The airline faced higher fuel costs this quarter as fuel for JetBlue remained high at $2.06 a gallon versus only $1.50 a gallon last year. But some see this flat profit margin as another sign. J.P. Morgan analyst Jamie Baker said, "JetBlue's 'core' -- nonfuel -- guidance has been diminished. Fuel cannot be blamed, and its valuation continues to stretch well beyond reasonable airline levels."
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Traffic climbed 15.6 percent to 5.9 billion revenue passenger miles. Each revenue passenger mile is equal to one paying passenger flown one mile. Capacity expanded 23.2 percent to 7.2 billion available seat miles. Load factor, or occupancy, declined 5.5 points to 82.2 percent at the same time.
In the third quarter, Jetblue expects capacity to rise between 19 percent and 21 percent. Capacity is forecast to grow 20 percent to 22 percent for the year. The airline said the other day that it only expects to break even in the third quarter and earnings will be flat for the rest of the year.
After reporting its second consecutive quarterly loss in the first quarter, the six-year-old airline embarked on a turnaround effort that sought to cut annual costs by $50 million and increase revenue by $30 million.
Part of the cost cutting included selling planes and deferring delivery of others. The company said it would also shift to shorter-haul flights because of fuel prices.BusinessWeek
JetBlue Airways Corp., (JBLU) shares tumbled 7% this morning on news the airline had flat earnings this quarter and expects the year to be flat as well. Shares of the company were down (-0.87) to $11.37.
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