Bankruptcy watch: JetBlue Airlines ‘operating with borrowed cash’
JetBlue needs to make cuts in order to keep operating.
It’s generally pretty hard to turn around to business by making cuts. Yes, there is always some excess and fat that needs to be cut, but when you start getting rid of service, you simply have less to sell.
You can see this as retailers brag about cutting their inventory. It’s possible they had too much inventory or the wrong items in their warehouses, but you need merchandise to sell.
Related: Southwest Airlines sets date for new charges, changed policies
As Sears has been slowly dying, the chain had less and less to sell in its stores. That does cut expenses, but it also eliminates revenue opportunities.
When an airline struggles, there are certain things it cannot cut. Airlines have a lot of fixed costs and you can’t, say, do less maintenance on your planes or use fewer pilots to save money.
Generally, you can trim some executives, and maybe cut some other minor costs, but then you have to start cutting routes.
