Silhouette of a passenger in front of the JetBlue Airbus A321neo aircraft spotted on the apron tarmac docked at the passenger jet bridge from the terminal of Amsterdam Schiphol International Airport AMS EHAM in the Netherlands.
Nicholas Economou | Photo only | Getty Images
JetBlue Airways Shares plunged more than 15% on Tuesday after the airline cut its revenue forecast for 2024, a setback as it tries to return to profitability.
The airline said second-quarter revenue was expected to fall as much as 10.5% year-on-year, more than double the decline analysts polled by LSEG had expected. New York-JetBlue forecast full-year revenue would fall in the low single digits, also below Wall Street’s expectations, after the company forecast flat revenue for the year in its January report.
JetBlue has gone on a cost-cutting spree, eliminating unprofitable routes and focusing on routes with stable demand and high revenue for premium seats. The airline terminated its merger agreement with the budget carrier last month Spirit Airlines after a judge blocked that $3.8 billion deal on antitrust grounds.
Tuesday’s forecast update shows a growing gap between JetBlue and its larger competitors that have large international networks delta And Unitedwho have forecast profits, strong sales and record demand this summer.
“If we look at the year as a whole, the capacity in our Latin has increased significantly [America] The region, which represents a large portion of JetBlue’s network, will likely continue to put pressure on revenues and we expect a setback in our full-year expectations,” Joanna Geraghty, who became CEO in February, said in an earnings note. “We have full results.” We are confident that continuing our realigned standalone strategy is the right path to ultimately returning to profitability.
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JetBlue stock is falling on Tuesday.
JetBlue is affected by an engine recall from Pratt & Whitney that has caused some of its planes to be grounded.
“It’s definitely a big obstacle,” Geraghty told CNBC of the engine problem. “Pratt is a good partner. We are focused on working with them to make compensation progress. We are not yet where we need to be. … But that’s ultimately what’s slowing our growth.”
Geraghty said the airline expects lower capacity next year.
In an investor presentation on Tuesday, the airline said it was “actively exploring” further cost reductions. JetBlue announced earlier this year that it would defer $2.5 billion in aircraft spending until the end of the year.
In the first three months of the year, JetBlue lost $716 million, or $2.11 per share, compared with a loss of $192 million, or 58 cents per share, in the same period in 2023.
Adjusted for one-time items, including breakup costs related to the failed Spirit merger, JetBlue lost $145 million, or 43 cents per share, less than the adjusted loss of 52 cents that analysts surveyed by LSEG had expected.
Revenue fell 5.1% year over year to $2.21 billion, in line with LSEG’s revenue expectations.
Bright spots included strong demand during peak travel, domestic and European flights “as well as continued strong demand for our premium seating options,” said JetBlue President Marty St. George, who returned to the airline earlier this year.
—CNBC’s Phil LeBeau contributed to this report.
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2024-04-23 17:06:04
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