JetBlue Airways reported a wider third-quarter loss compared to last year, but the New York airline said strong travel demand was helping to offset rising fuel prices as it seeks to calm investors after shares fell to a new low on Monday.
JetBlue stock rose about 11% in after-hours trading Monday.
JetBlue on Monday reported a net loss of $257 million for the quarter ended September 30, compared with a loss of $143 million a year earlier. The carrier’s fuel bill increased 61% to $868 million.
“Resilient demand and strong yields delivered revenue well above our initial expectations, allowing us to recover a greater share of increased fuel costs than we had initially anticipated,” CEO Joanna Geraghty said in an earnings release. “This momentum has continued into the fourth quarter, and Fort Lauderdale continues to generate exceptional results even as we significantly increase our capacity.”
JetBlue’s average fares rose more than 19% to $245.11 in the third quarter, up from $205.67 a year earlier.
JetBlue executives are scheduled to hold an earnings conference call Tuesday at 10 a.m. ET, during which they will face questions from analysts about the long-term health of the company amid sustained losses. Group of airline’s senior creditors reportedly working with restructuring advisor PJT PartnersThe Wall Street Journal reported Friday.
The carrier said it ended the quarter with $2.2 billion in liquidity and its unencumbered asset base now stands at $7 billion, including $2.8 billion in aircraft and engines.
JetBlue had total debt of $8.4 billion as of Sept. 30, the carrier said Monday in its earnings report.
“More importantly, we believe we have the liquidity and financing options necessary to create a strong link to at least $1 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 while working toward sustained profitability and positive free cash flow.”
Here’s what JetBlue reported in the third quarter compared to Wall Street estimates compiled by LSEG:
- Loss per share: 60 cents adjusted against an expected loss of 55 cents
- Income: $2.81 billion versus $2.82 billion expected
JetBlue last posted an annual profit in 2019. The airline is in the midst of a multi-year turnaround plan that includes cuts and increasing revenue by investing in premium seats, such as a new first-class domestic section that recently went on sale.
Fuel costs have eaten into airline profits across the board. JetBlue said travel demand has remained strong despite rising fares, which are up more than 20% this year.
JetBlue faced not only higher costs, but also competition from larger rivals.
It sought to acquire the now-defunct Spirit Airlines, but that deal was struck down by a federal judge who deemed it anticompetitive. A judge also blocked a regional partnership between JetBlue and American airlineswhich airlines say would help them better compete with carriers in the congested northeastern United States. JetBlue now has a partnership with United Airlines.
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