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JetBlue Reports a Loss and Anticipates Reduced Capacity For 2024

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JetBlue

JetBlue Airways, which posted a loss in the fourth quarter of last year and expects capacity to fall this year, is now struggling to return to profitability.

The airline expects revenue to fall between 5 percent and 9 percent in the first three months of the year, higher than the 5.5 percent drop forecast by Wall Street analysts. The airline said capacity would fall 6 percent in the first quarter.

JetBlue said it expects capacity to fall to the low single digits in 2024 and that adjusted margins could be close to breaking even. The company’s shares fell 4.7 percent on Tuesday.

In a presentation to investors, JetBlue said seven of its Airbus planes were grounded for engine inspections due to production problems at RTX-owned manufacturer Pratt & Whitney. That number could rise to 15 by the end of the year, the agency said.

The airline has been grappling with rising costs, operational challenges, and changing travel patterns, and just earlier this month a federal judge barred its planned $3.8 billion acquisition of Spirit Airlines. JetBlue warned last week that the agreement with Spirit Airlines could be terminated, but provided no further details Tuesday. JetBlue is also offering buyouts to some salaried employees to cut costs.

The New York-based airline said Tuesday it plans to delay spending $2.5 billion on new aircraft until the end of this decade. Joanna Geraghty, JetBlue’s chief operating officer, and incoming chief executive, declined to say on a conference call whether Airbus had offered JetBlue incentives to delay deliveries of planes as other airlines scrambled to buy new ones. Reuters reported earlier this week that United Airlines was looking at the Airbus A321neo, which JetBlue also ordered, after expressing frustration with Boeing’s production problems.

Geraghty, however, said on the earnings call: “I do believe that this was a win-win for both [Airbus] and ourselves over the next few years.”

Here are the fourth-quarter results JetBlue posted, compared to the Wall Street estimates that LSEG (formerly Refinitiv) adhered to.

Jetblue airways
  • Adjusted loss per share: 19 cents vs. 28 cents expected
  • Revenue: $2.33 billion vs. $2.29 billion expected

The New York-based airline reported a net loss of $104 million in the final three months of 2023, compared with a $24 million profit it realized in the same period last year. JetBlue lost 31 cents per share in the fourth quarter, or 19 cents per share on an adjusted basis, compared with a profit of 7 cents a year earlier.

Fourth-quarter revenue fell 3.7 percent from a year earlier but was still slightly above Wall Street’s expectations.

JetBlue has been restructuring its network to focus on more profitable flights. CNBC Money reported earlier this month that JetBlue plans to cut flights.

“Demand during peak periods remains strong, and we continue to manage our capacity during off-peak periods to reflect evolving demand trends,” Geraghty said in the earnings release. “We plan to continue to refine our network and product offering to better serve our leisure customers while diversifying revenues with margin-accretive initiatives.”

Southwest Airlines, has also slowed growth or optimized their networks to avoid overcapacity and low fares during off-peak hours while discounting less popular flights.

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