JetBlue Airways has reported disappointing but unsurprising results for the third quarter of 2023. The low cost carrier posted a net loss of $153 million or $(0.46) per share, which was a loss of $129 million or $(0.39) per share on an adjusted basis.
“While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service.” said Robin Hayes, JetBlue’s Chief Executive Officer. “As we look ahead, we are making improvements to drive profitable growth and ensure JetBlue is positioned for success in 2024 and beyond.”
JetBlue increased its third quarter system capacity 7.1% year-over-year, and booked operating revenue of $2.4 billion for the third quarter of 2023, down 8.2% year-over-year.
The airline reduced its operating expenses per available seat mile (CASM) for the third quarter of 2023 by 3.3% year-over-year, but excluding fuel and related taxes, other non-airline operating expenses, and special items (CASM ex-Fuel) increased by 5.9% year-over-year.
JetBlue’s average fuel price in the third quarter of 2023 was $2.94 per gallon, including hedges.
JetBlue notes that it is continuing to realize savings under the structural cost program, which remains on track to deliver approximately $70 million in cost savings this year and $150 million to $200 million in run-rate savings through 2024.
The airline is pressing ahead with its fleet renewal and has removed 18 Embraer E190s from service as it transitions to the “margin accretive Airbus A220s, which is expected to generate $55 million in cost savings by the end of this year and $75 million in cost savings through 2024” said JetBlue.
The airline has $1.5 billion in unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities at quarter-end (excluding its $600 million undrawn revolving credit facility). The company extended the maturity date of the undrawn revolving credit facility to October 21, 2025.
JetBlue’s adjusted debt to capital ratio was 55% as of September 30, 2023 and the airline paid $254 million in debt and finance lease obligations during 2023.
“We continue to see healthy travel demand during peak periods and the fourth quarter holidays. However, industry capacity is outpacing domestic demand during off peak travel periods. For the fourth quarter, our growth will be driven primarily by international as we proactively work to manage our capacity and reduce schedules in off-peak periods,” said Joanna Geraghty, JetBlue’s President and Chief Operating Officer.
JetBlue is predicting lower capacity for the fourth quarter and full year of between 0.5-3.5% and 5-7% respectively. Revenue is estimated to be a loss of between 6.5% to 10.5% for the final quarter and between 3-5% for the full year. Analysts are not hopeful of a more positive trajectory through 2024 and 2025 as it moves to secure the merger with Spirit with the court case with the DOJ scheduled to begin shortly.
“While we have been able to offset some of the costs associated with the challenging operational backdrop, the sheer magnitude of the air traffic control and weather-related delays has been staggering. We remain focused on controlling what we can control, including our structural cost program and fleet modernization plans,” said Ursula Hurley, JetBlue’s Chief Financial Officer.