DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
April 18, 2024
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Top line items:

  • Fourth quarter revenue and costs beat expectations
  • Reached agreement to defer ~$2.5 billion of planned aircraft capital expenditures
  • Focused on restoring profitability through new revenue and cost initiatives in 2024

2024 is an important year of change for JetBlue and we are taking aggressive action, including launching $300 million of revenue initiatives, to return to profitability and deliver value for our shareholders. We are moving with renewed rigor and discipline as we refocus our energy and play to our strengths, further deepening our unique competitive positioning,” said Joanna Geraghty, JetBlue’s new president and chief operating officer.

  • Net loss for the quarter under “GAAP” of $104m. Excluding special items, adjusted net loss for the fourth quarter of 2023 of $63 million.
  • Fourth quarter capacity increased by 3.3% year-over-year.
  • Operating revenue of $2.3 billion for the quarter down 3.7% year-over-year.
  • Operating expense per “CASM” for the quarter decreased 2.4% year-over-year.
  • Operating expense per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items (“CASM ex-Fuel”) for the quarter increased 7.6% year-over-year.
  • Average fuel price in the fourth quarter of 2023 of $3.08 per gallon, including hedges.

Cost initiatives:

  • Achieved $70m in cost savings under our structural cost program in 2023 keeping JetBlue on track to deliver run-rate savings of $175 million to $200 million by the end of 2024.
  • Realized $55 million in cumulative cost savings from our fleet modernization program, which is expected to deliver $75 million in cost savings through 2024 as they replace Embraer E190s with the margin-accretive A220s.

Green results:

  • Reduced 2023 carbon emissions by 6% versus 2019 levels driven by fleet upgrades, a doubling use of sustainable aviation fuel versus 2022, and fuel optimization efforts.

Company officers use language like “positive momentum”, “margin-accretive initiatives” and “confident in our ability”.  Great stuff.

But airlines need to grow or they stagnate. JetBlue needs to grow and its immediate plans with Spirit are floundering.  The decision to defer fleet growth is a crucial signal – yes it saves money, but it also means slower growth.  The aircraft it is deferring are A321LRs and A220s.  Two of the most in-demand models.  These delivery slots will be snapped up, especially the A321LRs (Calling Mr. Kirby, Toulouse on the line).

Joanna Geraghty takes over from Robin Hayes. Warren Christie is the new COO. How these two executives move the company forward is going to be crucial to watch.  Their first task is dealing with the DOJ and court’s rejection of the Spirit deal. Because this is their fastest path to growing.

As Barrons notes: “JetBlue posted a narrower-than-expected loss and beat revenue expectations in the fourth quarter but disappointing guidance hurt the stock.”  And the lack of growth may be the big disappointment.

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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