American low-cost carrier JetBlue Airways Corp. (JBLU) said it is canceling about 1,280 flights from December 30 to January 13, 2022, due to the increase in Omicron cases amongst staff and bad weather in certain parts of the country, according to CNBC. Following the news, shares closed down almost 1% at $14.24 on December 30.
Since Christmas eve last Friday, air carriers have canceled thousands of flights, both domestic and international, due to rising Omicron cases and heavy snowfall.
Yesterday, JetBlue said that it is canceling 1,280 flights through mid-January as the airline faces staff shortages. Many workers and flight attendants have caught the virus and are calling in sick, making it difficult to cancel/reschedule flights at short notice. JetBlue said that the planned cancellations will allow the airline to manage its workforce, and more importantly, avoid inconvenience to passengers.
The travel industry, which had just picked up the pace, has hit a roadblock again with the growing concerns over the Omicron variant. According to data from FlightAware, carriers have canceled more than 8,000 flights since Christmas eve.
On Thursday, more than 1,100 flights were canceled with JetBlue canceling 17% of its flight schedule. According to JetBlue, the planned flight cuts through mid-January represent less than 10% of the carrier’s daily schedule.
After repeated requests from carriers, the Centers for Disease Control and Prevention (CDC) reduced the isolation period for asymptomatic infected people to 5 days from 10 days. This comes as a relief to carriers as they can expect the crew and workers to resume work faster and ease the pressure of staff shortages.
JetBlue CEO Robin Hayes said, “The worst type of cancellation as we all know is that cancellation that happens at the airport.”
JetBlue department leaders wrote in a staff note, “This past week has been one of our most difficult operating periods during the pandemic… The exponential growth in Omicron cases over just a couple of days is at a level that no one could reasonably prepare for.”
The Department heads are happy with the new CDC guidelines and added, “We know that Omicron cases have yet to peak in the Northeast (and won’t for at least another week or two) where the vast majority of our Crewmembers are based.”
Wall Street’s View
JetBlue stock has a Moderate Buy consensus rating based on 4 Buys, 3 Holds, and 1 Sell. The average JetBlue price target of $18.79 implies 32% upside potential to current levels. Shares have lost 2.1% over the past year.
TipRanks data shows that financial blogger opinions are 85% Bullish on JBLU, compared to a sector average of 68%.