MIAMI – JetBlue (B6) has unveiled its Q2 2020 results. The airline’s revenue and capacity went down by 90% and 85%, respectively.

Accordingly, B6 lost about US$754m in adjusted GAAP pre-tax loss. However, the company’s operating expenses were successfully reduced by over US$900m during the period.

Below is an overview of B6’s Q2 2020 results.

JetBlue A321 | Photo: © Vincenzo Pace (IG: @jfkjetsofficial)

Revenue and liquidity balance

In comparison with Q2 2019, the carrier saw a decline of 90% in its revenue due to the hit of the pandemic. Despite this drop, its traffic volume and performance improved in June.

Regarding B6’s capacity, it decreased by 85% as the company tried to mitigate cash burn. As part of its strategy, the airline filed for CARES Act PSP proceeds.

As a result, B6 ended the quarter with US$2,9bn of unrestricted cash and US$3.4bn in liquidity.

In addition, it repaid US$78m in regularly scheduled debt and finance lease obligations.

B6’s capacity has lightly lifted since April.
Photo: © JetBlue.

JetBlue Reported Losses

Regarding its adjusted GAAP pre-tax loss, B6 lost US$754m during Q2 in comparison with adjusted pre-tax income of US$238m in Q2 2019.

In the value of its shares, the airline lost US$2.02 compared with adjusted diluted earnings per share of $0.60 in the same period in 2019.

The company reported adjusted pre-tax loss of US$152m in Q1 2020.

JetBlue Finance Management

The company secured US$750m in the form of a loan. It also reduced its average daily cash burn by taking further measures.

In leaseback sale transactions, B6 executed US$120m and entered into five binding agreements. The deliveries refer to new aircraft and others already existing in its fleet.

Likewise, the airline achieved cost savings in capacity reductions, adjusted work schedules, and redeployed assets.

Thus, B6’s daily cash burn were about US$9.5m at the end of Q2 in front of forecasted US$11m.

The carrier expects to maintain the downward trend in the matter between US$7m and US$9m in Q3.

B6 has increased its sale-leaseback binding agreements.

JetBlue Operating Expenses

Despite the crisis’ negative impact, the company reduced its costs by over US$900m. The numbers follow B6’s operating expenses reductions by 66% year over year.

By Q2 2020, this drop relied on capacity cuts, adjusted work schedules, and discretionary spend eliminations.

In addition, the fuel price was about US$0.96 per gallon during the quarter in comparison with US$2.16 cost in Q2 2019.

For Q3 2020, the airline expects a price of US$1.24 per gallon. For this period and for Q4, it announced that it already entered fuel derivative contracts.

B6 has implemented several cuts in operations, some of these included adjusted jobs status.
Photo: JetBlue.

JetBlue Action Plan to Gaining Cash

Besides his successful efforts to reposition the airline, B6 CEO Robin Hayes said his focus is to address a three-step framework.

Accordingly, reduce cash burn, rebuild margins, and repair balance sheets are the foreseeable challenges throughout the summer.

Alongside these steps, in short term the company had added tactical point-to-point flights and supported cash generation efforts.

The priority of the airline is to gain cash to recovery its positioning.

Further Expectations

In long term, B6 expects to solidify its network strategy by improving its position in Focus Cities, said B6 President and COO, Joanna Geraghty.

While the passenger demand had increased since April, Geraghty forecasted that the trend will be volatile.

Thus, the company will take a conservative approach in planning capacity and forecasting revenue.