JetBlue Airways has reported GAAP diluted earnings per share (EPS) of $0.20 in the second quarter of 2021 compared to diluted earnings per share of $0.59 in the second quarter of 2019. Adjusted loss per share was ($0.65) in the second quarter of 2021 versus adjusted diluted earnings per share of $0.60(1) in the second quarter of 2019.
JetBlue’s GAAP pre-tax earnings were $57 million compared to a pre-tax income of $236 million in 2019. The airline’s adjusted pre-tax loss was $309 million for Q2 2021 compared to adjusted pre-tax income of $238 million in Q2 2019.
“In the second quarter, we saw strong signs that consumer confidence and travel demand is returning, with second quarter revenue doubling compared to the first quarter driven by pent-up demand,” said Robin Hayes, JetBlue’s Chief Executive Officer. “As we turn to recovery, we continued to generate positive cash from operations in the second quarter, and we expect continued improvement in our operating performance as we progress towards a full recovery. We are creating a path to restore our earnings power to beyond 2019 levels and generate long-term value for our owners in the years ahead. Our attention is now squarely on rebuilding our margins and repairing our balance sheet.”
During the reporting period, JetBlue reduced its second quarter 2021 capacity by 15% year over two, which is in-line with its planning assumptions. Second quarter 2021 revenue declined 29% year over two, which is at the better end of the airline’s prior expectations of a 30 to 33% decline year over two. JetBlue states that this was driven primarily by continued momentum in leisure demand throughout the quarter.
Operating expenses declined 27% year over two. Excluding special items, adjusted operating expenses declined 7% year over two. CASM ex-Fuel declined meaningfully from a 41% increase year over two in the first quarter, to a 19% increase in the second quarter.
JetBlue’s adjusted Q2 2021 EBITDA was a loss of $86 million, better than the ($115) to ($165) million range previously expected. This was mainly the result of improving underlying revenue trends, the contribution from co-branded agreements, and cost control discipline.
“Our second quarter Adjusted EBITDA came in better than the range we anticipated in early-June. This was mainly the result of improving underlying revenue trends, the benefit from our renewed co-branded agreement, and our discipline in controlling costs,” said Ursula Hurley, JetBlue’s Acting Chief Financial Officer.
“For the third quarter, we estimate our EBITDA will range between $75 and $175 million dollars, reflecting continued sequential improvement in demand partially offset by continued cost pressures from fuel prices, and airport rents and landing fees. We expect to remain in positive EBITDA territory through the end of the year, and expect to generate pre-tax profits in July and August.
We are now squarely focused on repairing our balance sheet, lowering our total cost of debt, and growing our unencumbered asset base. We reduced our net debt by over 50% to under $1 billion dollars at the end of June. Both our net debt and weighted average cost of debt now sit below pre-pandemic levels.”
During the quarter, JetBlue significantly reduced net debt by $1.2 billion to $0.9 billion, which is now below pre-pandemic levels. As of June 30, 2021, JetBlue’s adjusted debt to capital was 55%.
JetBlue ended the second quarter of 2021 with approximately $3.7 billion in unrestricted cash, cash equivalents, and short-term investments, or 46% of 2019 revenue.
JetBlue repaid $89 million in regularly scheduled debt and finance lease obligations and fully repaid a term loan of $722 million during the second quarter of 2021.
The realized fuel price in the second quarter 2021 was $1.91 per gallon, a 12% decline versus second quarter 2019 realized fuel price of $2.16.
As of July 27, 2021, JetBlue has not entered into forward fuel derivative contracts to hedge its fuel consumption for the third quarter of 2021. Based on the forward curve as of July 19, 2021, JetBlue expects an average all-in price per gallon of fuel of $2.09 in the third quarter of 2021.