JetBlue Swings to Loss as Fuel Costs Climb
Second-quarter revenue rose 14.5% to $2.697 billion as fares and passenger traffic increased.
{"text": "JetBlue Airways (JBLU) swung to a $247 million second-quarter net loss, or $0.66 a share, as higher fuel costs outweighed stronger demand. The company had lost $74 million, or $0.21 a share, a year earlier.\n\nThe quarter extended a revenue recovery that began after a fourth-quarter decline. Revenue growth accelerated from 4.7% in the first quarter, while revenue per available seat mile rose 10.9%, marking a third consecutive quarter of faster growth.\n\nPassenger volume increased 5.1%, and the average fare rose 8.6% to $237.38. Capacity expanded 3.2% after contracting in each of the previous two quarters, while load factor improved 0.8 percentage point to 82.7%.\n\nPremium revenue per available seat mile grew about 13%, compared with 11% for Main Cabin. Fort Lauderdale RASM increased 11% even as capacity there grew nearly 40%, and loyalty revenue rose 13%.\n\nFuel costs absorbed much of those gains. JetBlue's average fuel cost climbed 76.3% to $4.23 a gallon, pushing operating expense up 20.8% and producing a $141 million operating loss, compared with $6 million of operating income a year earlier. The operating margin fell 5.5 percentage points to negative 5.2%.\n\nJetBlue recaptured nearly half of the higher fuel expense, exceeding its earlier expectation of 30% to 40%. Cost per available seat mile excluding fuel rose 2.4%, easing from 6.6% growth in the first quarter, when operational disruptions added roughly four percentage points of pressure.\n\nThe company restored full-year guidance and expects capacity to grow 1.5% to 3.5%, RASM to increase 10% to 12.5% and adjusted operating margin to range from negative 2% to negative 5%. It also expects second-half operating margin to improve about 3.5 percentage points from a year earlier.\n\nJetBlue maintained its target for JetForward to deliver $850 million to $950 million in annual benefits by the end of 2027 and projected about $1.2 billion for 2028. The company also set a target of at least $1.00 in earnings a share for 2028, assuming continued demand strength and jet fuel averaging $3.00 a gallon, while its BlueFirst domestic first-class product is scheduled to go on sale in the fall."}