MIAMI – JetBlue (B6) has published its first quarter (Q1) 2021 results showing a GAAP (Generally Accepted Accounting Principles) pre-tax loss of US$347m compared to a pre-tax income of US$ 58m for Q1 2019.
When excluding one-time items, the adjusted pre-tax loss amounts to US$636m compared to a Q1 2019 revenue of US$70m.
The shares showed a GAAP quarterly loss of US$0.78 against an earning of US$0.14 in the same period for 2019. In addition, adjusted loss per share was set at US$1.48 while in Q1 2019, B6 shares showed an adjusted income of US$0.16.
In Q1 2021, following the negative impact from the COVID-19 pandemic, B6 revenues declined by 61% compared to the two preceding years but remained on the lower side of expectations, set between a 61-64% decline when compared to 2019/2020.
The results represent a six-point sequential improvement, quarter over quarter, mainly due to a sustained bookings trend for leisure travel which began in mid-February 2021.
Capacity and Liquidity
Capacity has been reduced by 41%, compared to the last two years to manage expenditure and maintain liquidity. The capacity decrease is in line with B6 forecasts and sets the airline to take advantage of an increase in demand.
A similar decline is observed in operating expenditures – at minus 43% year over two and an adjusted 26% for the same period – a better result when compared to a planned 25% notwithstanding higher fuel prices offset by capacity, and variable or fixed costs reductions.
The action taken has thus resulted in an Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Special Items) loss of US$458m, better than the US$490-540m range previously expected.
As such, B6 ended the first quarter of 2021 with approximately US$3.2bn in unrestricted cash, cash equivalents, and short-term investments, or 40% of 2019 revenue. The airline also repaid in Q1 2021, US$94m in regularly scheduled debt and finance lease obligations, and the fully drawn US$550m revolving credit facility.
During Q1, B6 took measures to manage liquidity by raising approximately US$750m with a convertible debt offering transaction, continuing to achieve significant savings through aggressive capacity management. B6 also executed actions to manage its fixed and variable cost structure, redeploying assets to capture short-term, tactical cash generation opportunities and make “long-term network investments” in its focus cities.
Fuel costs declined by 16% during Q1, setting the price at US$1.72 per gallon compared to US$2.05 for the same period in 2019. As of today, B6 did not enter into hedge fuel contracts for Q2 and expects an average fuel price of US$1.87 during this period.
Robin Hayes, B6 CEO, commented on the results by saying, “Although our EPS (Earning per Share) remains in negative territory, we have seen meaningful progress in the demand recovery, and have started to gain momentum from the groundwork we have laid to emerge from the crisis as a stronger JetBlue.”“Looking back to our work from 2020, I could not be more confident in our future." Robin Hayes, JetBlue CEO Click To Tweet
Hayes concluded by saying, “Our teams continue executing our comprehensive recovery plan, reducing our cash burn, rebuilding our margins, and repairing our balance sheet. We have seen positive cash from operations for March, and this milestone is our first step towards achieving positive EBITDA and returning to profitability.”
More detailed information on B6 results for Q1-2021 is available here.
Featured image: JetBlue Airbus 320-200 N615JB – Photo: Kochan Kleps/Airways