JetBlue Q1 Net Income Drops 59 Percent

JetBlue Airways posted net income of USD$85 million for the first quarter as operating expenses, especially fuel costs, rose.

The Q1 net profit was a 58.8 percent drop from 1Q16’s $207 million net. Operating income was down by a similar percentage to $147 million from $349 million. Revenue dipped 0.8 percent to $1.6 billion.

Operating expenses rose 15 percent during the quarter as fuel costs jumped 50 percent, with the fuel price reaching $1.69 per gallon. JetBlue has hedged around 10 percent of its fuel consumption for the rest of 2017, and expects Q2 fuel to cost $1.73 a gallon on average after hedging is factored in.

During the quarter to end March, the airline carried 9.71 million passengers, up 6.5 percent from the previous year.

Passenger traffic on an RPM (revenue passenger miles} basis rose 3.9 percent on an ASM (available seat miles) capacity increase of 4.2 percent. The resulting load factor was down 0.3 percentage points at 83.9 percent.

Yield per passenger mile was 5.5 percent down on the first quarter of 2016, as passenger revenue per available seat mile (PRASM) fell 5.8 percent.

Looking forward, the New York-based carrier said it expects to increase capacity by between 4 and 6 percent in the second quarter, and between 5.5 and 7.5 percent for the full year.

JetBlue said it was continuing to look at its cost structure and will defer delivery of 13 Airbus aircraft due in 2019 and 2020. An order for 11 Airbus A321neos, scheduled for delivery in 2018 has also been changed, as it swaps them for the older A321ceo model.