent on business travel. Now, I'm kind of fairly happy that we're mainly a leisure airline. But you know, business travel will come back, but I think it's going to take longer.
And so, where we are--you know, like, before this happened, we were flying 15 flights a day between Boston and Washington. We're not going to have 15 flights a day for a while, but you know, maybe 4 or 5 or 6. It's just going to be a much lower volume, I think, for business travel for a while.
MS. SELLERS: You've postponed JetBlue's own plans to have flights to London, I think. And where does that stand, and is it affected by London's public health regulations and decisionmaking about what happens?
MR. HAYES: We're still going, can see London right there.
Yeah, we delayed a little bit. You know, it's still our intent to go in 2021. We actually think that the U.S.-to-Europe market will be quite strong in the second half of next year. We think that it's probably going to take about a year for that market to recovery. So, we're still going but it's probably delayed. You know, it's probably delayed a few months in later 2021.
MS. SELLERS: I've got another reader question for you, this one from Washington State, and this is from Jay Carmel [phonetic]. Let me read it to you: "Will JetBlue use this downturn as an opportunity to reduce the average age of its fleet and adopt more fuel-efficient planes?" he asks.
MR. HAYES: Well, that's a great question and the good news is we were already doing that. So, in fact, December this year sees the first arrival of one of our Airbus A-220 airplanes. They are a modern airplane, very fuel-efficient, and we're going to be taking 70 of those over the next few years and those will gradually phase out our A-190 airplanes.
Also, all of our A-320s, we are going through a--what we're calling a cabin restyling. So, we are replacing the interiors, all of those, with new seats, new entertainment systems. So, like, when you get on, it's going to look like new.
And we were actually just over halfway through that process when COVID hit and we kind of--we've put that on pause and, you know, we'll pick that up again once demand suggests we need the airplanes.
But oh, yeah, within a couple years, like, every airplane that we have is going to either look new or be new.
MS. SELLERS: So, last month, revenues were down 95 percent. I think you were--73 percent of flights were less than half full. How is JetBlue faring now, and what do you see in the future?
MR. HAYES: Frances, you had to remind me of that.
MS. SELLERS: Yes.
MR. HAYES: Oh, goodness me. Yes, you know--
MS. SELLERS: Facts, facts, facts. What we do at The Washington Post: facts.
MR. HAYES: Yeah, I know, I know. Yeah, well, look, here we are.
So, the good news is that we've definitely seen a little bit of uptick since then. So, you know, back in the middle of April was the low point and the U.S. industry was seeing about 3 to 4 percent of what they would normally see.
You know, we're back up to about 10 to 11 percent now. I never used to know that TSA used to load their system security numbers on their website at 9:00 every morning which shows how many people flew through U.S. airports the day before. Like, I'm on that thing at 8:40, waiting for it to load. So, you're definitely seeing a little bit of an uptick but, again, nowhere near where we were.
So, you know, when we went into this, we had three main priorities. The first of all, you know, the safety of our crewmembers and our customers, and we've talked a lot about that already today.
Secondly, to reduce cash burn. You know, cash is king in this environment, hear that from probably any organization that is trying to sort of conserve cash. And so, we were very aggressive at pulling down flying into May to reduce that cash burn, knowing that there's--we were in almost a zero-revenue environment.
And thirdly, get ready for the recovery. And so, you know, as we looked at May, we flew about 10 to 15 percent of our normal schedule. In June, we're probably going to be flying around 25 percent of our normal schedule. So, again, you're seeing a small amount of uptick, but it's--you know, there is--we're assuming it's going to be an L-shaped recovery. We're planning conservatively for that, and it's going to be, I think, a significant period of time before revenues are back.
MS. SELLERS: You've had a significant boost, also, from the bailout, the federal bailout, about 935 million, I think, of the 58 billion.
What have you used that money for?
MR. HAYES: Yeah, so--yeah, the money came from the CARES Act. Rounded up, I think it was 936 million, but I should check that.
And you know, we were very grateful to the Trump administration, Secretary Mnuchin, Secretary Chao, members of Congress, especially the--our own Senator Schumer here in New York.
And you know, that really gave the airline industry some time to breathe and some time to make sure that we were here as we went through this pandemic and coming out the other side of it.
I think if it wasn't for the CARES Act--I can't speak for other airlines, but I think that, certainly from a JetBlue perspective, the sensible thing to do would have been just to ground the fleet, furlough the vast majority of our people. We've never furloughed anyone before; that would be hard.
So, all of that money, under federal law, has to go directly to pay our crew members. And so, that's what we're doing with it.
The alternative would have been really--and in fact, when the CARES Act was presented to us, you know, Treasury had said that they had estimated about 70 percent of the money that we were getting through the CARES Act would effectively have had to pay people's unemployment benefit and lost taxation if they had not been--if they had been furloughed. And so, that 70 percent goes directly to the crewmembers instead of that in terms of wages. And about 30 percent--
MS. SELLERS: Have you--sorry to interrupt. Have you furloughed any of your employees since receiving this money? I believe you've been criticized--
MR. HAYES: No.
MS. SELLERS: --by some Democratic Senators for violating--
MR. HAYES: No.
MS. SELLERS: --the spirit of the CARES Act. None have been furloughed?
MR. HAYES: No, no.
MS. SELLERS: Do you continue--do you continue to pay all their health benefits and other benefits?
MR. HAYES: Yeah, yeah, yeah. We haven't furloughed anyone. We have a number of voluntary programs that crewmembers have taken. You know, we do have a lot of crewmembers who wanted to take the period--summer period off. And so, we actually have had over 60--about 60 percent of our crewmembers take some form of unpaid time off, whether it's a day or week or five months, but all those are voluntary programs.
MS. SELLERS: So, this has bought you some time, right? The CARES Act will take you through the summer months. How do you envision employment in October?
MR. HAYES: Well, that's--that's probably the question that I get asked the most at the moment and we are spending a lot of time thinking about that. You know, it's quite clear that when we get to October, demand is not going to recover to where it was. And so, we do believe that we will be a smaller airline than we would want to do. And it's--you know, those are hard conversations to have.
You know, it is our intent that we will try to manage this, if we can, through voluntary means. As I just said, 60 percent of people--of our crewmembers have already taken some kind of voluntary time-off plan for the summer.
So, you know, we're going to see--we're going to see how much interest there is. I think there's going to be substantial interest in continuing that, and then we'll see where we are. And we'll only resort to involuntary furloughs in the 1st of October if we have to.
MS. SELLERS: And are there other strings attached to the CARES Act money that you're having to manage through these critical months?
MR. HAYES: Yeah, I mean, there's a couple, but I think they're both very reasonable.
One, there was some limits on executive comp, which we support. The executive compensation [unclear] if you're taking government money, the last thing you should be doing is paying that out in sort of multimillion-dollar bonuses. So, we were supportive of that.
There is requirement to serve markets. So, if we want to temporarily stop flying somewhere that we would normally have flied [phonetic], we have to get an exemption from the Department of Transportation. So, we've been following that process.
And then, there is restrictions on things like share buybacks and dividends for a period of time, but for one year, if you take the CARES Act payroll support for a period after that.
Again, share buybacks weren't really on the agenda, anyway, because when you go through this, you're burning so much cash your debt starts to really rise. And so, you're going to--we're going to be very focused next two or three years, de-levering and paying off that debt rather than share buybacks.
So, again, all of those restrictions were very reasonable.
MS. SELLERS: So, has the government done enough for the airline industry, in your view?
MR. HAYES: Yeah, I think, actually--I think that--by the way, not just the government, but Congress, because something like this could not have happened with [sic] bipartisan support.
And you know, we focus a lot on the differences these days. I will say that, behind the scenes, I saw people from across the aisle, both Republicans and Democrats, work very hard together to get this CARES Act over the line, and that was not an easy thing to do in such a short space of time.
MS. SELLERS: So, I know you weren't with JetBlue during 9/11, but do you see a swifter or slower recovery for the industry in the wake of this disaster?
MR. HAYES: I think it's going to be a lot worse than 9/11. You know, I think there are two things going on, here.
There's the health issue, where, you know, it's going to take some time. You know, some people are ready to jump on an airplane today; others, they're not going to want to go near an airplane for a significant period of time, at least until they're confident that there's a vaccine or therapeutics or some other way that we've mitigated this. So, we're dealing with that.
And then, we're also dealing with an economic issue, right? So, we'll get through the health issue, but then, you know, how is people's disposable income? What's the unemployment level? All of these have a significant impact on discretionary expenditure and people's ability to vacation and fly.
So, for both of those reasons, I think it's going to be a significant period of time before we see a return to 2019 levels.
MS. SELLERS: Right. And I understand that JetBlue has lost six employees to the coronavirus and that during an earnings call you took a moment to talk about each of them and reflect on them.
What has this crisis meant in terms of your understanding of corporate leadership and your role in the company?
MR. HAYES: Well, I think that culture has always been extremely important to us at JetBlue.
You know, I remember when you--when I first joined JetBlue on my first day, I didn't join in the CEO role, and you go to orientation, which is our training center in Orlando that every crewmember goes through. And you learn about servant leadership and you learn about--you know, it's about setting the right tone and not being--not being unwilling to do anything that you're asking your people to do.
Now, you don't want me flying an airplane or fixing an airplane, but I certainly can do a lot of other things. And so, you know, we've always had that sort of family feel here at JetBlue. And so, the loss of a crewmember is extreme--again, you know, it's six crewmembers lost to COVID, but every bereavement is hard. And the first crewmember we lost, Ralph--I mean, I knew Ralph. And he was not just a hero of mine at JetBlue; he was in our inflight team. You know, he played a major role in 9/11 in the New York Fire Department.
And you know, we--whenever I see that New York Fire Department airplane, I still think of Ralph. And so, everyone has a personal story, but those six people will be, you know, remembered. And we'll figure out, once we're through this, a more permanent way of remembering our six crewmembers that we lost through COVID-19.
MS. SELLERS: Robin, thank you very much for that reflection. And we all feel that way about people we know who've lost to the--we've lost to the virus.
Unfortunately, that's all we have time for this afternoon. I want to thank you very much--
MR. HAYES: You're kidding me. Half hour gone already--
MS. SELLERS: Well, [audio distortion]--that was half-an-hour all gone, so quickly.
MR. HAYES: Wow, wow.
MS. SELLERS: So many interesting answers.
I want to remind our audience to tune into WashingtonPostLive.com to register for future events. We've got some great ones coming up tomorrow.
My colleague, David Ignatius, will be interviewing former British Prime Minister, Gordon Brown, about the impact on the global economy; along with former U.S. Treasury Secretary, Larry Summers. That's tomorrow at 9:00 a.m., Eastern.
And after that, in the afternoon, 1:00, Karen Tumulty, also Washington Post columnist, will be interviewing Senior Advisor to Joe Biden's presidential campaign, that's Symone Sanders.
So, tune in at WashingtonPost.com. Thank you very much for joining us today, and we’ll see you again soon.
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