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JetBlue Airways Corporation 1Q net income slips to $14 million due to Hurricane Sandy, will add Lima Peru

JetBlue Airways Corporation (JetBlue Airways) (New York) today reported its results for the first quarter 2013:

Operating income for the quarter was $59 million, resulting in a 4.5% operating margin, compared to operating income of $89 million and a 7.4% operating margin in the first quarter of 2012.
Pre-tax income of $23 million in the first quarter. This compares to pre-tax income of $49 million in the first quarter of 2012.
Net income for the first quarter was $14 million, or $0.05 per diluted share. This compares to JetBlue’s first quarter 2012 net income of $30 million, or $0.09 per diluted share.

“Thanks to the hard work of our dedicated crewmembers, we reported our twelfth consecutive quarter of profitability,” said Dave Barger, JetBlue’s President and Chief Executive Officer. “First quarter results were solid but below those of a year ago, primarily due to Hurricane Sandy-related demand weakness in the Northeast during the peak Presidents’ Day travel period and higher than expected maintenance costs during the quarter. While the first quarter was challenging, we remain focused on achieving sustainable, profitable growth and are optimistic about the rest of the year.”

Operational Performance

JetBlue reported record first quarter operating revenues of $1.3 billion despite the lingering impact of Hurricane Sandy, which reduced revenue during the Presidents’ Day travel period by an estimated $25 million. Revenue passenger miles for the first quarter increased 7.6% to 8.51 billion on a capacity increase of 6.3%, resulting in a first quarter load factor of 83.9%, an increase of 1.0 point year over year.

Yield per passenger mile in the first quarter was 13.95 cents, up 0.7% compared to the first quarter of 2012. Passenger revenue per available seat mile (PRASM) for the first quarter 2013 increased 1.8% year over year to 11.70 cents and operating revenue per available seat mile (RASM) increased 1.5% year over year to 12.81 cents.

“Successful execution of our network plan, particularly in Boston, and our continued focus on high-margin products and services contributed to the solid revenue results we announced today,” said Robin Hayes, JetBlue’s Chief Commercial Officer.

Operating expenses for the quarter increased 11.3%, or $126 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the first quarter increased 4.6% year over year to 12.23 cents. Excluding fuel and profit sharing, CASM increased 6.6% to 7.62 cents, driven in part by approximately $20 million of higher than expected maintenance expense related to JetBlue’s EMBRAER 190 aircraft.

Fuel Expense and Hedging

JetBlue continued to hedge fuel to manage price volatility. During the first quarter JetBlue hedged approximately 8% of its fuel consumption and managed approximately 10% of its fuel consumption using fixed forward price agreements (FFPs), resulting in a realized fuel price of $3.29 per gallon, a 1.3% increase over first quarter 2012 realized fuel price of $3.25.

JetBlue has managed approximately 37% of its second quarter projected fuel requirements using a combination of FFPs, collars, swaps and call options. Based on the fuel curve as of April 19th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $3.03 in the second quarter.

Balance Sheet Update

JetBlue ended the first quarter with approximately $849 million in unrestricted cash and short term investments. In addition, JetBlue maintains a $200 million line of credit with Morgan Stanley.

JetBlue announced today that it has obtained a new revolving credit facility for up to $350 million. “We continue to enhance and optimize our liquidity position through our growing unencumbered asset base and credit facilities, which we believe will be accretive to return on invested capital,” said Mark Powers, JetBlue’s Chief Financial Officer.

Second Quarter and Full Year Outlook

For the second quarter of 2013, CASM is expected to be between negative 1.5% and positive 0.5% compared to the year-ago period. Excluding fuel and profit sharing, CASM in the second quarter is expected to increase between 3.0% and 5.0% year over year. JetBlue expects nearly three quarters of this year over year increase to be driven by maintenance expense.

CASM for the full year is expected to increase between 1.5% and 3.5% over full year 2012. Excluding fuel and profit sharing, CASM in 2013 is expected to increase between 2.0% and 4.0% year over year.

Capacity is expected to increase between 6.5% and 8.5% in the second quarter and to increase between 6.0% and 8.0% for the full year.

In other news, Jetblue announced Lima will become the 81st Blue City beginning on November 21. The capital of Peru will become the fourth destination in South America with one daily flight from Fort Lauderdale/Hollywood, subject to government approval.

Copyright Photo: Tony Storck/AirlinersGallery.com. Airbus A320-232 N569JB (msn 2075) taxies to the runway at Fort Lauderdale-Hollywood International Airport in special 10th Anniversary livery.

JetBlue Airways:

Like most carriers, JetBlue Airways restores full operations in the storm-ravaged New York area

JetBlue Airways Corporation (New York) reports the following impact of Hurricane Sandy, and its plans to help the community recover.

Operations are fully restored to the JetBlue airports impacted by Hurricane Sandy, including all New York metropolitan airports, and the airline expects to resume its full schedule today, November 3, 2012.

JetBlue customers booked for travel through Sunday, November 4, 2012 may rebook without fee through November 14. Customers who purchased tickets on or before October 28, 2012 and booked for travel through the end of the year who find themselves unable to travel may convert the full value of their ticket into a credit valid for one year. Full details are available here: http://bit.ly/ME6Gx4

JetBlue is matching the first $100,000 in donations made to the American Red Cross via its website (http://jetbluegives.org/). In addition, the company is donating $250,000 to the JetBlue Crewmember Crisis Fund, a 503(c) independent non-profit designed to support JetBlue crewmembers, and will match, dollar for dollar, all crewmember donations to the fund through November 30, 2012.

“New York is our hometown, and accordingly, we had a large number of crewmembers, customers and neighbors in harm’s way this week. Our thoughts are with those who lost loved ones and suffered catastrophic property loss throughout the Northeast,” said JetBlue President and CEO Dave Barger.

Although JetBlue cancelled 1,484 flights in October due to Hurricane Sandy, the overall financial impact to JetBlue’s October profitability is not expected to be material. JetBlue cancelled 230 additional flights in November due to Hurricane Sandy, and the company expects short term demand to soften as customers focus their attention to recovering from the storm. As a result, fourth quarter impact is expected to be material.

“The storm is not yet behind us,” Mr. Barger said. “Our families and communities are focused on rebuilding. The JetBlue family is here to help. I would like to thank JetBlue’s 14,500 crewmembers for their commitment to running a reliable operation for our customers at this difficult time, as well the City and State of New York, the City of Newark, the State of New Jersey, all of the first responders including police, fire and emergency medical technicians, the Metropolitan Transportation Authority and the Port Authority of New York and New Jersey for their leadership and partnership. We are ready, willing and able to do our part and more to get our hometown back to business as usual.”

Copyright Photo: Stephen Tornblom. JetBlue is proud to be considered New York’s airline. Airbus A320-232 N586JB (msn 2160) displays the “I Love NY” special livery on the ramp at New York (JFK). During the storm, nearby LaGuardia Airport was under water due to the storm surge which pushed water in from Long Island Sound on to the runways and the eastern ramps.

JetBlue Airways:

Many of our friends and readers are suffering in the affected areas, especially in the New Jersey shore, Staten Island, Brooklyn, Queens and Hoboken. Please give what you can to the American Red Cross:

JetBlue reports net income of $45 million in the third quarter

JetBlue Airways Corporation (JetBlue Airways) (New York) reported its results for the third quarter 2012:

Operating income for the quarter was $113 million, resulting in an 8.6% operating margin, compared to operating income of $108 million and a 9.0% operating margin in the third quarter of 2011.
Pre-tax income of $73 million in the third quarter. This compares to pre-tax income of $56 million in the third quarter of 2011.
Net income for the third quarter was $45 million, or $0.14 per diluted share. This compares to JetBlue’s third quarter 2011 net income of $35 million, or $0.11 per diluted share.

Operational Performance

JetBlue reported record operating revenues in the third quarter of $1.3 billion, an increase of 9.4% versus the same period last year. Revenue passenger miles for the third quarter increased 8.9% to 9.07 billion on a capacity increase of 8.6%, resulting in a third quarter load factor of 84.8%, an increase of 0.3 points year over year.

Yield per passenger mile in the third quarter was 13.15 cents, up 0.8% compared to the third quarter of 2011. Passenger revenue per available seat mile (PRASM) for the third quarter 2012 increased 1.1% year over year to 11.15 cents and operating revenue per available seat mile (RASM) increased 0.7% year over year to 12.21 cents.

Operating expenses for the quarter increased 9.8%, or $108 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the third quarter increased 1.1% year-over-year to 11.16 cents.

Excluding fuel, CASM increased 3.7% to 6.67 cents, driven primarily by higher maintenance expense due to the aging of JetBlue’s fleet.

Fuel Expense and Hedging

JetBlue continued to hedge fuel to manage price volatility. Specifically, during the third quarter JetBlue hedged approximately 27% of its fuel consumption and additionally managed approximately 18% of its fuel consumption using fixed forward price agreements (FFPs), resulting in a realized fuel price of $3.17 per gallon, a 2% decrease over third quarter 2011 realized fuel price of $3.25. JetBlue’s fuel expense reflects approximately $2 million in gains on fuel hedges settling during the third quarter.

JetBlue has hedged approximately 27% of its fourth quarter projected fuel requirements using a combination of collars, crude call options, and jet fuel swaps. In addition, JetBlue has managed approximately 19% of its fourth quarter projected fuel consumption using FFPs. Based on the fuel curve as of October 19th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $3.25 in the fourth quarter and $3.22 for the full year 2012.

Balance Sheet Update

JetBlue ended the third quarter with approximately $1.1 billion in unrestricted cash and short term investments. Since December 31, 2011, JetBlue has increased the number of unencumbered A320 aircraft to seven and decreased the total debt balance by approximately $213 million.

Fourth Quarter and Full Year Outlook

For the fourth quarter of 2012, CASM is expected to increase between 2.0% and 4.0% over the year-ago period. JetBlue expects roughly half of this year over year increase to be driven by maintenance expense. Excluding fuel, CASM in the fourth quarter is expected to increase between 2.0% and 4.0% year over year.

CASM for the full year is expected to increase between 1.5% and 3.5% over full year 2011. Excluding fuel, CASM in 2012 is expected to increase between 2.0% and 4.0% year over year.

Capacity is expected to increase between 5.0% and 7.0% in the fourth quarter and to increase between 7.0% and 9.0% for the full year.

On the aircraft side, Jetblue is scheduled to take delivery of four Airbus A320s and one Embraer ERJ 190 before the end of the year. All four A320s will be paid in cash as it is believed this is best for the ROIC (Return On Investment Commitment).

Copyright Photo: Stephen Tornblom. Airbus A320-232 N598JB (msn 2314) at the New York (JFK) hub presents a nice ramp portrait in the Barcode tail design.

JetBlue Airways: