JetBlue raised its third quarter revenue guidance on September 5, 2024. Strong summer bookings coupled with the IT outages impeding on its competitors' operations had driven the stronger revenues. Current guidance expects revenues to be between a negative 2.5% to a positive 1%, when compared to the third quarter last year. ""JetBlue's revenue performance quarter-to-date was benefited by several factors, including improving in-month bookings, particularly in the Latin region, and continued progress from its previously announced $300 million worth of revenue initiatives,"" the airline read in a stock filing. It seems JetBlue lucked out on its technology with it noting that revenue uplift from ""re-accommodation of customers"" impacted by its customers' flight cancellations as a result of the IT outage. The CrowdStrike IT outage had wreaked havoc on airline operations in July with airlines such as Delta expecting its third quarter revenues to be impacted to the tune of $380 million. The airline is seeking to recover a total of $500 million in damages from the cybersecurity company and Microsoft. The issue stemmed from a “defect found in a single content update for Windows hosts,” said CrowdStrike CEO and president George Kurtz. The airline's capacity guidance for the quarter was revised to a negative 3-5%. Previous estimations stated capacity to be down 3-6% compared to third quarter 2023. With moderating fuel prices since the start of the third quarter, JetBlue's revised its fuel price per gallon down to around $2.70-2.80. Previous estimations were around $2.82-2.97 per gallon. In addition, cost per available seat mile (CASM) excluding fuel, is expected to be up 5-7% over third quarter 2023. Previously, it had been 6-8%. The airline said the improvement was driven by ""focussed efforts on cost control and operational reliability"" though partially offset by weather-related disruption costs in August. In August, JetBlue priced its $2bn 9.875% senior secured notes due 2031 and $765 million senior secured Term Loan B due 2029, offered through its loyalty programme TrueBlue. As a result, its full year interest expense is now in the range of $370 million to $380 million for the full year, as compared to a previous management assumption of $320 to $330 million. Along with its revised guidance, JetBlue said it is ""acting with urgency to address headwinds"". Its business and cost transformation programme is aiming to save around $175 million through data-science driven optimisation; enterprise efficiency and automation; and labour productivity and infrastructure strategy. This strategy will sustain its low-cost model and be able to provide competitively lower prices compared to its competition. With grounded aircraft due to Pratt & Whitney engine issues impeding its growth, the airline deferred 44 A321neo aircraft from 2025-2029 to 2030 and beyond, it announced in July. This is expected to save a total of around $3bn in capital expenditures. The airline extended leases on, or purchased off lease, 12 aircraft to drive ""capital light growth"" and plans for around 30 in total. With JetBlue's remaining E190s expected to exit its fleet by next year, it said it will benefit from simplifying to two fleets: the A220 and A320 family aircraft. In addition, the airline is prioritising A220 deliveries, which will have more premium seats and lower unit costs in comparison to the E190s. With various initiatives being announced - or soon to be - and implemented, the airline is targeting $800-900 million in incremental EBIT from 2025 through 2027.
JetBlue raises third quarter revenue guidance
