JetBlue Airways has reported a 76% decline in revenue for the third quarter to $492 million, with a pre-tax loss of $578 million compared to a pre-tax income of $254 million in the third quarter of 2019. The airline had been expecting a decline of 80% but benefitted slightly from improving leisure and visiting friends and relatives (VFR) travel trends throughout the quarter.
JetBlue’s third quarter 2020 capacity was down by 58% year over year compared to an initial planning assumption of a decrease of at least 45%, as a result of actions taken to manage cash burn and protect liquidity. Operating expenses declined 45% year over year.
JetBlue ended the third quarter with approximately $3.1 billion in unrestricted cash, cash equivalents, and short-term investments, and restricted cash for CARES Act Payroll Support Program (PSP), or 38% of 2019 revenue.
JetBlue stated that it repaid $95 million in regularly scheduled debt and finance lease obligations during the third quarter of 2020.
In the third quarter the US Treasury updated the amount of the CARES Act Loan Program facility to $1.95 billion, and allocated JetBlue an additional amount of $27 million related to the original PSP allocation of $936 million.
During the quarter, JetBlue refinanced the $1 billion 364-day term loan maturing in early 2021 with a EETC; closed $300 million in sale-leaseback transactions for new aircraft and existing aircraft and draw down $114 million from the CARES Act Loan Program facility.
Resulting from the actions taken, JetBlue’s average daily cash burn in the third quarter was $6.1 million, ahead of the $7 to $9 million range expected in late July. JetBlue expects average daily cash burn in the fourth quarter to range between $4 and $6 million.
Robin Hayes, JetBlue’s Chief Executive Officer, said: “Our efforts to raise liquidity, reshape our network, and reduce costs, are bearing fruit, and have helped us navigate the immediate crisis. We are confident that our low-cost, low fare leisure model, with the best crewmembers in the industry, and a brand that customers trust, will all help JetBlue emerge stronger from this crisis.
In the near term, we continue to manage our daily flying and take tactical actions to ensure we generate cash as demand recovers. We are also executing revenue and cost initiatives, redeploying our aircraft to new, cash accretive markets, and setting JetBlue up for a strong rebound. Naturally, we aim to be free cash flow positive, with the goal of repairing our balance sheet over the coming years.”