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May 20, 2024
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JetBlue reported a new loss of $716 million in the first quarter of 2024, compared to a loss of $192 million in 2023.  Passenger revenues were down 5.8% at $2.05 billion compared with $2.18 billion in 2023.  Operating revenues decreased 5.1% in the quarter to 2.2 billion, while total operating expenses were up 14% to $2.9 billion.  Special items, including costs related to the Spirit merger, increased to $562 million from $112 million year over year.

JetBlue CEO Joanna Geraghty stated,“thanks to our incredible crewmembers and our reinvigorated focus on improving reliability, our operation performed above plan in the first quarter, resulting in revenue and costs coming in better than expectations.  As we look to the full year, significant elevated capacity in our Latin region, which represents a large portion of JetBlue’s network, will likely continue to pressure revenue and we expect a setback in our expectations for the full year.  We have full confidence that continuing to take action on our refocused standalone strategy is the right path forward to ultimately return to profitability again.”

In the post Spirit merger environment, JetBlue is rationalizing its network to eliminate unprofitable markets and take advantage of new opportunities.  The company has cut operations in Los Angeles by 1/3rd, and is exiting Baltimore, Bogotá, Burlington, Kansas City, Lima, Newburgh, and Quito, while launching service to Dublin from JFK and Boston and Paris CDG to Boston.

“We’ve begun rolling out the initial components of our refocused plan,” said JetBlue President Marty St. George.  “In the first quarter, we announced a number of significant network changes, which are designed to free up unprofitable flying and reallocate it to proven leisure markets where JetBlue has historically won.  Demand remained healthy in peak periods, and in particular, we saw encouraging performance from our domestic and transatlantic flying, as well as continued outsized demand for our premium seating options.”

The Bottom Line

JetBlue, unlike Delta and United, who reported record demand and profitability, has struggled this year to maintain last years levels of traffic.  The contrast between network and low cost carriers has never been greater, as higher expenses have impacted low fare carriers disproportionately, and they lack premium travelers who make up the difference by paying higher fares.

The carrier has lowered its full year estimates, with projected second quarter revenues dropping more than 10.5% and full year sales falling in low single digits.  The carrier performed below Wall Street expectations, and the revised outlook was not well received by the market.  JetBlue, as we predicted earlier this year, may become a candidate for acquisition.

author avatar
Ernest Arvai
President AirInsight Group LLC

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