A JetBlue Airways Corp. plane prepares for landing at LaGuardia Airport in Recent York, U.S., on Tuesday, April 18, 2017.
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JetBlue Airways eked out a $57 million profit for the third quarter as strong travel demand and better fares helped the carrier cover dearer fuel and other costs.
The Recent York-based airline’s revenue rose 30% through the quarter from the identical period last 12 months to $2.56 billion, in step with analysts’ estimates. JetBlue’s operating margin narrowed to five.4% from 9.4% a 12 months earlier after expenses rose nearly 36% from the identical period of 2021.
JetBlue’s CEO, Robin Hayes, said the carrier expects “one other solid quarter of mid-single-digit pre-tax margins within the fourth quarter, and we’ll look to expand on that further in 2023 as we proceed to revive our earnings power.”
Here’s how JetBlue performed within the third quarter, compared with Wall Street expectations in keeping with Refinitiv consensus estimates:
- Adjusted earnings per share: 21 cents vs. an expected 23 cents.
- Total revenue: $2.56 billion vs. an expected $2.56 billion.
JetBlue’s shares were down greater than 5% in morning trading Tuesday after releasing the outcomes.
“While the revenue outlook is robust, now we have to proceed to be thoughtful about every penny we spend, particularly in today’s environment, since our entire business model of competing with lower fares is predicated on having lower costs relative to the legacy airlines,” JetBlue’s CFO, Ursula Hurley, wrote in a note to employees, which was reviewed by CNBC.
Hurley said despite the quarterly results, the airline won’t post a full-year profit in 2022 “after the bumps we faced in the primary half of the 12 months with the Omicron variant and operational challenges.”
Larger U.S. carriers have been upbeat about travel demand and largely outperformed analysts’ expectations on resilient bookings, particularly on the return of international trips.
Airline executives say they’re limited in how much capability they will add due to shortfalls in aircraft and pilots, which helps keep fares high. Airlines have also held back on adding flights after a number of costly operational meltdowns prompted them so as to add more slack within the system.
JetBlue said it plans to expand flying 1% to 4% within the fourth quarter compared with 2019 levels. Airlines are comparing capability levels with those of three years ago to indicate their recovery from the Covid pandemic.
“Given the continued fragile aviation ecosystem, we’re taking a cautious approach to operational investments and more conservative planning assumptions that we put in place for the summer,” CFO Hurley said within the earnings release.
The airline forecast fourth-quarter unit costs, excluding fuel, to be up as much as 10.5% from three years ago. It expects unit revenues to rise as much as 19%. Unit revenues within the third quarter were up greater than 23% from three years earlier.
Hurley said the airline has hedged about 27% of its fourth-quarter fuel consumption.
JetBlue executives will discuss results on a ten a.m. ET call on Tuesday, after they are prone to face questions on the airline’s planned acquisition of budget airline Spirit. Spirit’s shareholders last week overwhelmingly voted in favor of the $3.8 billion takeover, which now faces a high hurdle with federal regulators.
