JetBlue Traffic Up in November - Analyst Blog

JetBlue Airways Corporation (JBLU) reported its preliminary traffic results for November 2010. The company's traffic in the month escalated 11.7% to 2.3 billion compared with 2.0 billion as of November 2009.

Month-ending November 2010, JetBlue Airways' available seat miles were approximately 2.8 billion, up 6.9% compared with the year-ago period. Load factor was up 3.5 points to 80.9% versus 77.4% in the corresponding month of 2009.

Revenue passengers upped 12.4% to 2.0 billion compared with 1.8 billion in November 2009 while departures grew 7.6% to 18.6 million compared with 17.3 million in November 2009. However, average stage length declined slightly by 0.1% to 1,088 compared with 1,089 in the month of November 2009.

Though the company reported an upside in its November traffic, it recently lowered its revenue expectations for fourth quarter 2010. The airline company said that the pick up in the sale of higher-priced tickets for the holiday period is below expectations.

The Delaware-based company now expects passenger revenue per available seat mile to increase by 10% to 13% for the fourth quarter of 2010, compared with a previous expectation of 12% to 15%. Revenue per available seat mile is estimated to increase by 8% to 10%, down from the previous forecast of 10% to 12%.

For the third quarter of 2010, JetBlue reported an increase of 9.6% year over year in revenue passenger miles on an 8.5% increase in capacity. Load factor (percentage of seats filled with passengers) rose 90 basis points year over year to 84.6%. The company reported better-than-expected results, aided by higher fares, revenue maximization, cost control and network optimization.

Equipped with a low cost structure, strong brand name, superior inflight services and a non-union workforce, we believe JetBlue is ideally positioned for growth over the long term. Also, the company's growing presence in the Caribbean and Latin America, leading position in the Boston market, and unique position as the largest domestic carrier at the John F. Kennedy International Airport allow it to boost its top line in the future.

Our current Zacks Consensus Estimate for JetBlue is earnings of 13 cents per share for the fourth quarter compared with earnings of 4 cents in the year-ago quarter. If the company meets the Zacks Consensus Estimate, it would lead to a substantial increase of 235.71%.

One of company's peers United Continental Holdings Inc.(UAL), the largest airline in the U.S. and the holding company for both United Airlines and Continental Airlines, reported a year-over-year increase of 4.8% to 16.15 billion in terms of revenue passenger miles in November traffic. Its other competitor Delta Air Lines (DAL), the second U.S. largest airline, reported a traffic increase of 7.5% year over year in November.

 
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