JetBlue Airways swung to a loss within the fourth quarter and forecast lower capability this 12 months because it scrambles to return to profitability.
The airline expects revenue to drop between 5% and 9% in the primary three months of the 12 months, greater than the 5.5% decline Wall Street analysts were predicting. Capability in the primary quarter can be down as much as 6%, the airline said.
JetBlue said it expects 2024 capability to be down within the low single digits and that its adjusted margins could approach breakeven. Its shares were down about 5% in morning trading.
In an investor presentation, JetBlue said it has seven Airbus jets out of service for engine inspections stemming from a production problem at manufacturer Pratt & Whitney. It said that number could rise to as much as 15 by the top of the 12 months.
The airline has been grappling with higher costs, operational challenges and changing travel patterns, just as a federal judge earlier this month barred its plan to amass Spirit Airlines for $3.8 billion. JetBlue warned last week the agreement with Spirit could possibly be terminated, nevertheless it didn’t provide further detail on Tuesday. JetBlue can be offering buyouts to some salaried employees to chop costs.
The Recent York-based carrier said Tuesday it plans to defer $2.5 billion in spending on recent aircraft until the top of the last decade. Joanna Geraghty, JetBlue’s COO and incoming chief executive, declined to say on the decision whether Airbus provided JetBlue incentives to defer aircraft as other carriers scramble for brand new jets. Reuters reported earlier this week that United Airlines is in search of Airbus A321neo planes, which JetBlue also has on order, after expressing frustration about production problems at Boeing.
Geraghty, nevertheless, said on the earnings call: “I do imagine that this was a win-win for each [Airbus] and ourselves over the subsequent few years.”
Here’s what JetBlue reported for the fourth quarter, compared with Wall Street expectations complied by LSEG, formerly often known as Refinitiv:
- Adjusted loss per share: 19 cents vs. 28 cents expected
- Revenue: $2.33 billion vs. $2.29 billion expected
The Recent York-based airline reported a net lack of $104 million for the last three months of 2023, compared with a $24 million profit a 12 months earlier. On a per-share basis, JetBlue lost 31 cents in the course of the fourth quarter, or 19 cents on an adjusted basis, compared with a 7-cent profit in the course of the year-earlier period.
Revenue for the fourth quarter was down 3.7% 12 months over 12 months, though still barely ahead of Wall Street estimates.
JetBlue has been tweaking its network to deal with more profitable flights. CNBC reported JetBlue’s planned flight cuts earlier this month.
“Demand during peak periods stays strong, and we proceed to administer our capability during off-peak periods to reflect evolving demand trends,” said Geraghty said within the earnings release. “We plan to proceed to refine our network and product offering to higher serve our leisure customers while diversifying revenues with margin-accretive initiatives.”
Other airlines including Southwest have also slowed their growth or refined their networks to avoid overcapacity — and low fares — during off-peak periods, while discounting less popular flights.
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