JetBlue: Q3 Corp. Bookings Up, but Overall Revenue Slips

JetBlue on Tuesday reported a third-quarter net loss as executives cited challenges during the quarter that included weather disruptions, “unprecedented” air traffic control restrictions and higher fuel costs. 

“In the third quarter, we had 68 days of significant operational disruption versus 40 days in the third quarter last year,” JetBlue president and COO Joanna Geraghty said during a Tuesday earnings call. “The severity of ATC constraints was also worse than previous summers based on airborne holding, diversions, taxi time and cancellations seen throughout the industry due to ATC.”

JetBlue for the third quarter reported a loss of $153 million, compared with net income of $57 million a year prior. 

The carrier also continued its winddown of the Northeast Alliance with American Airlines, which was terminated by the court in May. Coincidentally, the carrier’s antitrust trial regarding its acquisition of Spirit Airlines began today in Boston. JetBlue declined to discuss the trial during the earnings call.

Another “near-term headwind” is “industry capacity that is outpacing domestic demand,” JetBlue CEO Robin Hayes said. Still, the carrier has seen “an acceleration in corporate booking since Labor Day, an encouraging sign that recovery and business travel is picking back up after notably dropping off through the summer,” Geraghty said.

Corporate segment revenues, however, remain “about 20 percent below” pre-pandemic revenues, JetBlue head of revenue and planning Dave Clark said. “But we are seeing that sequential improvement [in] some areas like media and entertainment, which has seen some softness over the summer with strikes, picked back up in the fall.”

The carrier saw “softer than expected off-peak and close-in leisure demand in September,” Geraghty said, adding that fourth-quarter growth primarily will be driven by international “as we proactively work to manage our capacity and reduce schedules in off-peak periods.” 

JetBlue has been “reallocating capacity out of” and seeing “the most acute demand challenges” in some shorter-haul markets and in some business markets, Clark said. “We’ve really focused there to right-size that capacity to the new reality in those markets.”

One of those markets has been New York, where JetBlue is “seeing the most pressure on the short-haul day-trip market,” Clark said. The carrier is “now sort of hourly when it counts at the key times a day, and then every couple of hours the rest of the day.”

The carrier also confirmed it has or is pulling out of two cities: Havana, Cuba—where flights were suspended in September—and Burlington, Vermont. The latter city had twice-daily flights to New York John F. Kennedy International Airport. The last day of service will be Jan. 4, 2024.

JetBlue Q3 Metrics

JetBlue reported third-quarter revenue of nearly $2.4 billion, down about 8.2 percent from a year prior. Passenger revenue was $2.2 billion, down from more than $2.4 billion in Q3 2022. The average fuel price for the quarter was $2.94 per gallon. Capacity grew 7.1 percent year over year.

Fourth-quarter guidance included an increase in capacity of 0.5 percent to 3.5 percent year over year. Revenue is projected to be down 6.5 percent to 10.5 percent compared with Q4 2022. Estimated fourth-quarter fuel costs are $3.05 to $3.20 per gallon.

For full-year 2023, JetBlue updated its outlook for a revenue increase of 3 percent to 5 percent year over year compared with prior guidance of 6 percent to 9 percent. The carrier also narrowed its projected capacity growth to 5 percent to 7 percent year over year compared with a previous projection of 5.5 percent to 8.5 percent. Estimated 2023 fuel costs are $3.02 to $3.07 per gallon.

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