After strong holiday demand, JetBlue updated its fourth quarter and full year guidance on December 4, 2024.
“Booking performance for travel in November and December was higher than expectations immediately following the US presidential election and as a result, the fourth quarter revenue headwind from the election is now estimated to be 0.5 points compared to the previous forecast of one point,” JetBlue read in its update.
The US carrier said Thanksgiving week also resulted in “better revenue performance” during the peak season. December in-quarter bookings have also exceeded expectations for both peak and off-peak travel.
Fourth quarter revenue is expected to be down 2-5% compared to the same period last year. It is a marked improvement over previous estimates of previous estimates, which forecast revenues to be down 3-7% in the quarter. Full year revenue is expected to be down 3.5-4.5%, previously forecast to be down 4-5%.
“JetBlue's 2024 revenue initiatives are expected to exceed $300 million of cumulative benefit in the fourth quarter, supported by preferred seating, the Blue Basic carry-on baggage policy change, and other initiatives,” the airline added. The new baggage policy affords Blue Basic customers one free carry-on bag and one personal item as opposed to the previous policy that required customers to purchase a carry-on bag or a different fare option.
TD Cowen analysts Tom Fitzgerald and Helane Becker said the airline is benefiting from technology investments that improve its decision-making capabilities. The airline, for example, can be more proactive in cancelling flights, which can save on provisions and accommodation expenses for customers.
“We have been impressed with JetBlue's execution throughout 2024 and the momentum in the business in recent months, but there is still too much uncertainty for us to become bullish,” the analysts added.
In addition, capacity outlook has improved in the fourth quarter, estimated to be down around 4.5-6.5% - previously set to be down 4-7%. Full year capacity outlook was shifted to be down 3.5-4.5% - previously guided down 4-5%.
The company estimates cost per available seat mile (CASM) excluding fuel to be up 12.5-14.5% in the fourth quarter 2024, compared to the same period last year. Previous estimates had expected it to be up 13-15%. Full year CASM ex-fuel is set to be up 7-7.5%, previously estimating it to be up 7-8%. Fuel price per gallon is estimated to be $2.40-$2.50 in the quarter, down from previous estimates of $2.50-$2.65. Full year fuel costs are expected to be $2.73-$2.76 per gallon - down from previous forecast of $2.75-$2.80 per gallon.
The company said these improvements were driven by cost benefits as a result of “more reliable and on-time operation”.