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JetBlue’s Q2: Highlights and Response from TWU

JetBlue Airways Corporation (NASDAQ: JBLU) reported its results for the second quarter of 2023.

JetBlue Second Quarter 2023 Results Highlights:

  • JetBlue’s net income for Q2 2023 (GAAP) was $138 million ($0.41/share). Adjusted net income: $152 million(1) ($0.45/share).
  • JetBlue’s operating revenue for Q2 2023 was $2.6 billion, up 6.7% from last year.
  • JetBlue’s operating expenses for Q2 2023 were $2.4 billion, down 7.2% from last year. 
  • JetBlue’s passenger load factor during Q2 2023 was 85.3% 

JetBlue has showcased impressive financial performance by recording unprecedented quarterly revenues while maintaining a firm grip on cost control. 

In response to the prevailing business environment, JetBlue is revising its FY2023 earnings outlook to ensure it accurately encapsulates the current challenges.

“Thanks to the hard work of our fantastic Crewmembers, we generated our highest quarterly profit since 2019, demonstrating the progress we have made since the pandemic. These results were underpinned by record quarterly revenues and strong operational performance, reflecting the benefits from our significant investments and robust preparations for the peak summer travel period,” said Robin Hayes, JetBlue’s Chief Executive Officer.

JetBlue’s Second Quarter 2023 Financial Results

  • Q2 2023 GAAP net income: $138 million ($0.41/share). Adjusted net income: $152 million(1) ($0.45/share).
  • Q2 capacity increased by 5.8% compared to last year.
  • Q2 2023 operating revenue: $2.6 billion, up 6.7% from last year.
  • Q2 2023 CASM decreased by 12.2% from last year.
  • Q2 2023 CASM ex-Fuel increased by 3.2%(1) from last year.
  • Average Q2 2023 fuel price: $2.63/gallon, including hedges.

JetBlue’s Second Quarter 2023 Key Highlights

  • Financial performance
    • Adjusted EPS (1) for Q2 2023 met high-end guidance due to ongoing execution of commercial strategies, operational plans, and cost control.
    • Sixth straight quarter of meeting or surpassing cost expectations.
  • Cost initiatives
    • Saved over $37.5 million by replacing Embraer E190 with Airbus A220 in fleet upgrade.
  • Expanded service
    • Began daily service between New York’s John F. Kennedy International Airport and Paris Charles de Gaulle, expanding JetBlue’s transatlantic service with plans to launch service between Boston and Paris in 2024.
    • Continued expansion in the Caribbean with new routes in Puerto Rico and the announcement of service to Belize and St. Kitts and Nevis.
  • Spirit transaction progress
    • Ended the Northeast Alliance with American Airlines due to a negative court ruling to concentrate more on the Spirit transaction.
    • Agreed with Frontier to sell all of Spirit Airlines’ holdings at New York’s LaGuardia Airport, contingent on the completion of the JetBlue-Spirit transaction. This shows JetBlue’s commitment to promoting competition and ultra low-cost carrier service.
  • Customer enhancements
    • Unveiled a new livery reflecting JetBlue’s innovative and disruptive history.
    • Started the new TrueBlue® loyalty program with added benefits, experiencing remarkable growth, especially from Mosaic customers.

JetBlue Q2: Balance Sheet and Liquidity

  • $1.8 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).
  • Adjusted debt-to-capital ratio of 52% (1) as of June 30, 2023.
  • Paid $200 million in debt and finance lease obligations during the second quarter of 2023.

“I’m proud of our team for their continued commitment to our customers as we faced a more challenging than expected operating environment driven by severe air traffic control restrictions and exacerbated by weather. However, our investments in the operation are making a difference and enabling us to recover more quickly as we manage through unforeseeable disruptions,” said Joanna Geraghty, JetBlue’s President Chief Operating Officer.

JetBlue: Outlook for Q3 and Full Year 2023

“Overall leisure demand trends are healthy and we continue to see robust demand during peak periods, led by strength in Latin America, visiting-friends-and-relatives and transatlantic travel, ” said Ms. Geraghty.

“Looking ahead, we are updating our full-year earnings outlook to reflect near-term headwinds related to the termination of the NEA, a challenging operating environment in the northeast and a greater than expected shift of pent-up COVID demand to long-haul international markets which is pressuring demand for domestic travel during the peak summer travel period. While we remain on track to deliver a profitable year and record revenue performance, we are taking action, including redeploying capacity to mitigate these current challenges and improve margins.

Third Quarter and Full-Year 2023 Outlook

 

Estimated 3Q 2023

 

Estimated FY 2023

Available Seat Miles (ASMs) Year-Over-Year

 

5.5% – 8.5%

 

5.5% – 8.5%

Revenue Year-Over-Year

 

(8.0%) – (4.0%)

 

6.0% – 9.0%

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

 

2.5% – 5.5%

 

1.5% – 4.5%

Estimated Fuel Price per Gallon (3)

 

$2.75 – $2.90 (4)

 

$2.85 – $3.05

Interest Expense

 

$45 – $55 million

 

$195 – $205 million

Adjusted EPS (Non-GAAP) (1) (5)

 

($0.20) – $0.00

 

$0.05 – $0.40

Source: JetBlue

“While challenges persist in the near term, we are pulling every lever at our disposal to continue to drive cost efficiencies, including better utilization, technology upgrades, fleet modernization and our structural cost program. I remain confident in our ability to manage the near-term headwinds and focus on the factors we can control as we rebuild long-term margins and restore our historical earnings power,” said Ursula Hurley, JetBlue’s Chief Financial Officer.

JetBlue: Extracted Slides from Q2 2023 Presentation

JetBlue’s Q2 Earnings: TWU Cautions on Spirit Airlines Acquisition

In response to JetBlue Airways’ reported Q2 earnings, with $2.61 billion in revenue and $138 million in profits, Transport Workers Union International (TWU) President John Samuelsen released the following statement:

“JetBlue’s reported Q2 earnings today are a stark reminder of the extreme wealth JetBlue executives and shareholders pocket each day while leaving its Inflight Crewmembers to deal with severe understaffing and widespread mismanagement and its customers to face some of the worst delays in the industry. Rather than putting this money into improving its operations, JetBlue continues to pour money into lobbying efforts to secure a bad deal opposed by both the DOJ and the DOT. Should JetBlue’s deal with Spirit be successful, we have no reason to believe that these conditions will improve and every reason to believe workers and the flying public will only be worse off.

“With its proposed acquisition of Spirit, JetBlue isn’t interested in driving competition and lowering costs to consumers, nor supporting blue-collar jobs. The company is looking to become the fifth-largest airline by dismantling one of the country’s leading Ultra Low-Cost Carriers, boosting up fares, which we believe will ultimately cut good airline jobs. That’s why the Transport Workers Union remains firmly against this deal and in support of industry goals that put workers and passengers first.”

About JetBlue

JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando and San Juan. JetBlue known for its low fares and great service, carries customers to more than 100 cities throughout the United States, Latin America, the Caribbean, Canada, the United Kingdom and France. For more information and the best fares, visit jetblue.com.

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 3 points for each the third quarter and 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. As of July 21, 2023, the forward Brent crude per barrel price was $80 and the crack spread averaged $25 per barrel for the third quarter of 2023.
  5. Potential impact from recently announced Pratt & Whitney PW1100G engine removal requirements under review and not included.

JetBlue: Statements of Operations

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

(percent changes based on unrounded numbers)

 

2023

 

2022

 

Percent
Change

 

2023

 

2022

 

Percent
Change

 

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

 

$

2,460

 

 

 

2,302

 

 

6.9

 

 

$

4,641

 

 

 

3,904

 

 

18.9

 

 

Other

 

 

150

 

 

 

143

 

 

4.8

 

 

 

296

 

 

 

277

 

 

7.0

 

 

Total operating revenues

 

 

2,610

 

 

 

2,445

 

 

6.7

 

 

 

4,937

 

 

 

4,181

 

 

18.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel and related taxes

 

 

599

 

 

 

910

 

 

(34.2

)

 

 

1,365

 

 

 

1,481

 

 

(7.9

)

 

Salaries, wages and benefits

 

 

772

 

 

 

695

 

 

11.2

 

 

 

1,514

 

 

 

1,383

 

 

9.5

 

 

Landing fees and other rents

 

 

163

 

 

 

149

 

 

9.4

 

 

 

323

 

 

 

281

 

 

14.9

 

 

Depreciation and amortization

 

 

155

 

 

 

145

 

 

7.2

 

 

 

306

 

 

 

288

 

 

6.4

 

 

Aircraft rent

 

 

34

 

 

 

27

 

 

25.6

 

 

 

66

 

 

 

53

 

 

25.0

 

 

Sales and marketing

 

 

82

 

 

 

78

 

 

4.1

 

 

 

157

 

 

 

135

 

 

16.2

 

 

Maintenance, materials and repairs

 

 

170

 

 

 

162

 

 

5.0

 

 

 

345

 

 

 

313

 

 

9.9

 

 

Other operating expenses

 

 

376

 

 

 

348

 

 

7.9

 

 

 

732

 

 

 

683

 

 

7.4

 

 

Special items

 

 

24

 

 

 

44

 

 

(45.6

)

 

 

136

 

 

 

44

 

 

NM

 

 

Total operating expenses

 

 

2,375

 

 

 

2,558

 

 

(7.2

)

 

 

4,944

 

 

 

4,661

 

 

6.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

235

 

 

 

(113

)

 

NM (1)

 

 

(7

)

 

 

(480

)

 

(98.6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

 

9.0

%

 

 

(4.6

)%

 

13.6

 

pts.

 

(0.1

)%

 

 

(11.5

)%

 

11.4

 

pts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(47

)

 

 

(40

)

 

17.7

 

 

 

(93

)

 

 

(77

)

 

20.4

 

 

Interest income

 

 

23

 

 

 

8

 

 

NM

 

 

 

40

 

 

 

12

 

 

NM

 

 

Gain (loss) on investments, net

 

 

4

 

 

 

(5

)

 

NM

 

 

 

7

 

 

 

(4

)

 

NM

 

 

Other

 

 

1

 

 

 

(1

)

 

NM

 

 

 

3

 

 

 

 

 

NM

 

 

Total other expense

 

 

(19

)

 

 

(38

)

 

50.7

 

 

 

(43

)

 

 

(69

)

 

37.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME
TAXES

 

 

216

 

 

 

(151

)

 

NM

 

 

 

(50

)

 

 

(549

)

 

(90.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax Margin

 

 

8.3

%

 

 

(6.2

)%

 

14.5

 

pts.

 

(1.0

)%

 

 

(13.1

)%

 

12.1

 

pts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

 

(78

)

 

 

(37

)

 

NM

 

 

 

(4

)

 

 

106

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

138

 

 

$

(188

)

 

NM

 

 

$

(54

)

 

 

(443

)

 

(87.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER COMMON
SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.41

 

 

$

(0.58

)

 

 

 

$

(0.16

)

 

$

(1.38

)

 

 

 

Diluted

 

$

0.41

 

 

$

(0.58

)

 

 

 

$

(0.16

)

 

$

(1.38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES
OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

331.9

 

 

 

323.1

 

 

 

 

 

330.0

 

 

 

321.9

 

 

 

 

Diluted

 

 

333.6

 

 

 

323.1

 

 

 

 

 

330.0

 

 

 

321.9

 

 

 

 

 

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

JETBLUE AIRWAYS CORPORATION

COMPARATIVE OPERATING STATISTICS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

(percent changes based on unrounded numbers)

 

2023

 

2022

 

Percent
Change

 

2023

 

2022

 

Percent
Change

 

Revenue passengers (thousands)

 

 

11,207

 

 

 

10,396

 

 

7.8

 

 

 

21,398

 

 

 

18,573

 

 

15.2

 

 

Revenue passenger miles (RPMs)
(millions)

 

 

14,798

 

 

 

13,967

 

 

5.9

 

 

 

28,173

 

 

 

24,893

 

 

13.2

 

 

Available seat miles (ASMs) (millions)

 

 

17,353

 

 

 

16,405

 

 

5.8

 

 

 

34,122

 

 

 

31,788

 

 

7.3

 

 

Load factor

 

 

85.3

%

 

 

85.1

%

 

0.2

 

pts.

 

82.6

%

 

 

78.3

%

 

4.3

 

pts.

Aircraft utilization (hours per day)

 

 

11.3

 

 

 

10.4

 

 

8.7

 

 

 

11.2

 

 

 

10.2

 

 

9.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average fare

 

$

219.47

 

 

$

221.38

 

 

(0.9

)

 

$

216.90

 

 

$

210.20

 

 

3.2

 

 

Yield per passenger mile (cents)

 

 

16.62

 

 

 

16.48

 

 

0.8

 

 

 

16.47

 

 

 

15.68

 

 

5.0

 

 

Passenger revenue per ASM (cents)

 

 

14.17

 

 

 

14.03

 

 

1.0

 

 

 

13.60

 

 

 

12.28

 

 

10.7

 

 

Revenue per ASM (cents)

 

 

15.04

 

 

 

14.90

 

 

0.9

 

 

 

14.47

 

 

 

13.15

 

 

10.0

 

 

Operating expense per ASM (cents)

 

 

13.68

 

 

 

15.59

 

 

(12.2

)

 

 

14.49

 

 

 

14.66

 

 

(1.2

)

 

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

 

 

10.00

 

 

 

9.69

 

 

3.2

 

 

 

9.99

 

 

 

9.77

 

 

2.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

 

 

89,036

 

 

 

83,455

 

 

6.7

 

 

 

176,517

 

 

 

161,848

 

 

9.1

 

 

Average stage length (miles)

 

 

1,218

 

 

 

1,233

 

 

(1.2

)

 

 

1,208

 

 

 

1,232

 

 

(1.9

)

 

Average number of operating aircraft
during period

 

 

282

 

 

 

283

 

 

(0.6

)

 

 

284

 

 

 

283

 

 

0.4

 

 

Average fuel cost per gallon, including
fuel taxes

 

$

2.63

 

 

$

4.24

 

 

(37.9

)

 

$

3.06

 

 

$

3.60

 

 

(15.1

)

 

Fuel gallons consumed (millions)

 

 

228

 

 

 

215

 

 

6.1

 

 

 

446

 

 

 

411

 

 

8.5

 

 

Average number of full-time equivalent
crewmembers

 

 

20,921

 

 

 

20,249

 

 

3.3

 

 

 

20,729

 

 

 

19,868

 

 

4.3

 

 

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