JetBlue Publishes Third Quarter Financial Results

DALLAS — Today, JetBlue Airways (B6) reported its results for the third quarter of 2023. Despite facing challenges such as significant weather-related impacts and rising fuel prices, the company's CEO, Robin Hayes, expressed confidence in the ability of B6 crewmembers to provide great service and mitigate these headwinds. Here are the key financial results for the third quarter of 2023:

• Net loss of US$153 million, or US$0.46 per share, under Generally Accepted Accounting Principles (GAAP). Adjusted net loss, excluding special items, was US$129 million, or US$0.39 per share.
• System capacity increased by 7.1% year-over-year.
• Operating revenue was US$2.4 billion, down 8.2% year-over-year.
• Operating expenses per available seat mile (CASM) decreased by 3.3% year-over-year.
• Operating expenses per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items (CASM ex-Fuel), increased by 5.9% year-over-year.
• The average fuel price in the third quarter of 2023 was US$2.94 per gallon, including hedges.

Key Highlights from Q3 2023

• The company continued to realize savings under its structural cost program, which is expected to deliver approximately US$70 million in cost savings this year and US$150 million to US$200 million in run-rate savings through 2024.
• JetBlue progressed its fleet modernization program by removing 18 Embraer E190s from the fleet, transitioning to the margin-accretive Airbus A220s. This transition is expected to generate US$55 million in cost savings by the end of this year and US$75 million in cost savings through 2024.
• The company expanded its transatlantic service by starting daily service to Amsterdam Schiphol Airport (AMS) from New York's John F. Kennedy International Airport (JFK) and Boston Logan International Airport (BOS). B6 also announced new seasonal service to Dublin Airport (DUB) and Edinburgh Airport (EDI) starting in 2024, as well as additional flights to Paris Charles de Gaulle Airport (CDG).
• JetBlue was recognized by J.D. Power for the JetBlue Plus Card, which ranked the highest among co-brand airline credit cards. The company also added 10 new international markets to its co-brand card portfolio and launched the ability to redeem TrueBlue® points on key partner airlines directly on jetblue.com. Additionally, the carrier announced new and improved perks for Mosaic members in its TrueBlue® loyalty program, starting in 2024.
• JetBlue introduced a formal family seating guarantee to ensure that children aged 13 and younger can sit next to an adult traveling with them on the same reservation.

In terms of the balance sheet and liquidity, B6 had US$1.5 billion in unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities at the end of the quarter. The company also extended the maturity date of its undrawn revolving credit facility to October 21, 2025. The adjusted debt-to-capital ratio was 55% as of September 30, 2023.

Looking ahead, the airline expects healthy travel demand during peak periods and the fourth-quarter holidays. However, industry capacity is outpacing domestic demand during off-peak travel periods. International operations, with proactive capacity management and schedule reductions during off-peak periods, will be the key driver of the company's growth in Q4.

Fourth Quarter, Full-year 2023 Outlook

• Available Seat Miles (ASMs) year-over-year: 0.5%–3.5% for the fourth quarter and 5.0%–7.0% for the full year.
• Revenue year-over-year: 10.5% to 6.5% for the fourth quarter and 3.0% to 5.0% for the full year.
• CASM Ex-Fuel (Non-GAAP) year-over-year: 8.5%–10.5% for the fourth quarter and 4.5%–5.5% for the full year.
• Estimated fuel price per gallon: US$3.05–US$3.20 for the fourth quarter and US$3.02–US$3.07 for the full year.
• Interest expense: US$60–US$70 million for the fourth quarter and US$205–US$215 million for the full year.
• Adjusted loss per share (EPS) (non-GAAP): US$0.55-US$0.35 for the fourth quarter and US$0.65-US$0.45 for the full year.

In the end, B6 remains focused on controlling what it can control, including its structural cost program and fleet modernization plans, despite the challenges posed by air traffic control and weather-related delays.

Featured image: jetBlue Airways Airbus A321 (N935JB). Photo: Marty Basaria/Airways