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JetBlue (JBLU) Q3 2022 Results


A JetBlue Airways Corp. prepares to land at LaGuardia Airport in New York, U.S. on Tuesday, April 18, 2017.

Bloomberg | Bloomberg | Getty Images

Jet Blue Airways posted a profit of $57 million for the third quarter as strong travel demand and higher fares helped the carrier cover more expensive fuel and other costs.

Revenue for the New York-based airline rose 30% in the quarter from the same period last year to $2.56 billion, in line with analysts’ estimates. JetBlue’s operating margin narrowed to 5.4% from 9.4% a year earlier after spending rose nearly 36% from the same period of 2021.

JetBlue CEO Robin Hayes said the carrier expects “another strong quarter of mid-single-digit pretax margins in the fourth quarter, and we will look to build that further in 2023 as we continue to restore our earnings capacity.”

Here’s how JetBlue fared in the third quarter, relative to Wall Street expectations according to Refinitiv consensus estimates:

  • Adjusted earnings per share: 21 cents against 23 cents expected.
  • Total income: $2.56 billion vs $2.56 billion expected.

JetBlue shares were down 7% in morning trading on Tuesday after the earnings release.

“While the revenue outlook is strong, we need to continue to think about every penny we spend, especially in the current environment, as our entire business model of competing with lower rates is based on lower costs compared to to traditional airlines,” JetBlue said. Chief Financial Officer Ursula Hurley wrote in a memo to employees, which was reviewed by CNBC.

Hurley said despite the quarterly results, the airline will not post a full-year 2022 profit “after the difficulties we faced in the first half with the Omicron variant and operational challenges.”

Major U.S. carriers were bullish on travel demand and far exceeded analysts’ expectations on resilient bookings, particularly the return of international travel.

Airline executives say they are limited in the capacity they can add due to lack of planes and pilots, which is helping to keep fares high. Airlines have also held back on adding flights after a slew of costly operational meltdowns prompted them to add more slack to the system.

JetBlue said it plans to expand flights by 1% to 4% in the fourth quarter from 2019 levels. Airlines are comparing capacity levels with three years ago to show their recovery after the Covid pandemic.

“Given the continued fragility of the aviation ecosystem, we are taking a cautious approach to operational investments and the more conservative planning assumptions we have put in place for the summer,” Chief Financial Officer Hurley said in the press release on the results.

The airline expects fourth quarter unit costs, excluding fuel, to increase by up to 10.5% compared to three years ago. He expects unit revenue to increase by up to 19%. Third quarter unit revenue was up more than 23% from three years earlier.

Hurley said the airline covered about 27% of its fuel burn in the fourth quarter.

JetBlue executives will discuss the results on a call at 10 a.m. ET on Tuesday, when they are likely to face questions about the airline’s planned acquisition of a low-cost airline. Spirit. Last week, Spirit shareholders voted overwhelmingly in favor of the $3.8 billion takeover, which now faces a significant hurdle with federal regulators.

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