Air Traffic Control and Weather-Related Delays For JetBlue Was 'Staggering' In Q3, Stock Slides

JetBlue Airways Corp JBLU stock plummeted after it reported a third-quarter FY23 operating revenue decline of 8.2% year-on-year to $2.35 billion, missing the consensus estimate of $2.81 billion.

Adjusted loss per share was $(0.39), missing the consensus of $(0.25).

Operating expenses increased 3.5% year-over-year to $2.51 billion. The company recorded an operating loss of $(156) million for the quarter, compared to a profit of $139 million a year ago.

The load factor declined to 85.1% in the quarter from 86.1% in 3Q22. Revenue passenger miles increased by 5.8% Y/Y, and ASM increased by 7.1% Y/Y. CASM ex-fuel decreased by 3.3% Y/Y.

The average aircraft fuel price per gallon, including related taxes, was $2.94 vs. $3.84 last year.

The company's adjusted debt was $4.16 billion, and the adjusted debt-to-capitalization ratio was 55% as of September 30, 2023.

Also Read: JetBlue's Silver Lining For Flight Delays: Free Uber Rides In US And Soon, Globally

JetBlue ended the quarter with $973 million in cash and equivalents.

"We continue to see healthy travel demand during peak periods and the fourth quarter holidays. However, industry capacity is outpacing domestic demand during off peak travel periods," commented Joanna Geraghty, JetBlue's President and Chief Operating Officer

"For the fourth quarter, our growth will be driven primarily by international as we proactively work to manage our capacity and reduce schedules in off-peak periods," she added.

4Q23 Outlook: JBLU expects revenue to decline (10.5%) - (6.5%) and Adjusted loss per share of $(0.55)-$(0.35) versus $(0.15) estimate.

It sees ASMs increasing by 0.5% - 3.5% and CASM ex-fuel increasing by 8.5% - 10.5%, and an estimated Fuel Price per Gallon to be $3.05 - $3.20.

"While we have been able to offset some of the costs associated with the challenging operational backdrop, the sheer magnitude of the air traffic control and weather-related delays has been staggering. We remain focused on controlling what we can control, including our structural cost program and fleet modernization plans," commented Ursula Hurley, JetBlue's Chief Financial Officer.

FY23 Outlook, lowered: JBLU now expects FY23 revenue growth of 3%-5% (prior 6% - 9%). It sees adjusted loss per share of $(0.65)-$(0.45) (prior EPS of $0.05-$0.40) vs. $(0.24) estimate.

JBLU expects ASMs to increase by 5%-7% (prior 5.5%-8.5%) and CASM ex-fuel by 4.5% -5.5% (prior 1.5%-4.5%). JBLU sees estimated fuel price per gallon of $3.02 - $3.07.

Price Action: JBLU shares are trading lower by 14.4% at $3.60 on the last check Tuesday.