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JetBlue Airways Corporation reports a third quarter net profit of $79 million

JetBlue Airways Corporation (JetBlue Airways) (New York) today reported its results for the third quarter 2014:

Operating income of $164 million in the third quarter. This compares to operating income of $152 million in the third quarter of 2013.

Pre-tax income of $132 million in the third quarter. This compares to pre-tax income of $119 million in the third quarter of 2013.

Net income for the third quarter was $79 million, or $0.24 per diluted share. This compares to JetBlue’s third quarter 2013 net income of $71 million, or $0.21 per diluted share.

“Today, we are pleased to report record third quarter earnings,” said Dave Barger, JetBlue’s Chief Executive Officer. “We saw improved profitability across our network, reflecting the success of our efforts to differentiate our product and culture and maintain competitive costs. I would like to thank our 15,500 crewmembers for their dedication to running a safe airline and delivering outstanding service to our customers.”

Operational Performance

JetBlue reported record third quarter operating revenues of $1.5 billion. Revenue passenger miles for the third quarter increased 5.9% to 10.1 billion on a capacity increase of 4.5%, resulting in a third quarter load factor of 86.2%, an increase of 1.2 points year over year.

Yield per passenger mile in the third quarter was 13.96 cents, up 0.9% compared to the third quarter of 2013. Passenger revenue per available seat mile (PRASM) for the third quarter 2014 increased 2.4% year over year to 12.03 cents and operating revenue per available seat mile (RASM) increased 1.4% year over year to 13.00 cents.

Operating expenses for the quarter increased 5.7%, or $75 million, over the prior year period. Interest expense for the quarter declined 7.8%, or $3 million, due to JetBlue’s focus on debt reduction. JetBlue’s operating expense per available seat mile (CASM) for the third quarter increased 1.2% year over year to 11.61 cents. Excluding fuel and profit sharing, CASM(1) increased 2.6% to 7.13 cents.

Fuel Expense and Hedging

JetBlue continued to hedge fuel to manage price volatility. Specifically, in the third quarter JetBlue had in place hedges for approximately 23% of its fuel consumption and managed approximately 7% of its fuel consumption using fixed forward price agreements (FFPs). This resulted in a realized fuel price of $3.05 per gallon, a 2.7% decrease over third quarter 2013 realized fuel price of $3.14. JetBlue recorded $1 million in losses on fuel hedges that settled during the third quarter.

JetBlue has managed approximately 34% of its fourth quarter projected fuel requirements using a combination of FFPs, jet fuel swaps and caps. Based on the fuel curve as of October 16th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $2.80 in the fourth quarter.

Liquidity and Cash Flow

JetBlue ended the quarter with approximately $742 million in unrestricted cash and short term investments. In addition, JetBlue maintains $550 million in lines of credit.

During the third quarter, JetBlue repaid approximately $61 million in regularly scheduled debt and capital lease obligations. JetBlue plans to repay approximately $128 million in regularly scheduled debt and capital lease obligations in the remainder of 2014.

Fourth Quarter and Full Year Outlook

For the fourth quarter of 2014, CASM is expected to decrease between (3.0)% and (1.0)% versus the year-ago period. Excluding fuel and profit sharing, CASM in the fourth quarter is expected to increase between 1.0% and 3.0% year over year.

CASM for the full year is expected to increase between 0.5% and 2.5% over full year 2013. Excluding fuel and profit sharing, CASM in 2014 is expected to increase between 2.5% and 4.5% year over year.

Capacity is expected to increase between 5.0% and 7.0% in the fourth quarter. For the full year, capacity is expected to increase between 4.0% and 6.0%.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A320-232 N821JB (msn 5417) with Sharklets arrives at the John F. Kennedy International Airport base in New York.

JetBlue Airways Aircraft Slide Show:

JetBlue sells LiveTV to the Thales Group for $399 million

JetBlue Airways (New York) announced today it has completed its sale of its wholly-owned subsidiary LiveTV to Thales Group for $399 million in cash. The sale will allow LiveTV to continue the innovation that has set it apart as the leader in inflight entertainment (IFE) and onboard connectivity under Thales ownership. JetBlue will maintain its relationship with LiveTV to continue providing customers with differentiated, industry-leading inflight entertainment and connectivity products.

LiveTV is the leading provider of live IFE and connectivity systems for commercial airlines. In 2013, LiveTV and its partner ViaSat introduced Ka-band satellite-driven onboard connectivity, a game-changing technological advancement.

Meanwhile Bloomberg Businessweek is taking a look at the challenges facing JetBlue (and others) in providing high speed inflight Internet service. Read the full article: CLICK HERE

Copyright Photo: Brian McDonough/AirlinersGallery.com. Showing off the LiveTV antennae on top, Airbus A320-232 N821JB (msn 5417) banks before landing at Washington (Reagan National).

JetBlue Airways:

JetBlue Airways provides an update on its “Fly-Fi” system

JetBlue Airways (New York) has issued this update on its WiFi aircraft upgrade program:

As Summer hits its stride, we wanted to take a moment to give an update on a topic of great interest to our online audience: WiFi onboard!

Earlier this spring we announced some details on our upcoming service we’re calling Fly-Fi and we’re well on our way to bringing this innovative solution to our customers. Bringing faster internet connections than the other guys isn’t without it’s challenges though. If we want to have a better connection, we can’t just use the same technology, so we turned our eyes to the sky… about 22,000 miles up!

As the first U.S. airline to use Ka Band satellite technology to deliver high speed internet to our aircraft, it also falls to us to prove that the technology and equipment used to deliver it is safe, and have the FAA certify that the equipment is ready to be installed in additional aircraft. With safety as our number one value, we don’t take this responsibility lightly.

In June, we took one of our planes out of service and gave it an experimental designation so we could install the necessary equipment. Aside from the electrical work to be done throughout the cabin, there’s the small matter of outfitting the external equipment as well. It’s no small feat to install rotating, pivoting blades that constantly track the orbiting ViaSat-1!

After several ‘proving flights’ to test the air-worthiness of the added equipment and new radome (the bubble on top of our planes containing antennae), we were able take another flight to test the Fly-Fi system and any impact the signals may have on other aircraft systems or equipment. The tests were VERY thorough, we even tested the lavatory lights!

The most exciting tests were of the system itself though, and the team reporting back was thrilled with the results and download speeds they were seeing. Needless to say, our excitement is high and we itching to start rolling it out, but there are a couple final steps to go.

One of a flurry of photos sent from the experimental aircraft using Fly-Fi

With testing done, the experimental aircraft must now sit and wait for the FAA to review the documentation and data collected to issue a Supplemental Type Certificate that will allow us to return the plane to service, and begin the process of installing Fly-Fi on our fleet. We expect that process to take a bit of time, but once complete, we get to take to the air once again for final preparations. Once the plane is completely vetted, it’ll return to service, and we’ll be able to begin rolling out Fly-Fi to the rest of the fleet.

Top Copyright Photo: James Helbock/AirlinersGallery.com (all others by JetBlue). JetBlue Airways is also adding new Sharklets tail devices in-house to its fleet. The first, the pictured A320-232 N821JB (msn 5417) “Blue Yorker” was unveiled at New York (JFK) on February 22, 2013.

JetBlue Airways: