Flying Into Rough Air: JetBlue Airways' Mixed Bag Of Q4 & Cautious Outlook

JetBlue Airways Corp JBLU stock is down after it reported fourth-quarter FY23 results.

Operating revenue declined by 3.7% year-on-year to $2.33 billion, beating the consensus estimate of $2.29 billion. Adjusted loss per share was $(0.19), surpassing the consensus of $(0.28).

Operating expenses increased 0.9% year-over-year to $2.39 billion. The company recorded an operating loss of $(67) million for the quarter, compared to a profit of $43 million a year ago.

The load factor declined to 80.1% in the quarter from 83.2% a year ago. Revenue passenger miles fell by 0.5% Y/Y, and ASM increased by 3.3% YY. Operating expense per available seat mile (CASM) ex-fuel increased by 7.6% Y/Y.

The average fuel price in the fourth quarter of 2023 was $3.08 per gallon, including hedges. The company’s total debt was $4.72 billion as of December 31, 2023. JetBlue ended the year with $1.17 billion in cash and cash equivalents.

“2024 is an important year of change for JetBlue and we are taking aggressive action, including launching $300 million of revenue initiatives, to return to profitability and deliver value for our shareholders. We are moving with renewed rigor and discipline as we refocus our energy and play to our strengths, further deepening our unique competitive positioning,” said Joanna Geraghty, JetBlue’s president and chief operating officer.

The company achieved $70 million in cost savings in 2023 and is on track to deliver run-rate savings of $175 million to $200 million by the end of 2024.

Outlook: JetBlue expects revenue to decline (9.0%)-(5.0%) Y/Y in the first quarter of fiscal 2024. It sees ASMs decreasing by (6.0%) – (3.0%) and CASM ex-fuel increasing by 9.0% – 11.0%, and an estimated Fuel Price per Gallon to be $2.87 – $3.02 for the quarter.

JetBlue now expects FY24 to be flat. It expects ASMs to decline by low single digits and CASM ex-fuel to increase by mid-to-high single digits. 

“As we look ahead in 2024, we are seeing positive momentum in our revenue growth. Demand during peak periods remains strong, and we continue to manage our capacity during off-peak periods to reflect evolving demand trends. We plan to continue to refine our network and product offering to better serve our leisure customers while diversifying revenues with margin-accretive initiatives,” added Geraghty.

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Price Action: JBLU shares are trading lower by 2.27% at $5.38 on the last check Tuesday.

Photo via Wikimedia Commons