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JetBlue forecasts a return to profit in the third quarter, restraining growth as costs rise

A JetBlue Airways Airbus A320 passenger plane lands at John F. Kennedy International Airport in New York.

Nick Oiko | LightRocket | Getty Images

JetBlue Airways said on Tuesday it expects to return to its first profit since the start of the Covid pandemic this quarter and will remain cautious on growth while costs rise.

The New York-based airline posted a loss of $188 million in the second quarter on record revenue of nearly $2.45 billion as it faced a nearly 35 percent increase in cost per available seat mile compared with three years ago. Fuel, labor and other costs rose sharply in the last quarter.

JetBlue’s third-quarter capacity will likely end up falling as much as 3% compared with 2019, a sign the carrier is slowing growth as other airlines try to improve reliability after a rocky start to a long summer travel season .

“We reported a record revenue result for the second quarter and are on pace to top that again here in the third quarter and drive our first quarterly profit since the start of the pandemic,” chief executive Robin Hayes said in earnings. release.

The airline estimated its revenue per available seat mile would rise as much as 23% this quarter as consumers absorbed high airfares that JetBlue expects to offset a jump in fuel costs. Excluding fuel, JetBlue expects unit costs to rise 15% to 17% in 2019.

The airline said it will complete the retirement of Embraer E190 planes by mid-2025, more than a year earlier than previously planned. A faster transition to the more economical Airbus A220 aircraft would help it reduce costs, the company said.

Airfare has dipped slightly as the peak summer travel season fades, but JetBlue said “advance bookings keep us cautiously optimistic for the fall.”

JetBlue announced last week that it has finally reached an agreement to acquire ultra-low-cost carrier Spirit Airlines for $3.8 billion in cash after a lengthy bidding war with discount carrier Frontier Airlines. Frontier’s deal to combine with Spirit collapsed hours before the JetBlue-Spirit deal was announced.

JetBlue executives will address questions about the Spirit deal and travel demand on a call at 10 a.m. Tuesday.

Shares of JetBlue fell more than 5% early Tuesday.

JetBlue forecasts a return to profit in the third quarter, restraining growth as costs rise

Source link JetBlue forecasts a return to profit in the third quarter, restraining growth as costs rise

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