JetBlue Airways has reported a pre-tax loss of $160 million, inclusive of a $319 million E190 asset impairment charge. Excluding this charge, adjusted pre-tax income of $159 million, a decrease of 51.1% from the second quarter of 2017. The diluted loss per share of $0.38, inclusive of $319 million pre-tax impairment charge on E190 assets. Excluding this charge, adjusted diluted earnings per share of $0.38. This compares to JetBlue’s second quarter 2017 diluted earnings per share of $0.62.
Second quarter 2018 revenue per available seat mile (RASM) decreased by 1.2%, year over year, including 2.5 points of negative impact from holiday travel that shifted into the first quarter, as well as lapping a 1.25 point benefit that occurred in second quarter of 2017 from completion factor and co-brand incentive payments.
Operating expenses per available seat mile, excluding fuel (CASM ex-fuel) growth of 1.9%, slightly better than the initial guidance range of 2.0% to 4.0%, partially driven by the timing of expenses from the second into the third quarter of 2018 and higher completion factor.
JetBlue announced a signed MOU for the purchase of 60 A220 aircraft, starting in 2020 through 2025 and a transition plan for its current E190 fleet. The transaction is expected to mitigate costs increases into the next decade, strengthen JetBlue’s network strategy and offer Customers and Crewmembers with a state-of-the art product experience.
Capacity is expected to increase between 7.5% and 9.5% year over year in the third quarter 2018. For the full year 2018, JetBlue expects capacity to increase between 6.5% and 7.5%, including a 2 point reduction to capacity in the fourth quarter of 2018.
RASM growth is expected to range between flat and 3.0% for the third quarter 2018 compared to the same period in 2017.
CASM Ex-Fuel is expected to grow between 1.0% and 3.0% for the third quarter of 2018. For the full year 2018, JetBlue expects year over year CASM Ex-Fuel to be between (1.0)% and 1.0%. CASM Ex-Fuel guidance includes accelerated depreciation of approximately $0.4 million per quarter for the balance of 2018, related to the E190 asset impairment.