JetBlue Airways Corporation [NASDAQ: JBLU] today reported its results for the third quarter of 2023. The airline faced external challenges including fuel costs and weather conditions; showing a year-on-year dip in operating revenue.
Over the quarter the carrier expanded its transatlantic footprint, and its outlook for the closeout of the year anticipates that growth will be primarily driven by international operations.
Q3 2023 Financial Results
Net Loss Under GAAP
JetBlue reported a net loss of $153 million or $(0.46) per share for the third quarter of 2023 when adhering to Generally Accepted Accounting Principles (GAAP).
However, excluding special items, the adjusted net loss for the same period stood at $129 million or $(0.39) per share. This reflects the challenges the airline faced in this quarter.
System Capacity Surge
Despite the turbulence, JetBlue’s third quarter witnessed a substantial year-over-year increase of 7.1% in system capacity. This expansion demonstrates their commitment to growth and accessibility.
Operating Revenue Dip
JetBlue’s operating revenue for Q3 2023 amounted to $2.4 billion, marking an 8.2% decrease compared to the previous year.
This decrease may be attributed to a variety of factors, including market dynamics and external influences.
Controlled Operating Expenses
A noteworthy achievement for JetBlue in Q3 2023 was the 3.3% year-over-year decrease in Operating Expenses per Available Seat Mile (CASM).
This efficient cost management is commendable and contributes to the airline’s financial resilience.
CASM ex-Fuel Increase
It’s important to highlight that the CASM, excluding fuel and related taxes, other non-airline operating expenses, and special items, for the third quarter of 2023 increased by 5.9% year-over-year.
This metric reflects the airline’s ongoing efforts to manage costs and maintain competitiveness.
Fuel Price Snapshot
JetBlue grappled with an average fuel price of $2.94 per gallon during the third quarter of 2023, which included hedges.
This price has a direct impact on the operational costs and profitability of the airline.
Q3 2023 Key Highlights
Executing on Cost Initiatives
JetBlue has been making strategic moves to streamline its operations and reduce costs. Some notable achievements in this area include:
Structural Cost Program: Progress continues, with approximately $70 million in cost savings expected this year and a projected $150 million to $200 million in run-rate savings through 2024.
Fleet Modernization: The transition to Airbus A220s from 18 Embraer E190s is in full swing. This transition is expected to generate $55 million in cost savings by the end of the year and $75 million in cost savings through 2024.
Expanding Transatlantic Service
JetBlue’s global reach is expanding, with several further developments in their transatlantic services:
Amsterdam Connection: The airline commenced daily service to Amsterdam Schiphol Airport (AMS) from New York’s John F. Kennedy International Airport (JFK) and Boston Logan International Airport (BOS).
Irish Adventures: JetBlue has announced new seasonal service from JFK and BOS to Dublin Airport (DUB) starting March 13, 2024. Additionally, they will launch flights from JFK to Edinburgh Airport (EDI) starting May 22, 2024.
More to Paris: Responding to demand, JetBlue is increasing its presence at Paris Charles de Gaulle Airport (CDG). They will offer new daily service from BOS starting April 3, 2024, and a second daily flight from JFK starting June 20, 2024.
CEO Comments
Robin Hayes, JetBlue’s Chief Executive Officer, acknowledged the challenges faced by the airline in Q3. He praised JetBlue’s dedicated team, saying,
“While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service.”
Hayes also expressed optimism about the future, emphasizing the airline’s commitment to profitable growth and success in 2024 and beyond.
Q4 Outlook
JetBlue’s President and Chief Operating Officer, Joanna Geraghty, shared insights into the airline’s outlook for the upcoming period. “For the fourth quarter, our growth will be driven primarily by international.” She stated. Geraghty further highlighted:
Travel Demand: JetBlue continues to witness healthy travel demand during peak periods and the fourth quarter holidays.
Capacity Management: To address industry capacity surpassing domestic demand during off-peak travel periods, JetBlue will proactively manage capacity and reduce schedules in these times.
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