JetBlue announces first quarter 2017 results

JetBlue Airways Corporation reported its results for the first quarter 2017:

• Operating income of $147 million, a decline of 57.9% from the first quarter of 2016.
• Pre-tax income of $126 million, a decrease of 60.9% from the first quarter of 2016.
• First quarter net income of $85 million, or $0.25 per diluted share. This compares to JetBlue’s first quarter 2016 net income of $207 million, or $0.61 per diluted share.

Financial Performance

JetBlue reported first quarter operating revenues of $1.6 billion. Revenue passenger miles for the first quarter increased 3.9% to 11.4 billion on a capacity increase of 4.2%, resulting in a first quarter load factor of 83.9%, a 0.3 point decrease year over year.

Yield per passenger mile in the first quarter was 12.73 cents, down 5.5% compared to the first quarter of 2016. Passenger revenue per available seat mile (PRASM) for the first quarter 2017 decreased 5.8% year over year to 10.68 cents and operating revenue per available seat mile (RASM) decreased 4.8% year over year to 11.81 cents.

Compared with last year, operating expenses for the quarter increased 15%, or $190 million. Interest expense for the quarter declined 13.5%, or $4 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the first quarter increased 10.3% year over year to 10.73 cents. Excluding fuel, first quarter CASM¹ increased 3.3% to 8.35 cents.

“We remain focused on executing the many initiatives we have underway to improve returns and drive shareholder value. In the near-term, we took quick actions in the first quarter to address RASM trends that were below our expectations. We have been encouraged by the initial results of those actions and expect to see further improvement in the second quarter. I want to add a special thanks to our over 20,000 crewmembers for their tireless efforts in making JetBlue an outstanding company,” said Robin Hayes, JetBlue’s President and CEO.

Fuel Expense and Hedging

In the first quarter JetBlue had hedges in place for approximately 10% of its fuel consumption. The realized fuel price in the quarter was $1.69 per gallon, a 44.1% increase versus first quarter 2016 realized fuel price of $1.17.

JetBlue has hedged approximately 10% of its second quarter and subsequent quarterly periods of 2017 using jet fuel swaps. Based on the fuel curve as of April 13^th, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.73 in the second quarter of 2017.

Liquidity and Cash Flow

JetBlue ended the quarter with approximately $1 billion in unrestricted cash and short term investments, or about 16% of trailing twelve month revenue. In addition, JetBlue maintains approximately $625 million in undrawn lines of credit.

During the first quarter, JetBlue repaid $49 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $35 million in regularly scheduled debt and capital lease obligations in the second quarter 2017 and approximately $194 million for the full year 2017.

“I’m honored to take on the role of JetBlue’s Chief Financial Officer. JetBlue has a strong foundation and I’m excited by the opportunities in front of us to build an even stronger company for our customers, crewmembers and owners. My priority is helping to achieve a cost structure that leverages the full benefit of our scale and strong balance sheet,” said Steve Priest, JetBlue’s EVP Chief Financial Officer.

Second Quarter and Full Year Outlook

For further details see the Investor Update and the First Quarter 2017 Earnings Presentation available via the internet at http://investor.jetblue.com.

Capacity is expected to increase between 4% and 6% year over year in the second quarter 2017. For the full year 2017, JetBlue continues to expect capacity to increase between 5.5% and 7.5%.

RASM is expected to increase between 3% and 6% for the second quarter 2017 compared to the same period in 2016.

CASM excluding fuel is expected to grow between 4.5% and 6.5% for the second quarter of 2017. For the full year 2017, JetBlue continues to expect year over year CASM excluding fuel to grow between 1.5% and 3.5%.

JetBlue will conduct a conference call to discuss its quarterly earnings today, April 25, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will also be available via the internet at http://investor.jetblue.com.