jet blue airlines Although the company reported an even bigger year-over-year loss in the third quarter, the New York airline sought to calm investors after its stock hit a new low on Monday, saying strong travel demand was helping offset higher fuel prices.
JetBlue shares rose nearly 19% in early trading Tuesday.
JetBlue on Monday reported a net loss of $257 million for the three months ended Sept. 30, compared with a loss of $143 million a year earlier. Airlines’ fuel costs rose 61% to $868 million.
Chief Executive Officer Joanna Geraghty said in a statement: “Returning demand and high yields resulted in earnings that significantly exceeded our initial expectations, and we were able to recover more of the increase in fuel costs than we initially expected.” “That momentum carried over into the fourth quarter, with Fort Lauderdale continuing to outperform even as we significantly expanded our production capacity.”
JetBlue’s average fare increased more than 19% to $245.11 in the third quarter from $205.67 a year earlier.
JetBlue executives are scheduled to hold an earnings conference Tuesday at 10 a.m. ET, where they will take questions from analysts about the company’s long-term health amid continued losses. A group of the airline’s senior creditors is reportedly working with restructuring advisers PJT partnerThe Wall Street Journal reported on Friday.
The airline said revenue per empty seat mile – a key metric that measures how much operating revenue an airline generates for each seat flown one mile – is expected to increase by as much as 22% in the fourth quarter, with annual growth rates of 13.5% to 14.5%.
The company said it ended the second quarter with $2.2 billion in liquidity and now has an unencumbered asset base of $7 billion, including $2.8 billion in aircraft and engines.
JetBlue Airways said in its earnings report Monday that it had total debt of $8.4 billion as of Sept. 30.
“Importantly, we believe we have the liquidity and financing options that provide a strong bridge to achieving at least $1 of EPS and positive free cash flow in 2028,” Chief Financial Officer Ursula Hurley said in a statement. “We remain focused on disciplined cost execution and capital management with the goal of sustainable profitability and positive free cash flow.”
Below is a comparison of what JetBlue reported for the third quarter and Wall Street estimates compiled by LSEG.
Loss per share: 60 cents adjusted, 55 cents expected Lost earnings: $2.81 billion vs. $2.82 billion expected
JetBlue Airways last reported an annual profit in 2019. The airline is in the midst of a multi-year turnaround plan that includes cutting headcount and increasing profits by investing in premium seats, such as the recently launched domestic first class.
Fuel costs are eating into airline profits across the board. JetBlue said travel demand remains strong despite fares rising more than 20% this year.
JetBlue has struggled not only with high costs but also with competition from larger rivals.
The company sought to acquire the now-defunct airline Spirit Airlines, but the deal was overturned by a federal judge who ruled it was anticompetitive. The judge also blocked the airline’s regional partnership with JetBlue. american airlinesThe airline argued this would help it become more competitive with carriers in the congested northeastern United States. JetBlue is currently united airlines.
