JetBlue Airways first quarter 2013 results show an operating income of $59 million, resulting in a 4.5% operating margin, compared to operating income of $89 million and a 7.4% operating margin in the first quarter of 2012.
Pre-tax income was down 46% to $23 million from $49 million in the first quarter of 2012. Net income for the first quarter was $14 million, or $0.05 per diluted share. This compares to JetBlue’s first quarter 2012 net income of $30 million, or $0.09 per diluted share.
“Thanks to the hard work of our dedicated crewmembers, we reported our twelfth consecutive quarter of profitability,” said Dave Barger, JetBlue's President and Chief Executive Officer. “First quarter results were solid but below those of a year ago, primarily due to Hurricane Sandy-related demand weakness in the Northeast during the peak Presidents’ Day travel period and higher than expected maintenance costs during the quarter. While the first quarter was challenging, we remain focused on achieving sustainable, profitable growth and are optimistic about the rest of the year.”
JetBlue reported record first quarter operating revenues of $1.3 billion despite the lingering impact of Hurricane Sandy, which reduced revenue during the Presidents’ Day travel period by an estimated $25 million. Revenue passenger miles for the first quarter increased 7.6% to 8.51 billion on a capacity increase of 6.3%, resulting in a first quarter load factor of 83.9%, an increase of 1.0 point year over year.
Yield per passenger mile in the first quarter was 13.95 cents, up 0.7% compared to the first quarter of 2012. Passenger revenue per available seat mile (PRASM) for the first quarter 2013 increased 1.8% year over year to 11.70 cents and operating revenue per available seat mile (RASM) increased 1.5% year over year to 12.81 cents.
“Successful execution of our network plan, particularly in Boston, and our continued focus on high-margin products and services contributed to the solid revenue results we announced today,” said Robin Hayes, JetBlue’s Chief Commercial Officer.
Operating expenses for the quarter increased 11.3%, or $126 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the first quarter increased 4.6% year over year to 12.23 cents. Excluding fuel and profit sharing, CASM increased 6.6% to 7.62 cents, driven in part by approximately $20 million of higher than expected maintenance expense related to JetBlue’s EMBRAER 190 aircraft.
During the first quarter JetBlue hedged approximately 8% of its fuel consumption and managed approximately 10% of its fuel consumption using fixed forward price agreements (FFPs), resulting in a realized fuel price of $3.29 per gallon, a 1.3% increase over first quarter 2012 realized fuel price of $3.25.
JetBlue has managed approximately 37% of its second quarter projected fuel requirements using a combination of FFPs, collars, swaps and call options. Based on the fuel curve as of April 19th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $3.03 in the second quarter.
JetBlue ended the first quarter with approximately $849 million in unrestricted cash and short term investments. In addition, JetBlue maintains a $200 million line of credit with Morgan Stanley.
For the second quarter of 2013, JetBlue expects CASM to be between negative 1.5% and positive 0.5% compared to the year-ago period. Excluding fuel and profit sharing, CASM in the second quarter is expected to increase between 3.0% and 5.0% year over year. JetBlue expects nearly three quarters of this year over year increase to be driven by maintenance expense.
CASM for the full year is expected to increase between 1.5% and 3.5% over full year 2012. Excluding fuel and profit sharing, CASM in 2013 is expected to increase between 2.0% and 4.0% year over year.
Capacity is expected to increase between 6.5% and 8.5% in the second quarter and to increase between 6.0% and 8.0% for the full year.