JetBlue slows capacity to protect earnings

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Along with its second quarter results, JetBlue announced the planned sale of three Airbus A320 aircraft from its fleet later this year and the deferral of 16 Embraer E-190 aircraft, originally scheduled for delivery from 2007 through 2012 to 2013 through 2015.
“Slowing capacity growth will allow us to strengthen our balance sheet and facilitate earnings growth,” said Dave Barger, JetBlue’s president and CEO.
However, Barger maintained that JetBlue will continue entering two to four cities a year.
JetBlue’s second-quarter net income climbed to $21m, compared with $14m in the year-ago period.
Revenue in the quarter rose to $730m, from $612m in the second quarter of 2006, a 19.3% increase. Yield per passenger mile was 10.13 cents, up 3.8%. Passenger revenue per available seat mile (PRASM) increased 5.4% year-over-year to 8.46 cents.
Operating expenses for the second quarter were$657m, up 16.3% from the second quarter of 2006. CASM increased 3.9% year-over-year to 8.14 cents. Excluding fuel, CASM increased 3.3% year-over-year.
Operating income for the quarter was $73m, resulting in a 10% operating margin, compared with an operating income of $47m and a 7.7% operating margin in the second quarter of 2006.
The load factor in the second quarter of 2007 was 83.5%, an increase of 1.3 points on a capacity increase of 12.0% over the second quarter of 2006.
For the second quarter, revenue passenger miles increased 13.7% from the second quarter of 2006 to 6.7 billion. Available seat miles grew 12.0% to 8.1 billion.