31 October, 2023

JetBlue Airways has reported its results for the third quarter of 2023.

 JetBlue Airways Corporation reported its results for the third quarter of 2023:

“While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service.” said Robin Hayes, JetBlue’s Chief Executive Officer. “As we look ahead, we are making improvements to drive profitable growth and ensure JetBlue is positioned for success in 2024 and beyond.”

Third Quarter 2023 Financial Results

  • Net loss for the third quarter of 2023 under Generally Accepted Accounting Principles (“GAAP”) of $153 million or $(0.46) per share. Excluding special items, adjusted net loss for the third quarter of $129 million (1) or $(0.39) per share.
  • Third quarter system capacity increased 7.1% year-over-year.
  • Operating revenue of $2.4 billion for the third quarter of 2023, down 8.2% year-over-year.
  • Operating expenses per available seat mile ("CASM") for the third quarter of 2023 decreased 3.3% year-over-year.
  • Operating expense per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items ("CASM ex-Fuel") for the third quarter of 2023 increased 5.9% (1) year-over-year.
  • Average fuel price in the third quarter of 2023 of $2.94 per gallon, including hedges.

Third Quarter 2023 Key Highlights

  • Executing on Our Cost Initiatives
    • Continued to realize savings under the structural cost program, which remains on track to deliver approximately $70 million in cost savings this year and $150 million to $200 million in run-rate savings through 2024.
    • Progressed the fleet modernization program with 18 Embraer E190s removed from the fleet to date as we transition to the margin accretive Airbus A220s, which is expected to generate $55 million in cost savings by the end of this year and $75 million in cost savings through 2024.
  • Expanding Transatlantic Service
    • Began daily service to Amsterdam Schiphol Airport (AMS) from New York's John F. Kennedy International Airport (JFK) and Boston Logan International Airport (BOS).
    • Announced new seasonal service from JFK and BOS to Dublin Airport (DUB) starting March 13, 2024 and from JFK to Edinburgh Airport (EDI) starting May 22, 2024, as well as additional flights to Paris Charles de Gaulle Airport (CDG) with new daily service from BOS starting April 3, 2024 and a second daily flight from JFK starting June 20, 2024.
  • Delivering Value to Our Customers
    • Recognized by J.D. Power for the JetBlue Plus Card, which ranked the highest among co-brand airline credit cards, demonstrating the value it offers customers.
    • Added 10 new international markets to our co-brand card portfolio and launched the ability to redeem TrueBlue® points on key partner airlines directly on jetblue.com.
    • Announced new and improved perks for Mosaic members in JetBlue’s TrueBlue® loyalty program starting in 2024, reflecting JetBlue’s commitment to identifying new ways to add value to the program.
    • Introduced formal family seating guarantee to ensure children aged 13 and younger can sit next to an adult traveling with them on the same reservation.

Balance Sheet and Liquidity

  • $1.5 billion in unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities at quarter-end (excluding our $600 million undrawn revolving credit facility).
  • Extended the maturity date of our undrawn revolving credit facility to October 21, 2025.
  • Adjusted debt to capital ratio of 55% (1) as of September 30, 2023.
  • Paid $254 million in debt and finance lease obligations during 2023.

Outlook

“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. 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,” said Joanna Geraghty, JetBlue’s President and Chief Operating Officer.

Fourth Quarter and Full-Year 2023 Outlook

Estimated 4Q 2023

Estimated FY 2023

Available Seat Miles (ASMs) Year-Over-Year

0.5% - 3.5%

5.0% - 7.0%

Revenue Year-Over-Year

(10.5%) - (6.5%)

3.0% - 5.0%

CASM Ex-Fuel (1) (Non-GAAP) Year-Over-Year (2)

8.5% - 10.5%

4.5% - 5.5%

Estimated Fuel Price per Gallon (3), (4)

$3.05 - $3.20

$3.02 - $3.07

Interest Expense

$60 - $70 million

$205 - $215 million

Adjusted Loss per Share (EPS) (Non-GAAP) (1)

($0.55) - ($0.35)

($0.65) - ($0.45)

“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,” said Ursula Hurley, JetBlue’s Chief Financial Officer.

Notes

  1. Non-GAAP financial measure; Note A provides a reconciliation of certain non-GAAP financial measures used in this release and explains the reasons management believes that presentation of these non-GAAP financial measures provides useful information to investors regarding JetBlue's financial condition and results of operations. In addition, refer to Note A for further details on non-GAAP forward-looking information.
  2. Includes the impact from the new pilot union agreement of approximately four points for the fourth quarter and three points for full year 2023.
  3. Includes fuel taxes and hedges.
  4. JetBlue utilizes the forward Brent crude curve and the forward Brent crude to jet crack spread to calculate the unhedged portion of its prompt quarter. Fuel price is based on forward curve as of October 20, 2023.

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(percent changes based on unrounded numbers)

2023

 

2022

 

Percent
Change

 

2023

 

2022

 

Percent
Change

 

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

$

2,201

 

 

$

2,415

 

 

(8.9

)

 

$

6,842

 

 

$

6,319

 

 

8.3

 

 

Other

 

152

 

 

 

147

 

 

3.1

 

 

 

448

 

 

 

424

 

 

5.6

 

 

Total operating revenues

 

2,353

 

 

 

2,562

 

 

(8.2

)

 

 

7,290

 

 

 

6,743

 

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel and related taxes

 

678

 

 

 

825

 

 

(17.8

)

 

 

2,043

 

 

 

2,305

 

 

(11.4

)

 

Salaries, wages and benefits

 

790

 

 

 

675

 

 

17.0

 

 

 

2,304

 

 

 

2,058

 

 

12.0

 

 

Landing fees and other rents

 

176

 

 

 

131

 

 

34.4

 

 

 

499

 

 

 

412

 

 

21.1

 

 

Depreciation and amortization

 

155

 

 

 

147

 

 

5.8

 

 

 

462

 

 

 

435

 

 

6.2

 

 

Aircraft rent

 

33

 

 

 

30

 

 

7.3

 

 

 

99

 

 

 

83

 

 

18.6

 

 

Sales and marketing

 

80

 

 

 

81

 

 

(0.7

)

 

 

237

 

 

 

216

 

 

9.9

 

 

Maintenance, materials and repairs

 

168

 

 

 

178

 

 

(5.9

)

 

 

512

 

 

 

492

 

 

4.2

 

 

Other operating expenses

 

396

 

 

 

343

 

 

15.3

 

 

 

1,129

 

 

 

1,026

 

 

10.0

 

 

Special items

 

33

 

 

 

13

 

 

NM (1)

 

 

168

 

 

 

57

 

 

NM

 

 

Total operating expenses

 

2,509

 

 

 

2,423

 

 

3.5

 

 

 

7,453

 

 

 

7,084

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

(156

)

 

 

139

 

 

NM

 

 

 

(163

)

 

 

(341

)

 

(52.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

(6.6

)%

 

 

5.4

%

 

(12.0

)

pts.

 

(2.2

)%

 

 

(5.1

)%

 

2.9

 

pts.

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(53

)

 

 

(44

)

 

21.1

 

 

 

(145

)

 

 

(121

)

 

20.7

 

 

Interest income

 

24

 

 

 

11

 

 

NM

 

 

 

64

 

 

 

24

 

 

NM

 

 

Gain (loss) on investments, net

 

 

 

 

 

 

NM

 

 

 

6

 

 

 

(4

)

 

NM

 

 

Other

 

11

 

 

 

(1

)

 

NM

 

 

 

14

 

 

 

(1

)

 

NM

 

 

Total other expense

 

(18

)

 

 

(34

)

 

45.3

 

 

 

(61

)

 

 

(102

)

 

39.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE
INCOME TAXES

 

(174

)

 

 

105

 

 

NM

 

 

 

(224

)

 

 

(443

)

 

(49.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax Margin

 

(7.4

)%

 

 

4.1

%

 

(11.5

)

pts.

 

(3.1

)%

 

 

(6.6

)%

 

3.5

 

pts.

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

21

 

 

 

(48

)

 

NM

 

 

 

17

 

 

 

57

 

 

(68.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

$

(153

)

 

$

57

 

 

NM

 

 

$

(207

)

 

 

(386

)

 

(46.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER
COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.46

)

 

$

0.18

 

 

 

 

$

(0.63

)

 

$

(1.20

)

 

 

 

Diluted

$

(0.46

)

 

$

0.18

 

 

 

 

$

(0.63

)

 

$

(1.20

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

333.3

 

 

 

323.9

 

 

 

 

 

331.0

 

 

 

322.5

 

 

 

 

Diluted

 

333.3

 

 

 

325.0

 

 

 

 

 

331.0

 

 

 

322.5

 

 

 

 

 

(1) Not meaningful or greater than 100% change.

JETBLUE AIRWAYS CORPORATION

COMPARATIVE OPERATING STATISTICS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(percent changes based on unrounded numbers)

2023

 

2022

 

Percent Change

 

2023

 

2022

 

Percent Change

 

Revenue passengers (thousands)

 

10,911

 

 

 

10,502

 

 

3.9

 

 

 

32,309

 

 

 

29,075

 

 

11.1

 

 

Revenue passenger miles (RPMs)
(millions)

 

14,777

 

 

 

13,963

 

 

5.8

 

 

 

42,950

 

 

 

38,857

 

 

10.5

 

 

Available seat miles (ASMs) (millions)

 

17,362

 

 

 

16,217

 

 

7.1

 

 

 

51,484

 

 

 

48,005

 

 

7.2

 

 

Load factor

 

85.1

%

 

 

86.1

%

 

(1.0

)

pts.

 

83.4

%

 

 

80.9

%

 

2.5

 

pts.

Aircraft utilization (hours per day)

 

10.7

 

 

 

10.1

 

 

5.9

 

 

 

10.9

 

 

 

10.1

 

 

7.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average fare

$

201.73

 

 

$

229.95

 

 

(12.3

)

 

$

211.77

 

 

$

217.34

 

 

(2.6

)

 

Yield per passenger mile (cents)

 

14.89

 

 

 

17.30

 

 

(13.9

)

 

 

15.93

 

 

 

16.26

 

 

(2.0

)

 

Passenger revenue per ASM (cents)

 

12.68

 

 

 

14.89

 

 

(14.9

)

 

 

13.29

 

 

 

13.17

 

 

1.0

 

 

Operating revenue per ASM (cents)

 

13.55

 

 

 

15.80

 

 

(14.2

)

 

 

14.16

 

 

 

14.05

 

 

0.8

 

 

Operating expense per ASM (cents)

 

14.45

 

 

 

14.94

 

 

(3.3

)

 

 

14.48

 

 

 

14.76

 

 

(1.9

)

 

Operating expense per ASM, excluding
fuel (cents) (1)

 

10.27

 

 

 

9.69

 

 

5.9

 

 

 

10.09

 

 

 

9.75

 

 

3.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

 

85,971

 

 

 

84,805

 

 

1.4

 

 

 

262,488

 

 

 

246,653

 

 

6.4

 

 

Average stage length (miles)

 

1,253

 

 

 

1,191

 

 

5.2

 

 

 

1,223

 

 

 

1,218

 

 

0.4

 

 

Average number of operating aircraft
during period

 

283

 

 

 

286

 

 

(1.2

)

 

 

281

 

 

 

284

 

 

(1.0

)

 

Average fuel cost per gallon, including fuel
taxes

$

2.94

 

 

$

3.84

 

 

(23.3

)

 

$

3.02

 

 

$

3.68

 

 

(18.0

)

 

Fuel gallons consumed (millions)

 

230

 

 

 

215

 

 

7.2

 

 

 

677

 

 

 

626

 

 

8.1

 

 

Average number of full-time equivalent
crewmembers

 

20,661

 

 

 

20,303

 

 

1.8

 

 

 

20,706

 

 

 

20,013

 

 

3.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Refer to Note A at the end of our Earnings Release for more information on this non-GAAP financial measure.

JETBLUE AIRWAYS CORPORATION

SELECTED CONSOLIDATED BALANCE SHEET DATA

(in millions)

 

 

 

 

 

September 30, 2023

 

December 31, 2022

 

(unaudited)

 

 

Cash and cash equivalents

$

973

 

$

1,042

Total investment securities

 

575

 

 

522

Total assets

 

13,412

 

 

13,045

Total debt

 

4,001

 

 

3,647

Stockholders' equity

 

3,420

 

 

3,563