JetBlue posts $716 million net loss for first quarter 2024

JetBlue has recorded a $716 million net loss in its first quarter 2024 results, down further from its first quarter 2023 net loss of $192 million. Its first quarter operating revenues were down 5.1% in the first quarter of the year to $2.2bn while total operating expenses were up 14% to $2.9bn compared to the first quarter of 2023. Its special items expenses, which includes costs related to the failed Spirit merger, had increased from $112 million to $562 million year-on-year (YoY). In an earnings call, JetBlue chief financial officer Ursula Hurley commented: ""All of the Spirit costs are behind us"". Passenger revenue for the first quarter was down 5.8% from $2.18bn in the first quarter of 2023 to $2.05bn in the first quarter of 2024. Additionally, its loss per common share (basic and diluted) were at $2.11; its loss per share in the same period a year prior had been 58 cents. “We've begun rolling out the initial components of our refocused plan,” said JetBlue president Marty St. George. “In the first quarter, we announced a number of significant network changes, which are designed to free up unprofitable flying and reallocate it to proven leisure markets where JetBlue has historically won.” Management in the earnings call addressed some concerns regarding its liquidity. Its total debt was at $5bn as of March 31, 2024, up from the recorded $4.7bn at the year’s end of 2023. Both cash and cash equivalents were at $1.2bn and total investment securities were at $471 million as of March 31, 2024, totalling over $1.7bn in liquidity. Additionally, it has $10bn in unencumbered assets. Management had said that no significant debt was due before 2026. Hurley noted that the company's primary goal was to return to profitability to generate free cash flow and reduce its debt. Revenue passenger miles (RPMs) were at 13bn in the first quarter of the year, down 2.8% from 13.4bn in the same period a year prior. Available seat miles (ASMs) were down 2.7% YoY to 16.3bn. ""Aside from elevated capacity in the Latin region expecting to impact our revenue performance as we move from Q1 to Q2,” added George, “the remainder of our network is steadily improving, and we look forward to launching additional revenue initiatives to support our revenue performance in the back half of the year.” “We took a more granular look at our fixed costs, and implemented several cost reductions across our business,” said Hurley. “In addition, our structural cost program and fleet modernisation are on-track to deliver around $275 million in cumulative savings this year.” Its second quarter 2024 guidance estimates its YoY revenue to be down between 10.5% and 6.5% along with its ASMs to be down between 5% and 2%. The full year 2024 guidance estimates both figures to be down in low single digits. JetBlue estimates its capital expenditure for the second quarter to be approximately $550 million and its full year to be around $1.6bn. Hurley added: “As we look forward, we'll remain nimble in responding to the unique and dynamic challenges we face in our industry, while executing on our refocused strategy to generate earnings again.” In an earnings call, Hurley said that as its fleet transitions from E190s to A220s, it expects $100 million in savings from maintenance through to the end of the year with $70 million savings already realised. It is up from its $75 million saving goal it had forecasted for the year. The airline's expects seven A321neo and 20 A220 aircraft to be delivered by the end of the year. The airline had scaled back its routes and exited cities entirely, particularly in the LATAM region after the failed merger with Spirit Airlines. George said that proven geographies such as the northeast area of Florida will be ""key to our success as we rebalance the network."" With the competitive capacity increasing in the LATAM region, the airline noted that it would impact its business in the subsequent quarter. The region had represented 35% of the airline's capacity. Hurley noted that the LATAM market is ""the big challenge"" facing JetBlue but believes it to be ""transitory"" and will ""cycle out."" Hurley added: ""We continue to opportunistically look at hedging as a means to manage risk, particularly in a market that continues to increase in volatility as a result of geopolitical concerns in the Middle East."" She added that the airline has hedged around 27% of its expected fuel consumption for the second quarter of the year and around 16% for the fuel year. As of 15:45 BST, JetBlue’s shares were down nearly 18%.