Hurricanes, Costs Hit JetBlue’s Third Quarter

October 24, 2017

JetBlue Airways reported a 10.2 percent fall in third quarter net profit to USD$179 million as two hurricanes dented revenue and operating costs rose.

The New York-based airline’s operating revenues increased 4.7 percent to $1.81 billion, but expenses rose by 9.1 percent to $1.5 billion on higher staff and fuel costs. Operating profit fell as a result to $310 million, down 12.4 percent from 3Q16’s $354 million.

Fuel costs jumped 18.3 percent in the quarter to $347 million as JetBlue paid $1.69 per gallon, a 14.6 percent increase on the previous year. Staff costs of $466 million were up 10.9 percent.

In the quarter to end September JetBlue carried 10.2 million passengers, a 2.8 percent increase, with RPM (revenue passenger miles) traffic improving by 2.3 percent. Available seat miles (ASM) capacity rose 3.7 percent, leading to a 1.2 percentage point drop in load factor to 85.1 percent.

Cost per available seat mile (CASM) increased 5.2 percent in the quarter to 10.50 cents, but revenue per available seat mile (RASM) increased by only 0.9 percent to 12.67 cents.

Looking forward, JetBlue expects to increase capacity by between 4.5 and 5.5 percent in the fourth quarter, and by 4.0 - 5.0 percent for the full year. RASM growth is expected in the range of flat to down 3.0 percent.

On costs, CASM excluding fuel is expected to grow between 5.0 and 7.0 percent as weather related costs continue to weigh on the fourth quarter. Full year CASM is expected to rise by between 4.0 and 5.0 percent.

“Despite unprecedented ATC challenges, repeated hurricane events, and a competitive industry pricing environment, we’ve been able to sustain solid margins, make progress towards our long-term margin commitments and return capital to our shareholders,” JetBlue chief financial officer Steve Priest said.

(Airwise)