JetBlue Trims Losses, Sees Better Times Ahead

On its quarterly earnings call on April 25, JetBlue Airways reported a $192 million loss for the first quarter of 2023—an improvement over the net loss of $255 million it posted in the same quarter last year.

The airline beat the estimates on revenue, which rose 34 percent in the first quarter to $2.33 billion vs. the $2.32 billion which had been projected. At the same time, expenses jumped more than 22 percent to $2.57 billion. Fuel costs alone were up 34 percent from the same period in 2022.

Despite the first-quarter loss, airline executives told analysts the carrier expects a profitable Q2 on the back of robust travel demand.

Photo: Courtesy of JetBlue

The second quarter historically marks the start of the peak travel season, and the airline is projecting earnings per share of 35 cents to 45 cents, with revenue up 4.5 percent to 8.5 percent year over year.

“Turning to the second quarter, we do expect strong revenue growth to continue as demand remains robust,” CEO Robin Hayes told analysts. “We remain well on track in executing our comprehensive plan to enhance long-term profitability and restore our historical earnings power.”

Nevertheless, current challenges will likely affect the airline’s second-quarter results. This includes the recent flooding in Florida, which forced the closure of Fort Lauderdale Airport, prompting the carrier to factor in a half-point impact on revenue.

JetBlue has also joined other carriers in announcing cuts to its summer schedules in response to air traffic control staffing shortages. The FAA anticipates a 45 percent increase in flight delays at East Coast airports in the summer of 2023 and asked airlines to collaborate with the agency to reduce flights.

JetBlue Terminal 5 at John F Kennedy International Airport in New York / Photo: Leonard Zhukovsky/Shutterstock

Last month, JetBlue announced it would join other major carriers to trim summer schedules, reducing its New York services by 10 percent. On the call, executives said the cuts could further impact the carrier’s bottom line since nearly 60 percent of JetBlue flights operate in and out of the New York area daily.

“With our large footprint in the Northeast, JetBlue is disproportionately exposed to these challenges,” according to president and COO Joanna Geraghty. “The FAA has said that delays are expected to vastly increase year-over-year. So we are focused on what we can control.”

Despite the scaled-back schedule, Geraghty said the airline projects capacity in the second quarter to be up 4.5 percent to 7.5 percent over the year prior. And the carrier reiterated its guidance that, for the full year 2023, capacity would be up 5.5 percent to 8.5 percent.

“As we’ve demonstrated in the past few years, we will maintain a nimble approach with capacity should conditions change,” Geraghty said.

During the call, Hayes addressed the pending Justice Department antitrust suit to block JetBlue’s merger with low-cost rival Spirit Airlines.

Illustration: Courtesy of JetBlue Airways

Spirit shareholders had approved the $3.8 billion deal in October. However, in March, Attorney General Merrick Garland, citing the potential to “eliminate Spirit’s unique and disruptive role in the industry,” filed suit to stop the deal.

“It’s disappointing, though not surprising, that the Department of Justice is trying to block this transaction,” Hayes told analysts. “However, these actions do not change our conviction in the merits of this transaction. We are confident in the procompetitive merits of the transaction, and we look forward to demonstrating that in court this fall.”