JetBlue Airways Corporation on 23 January reported a net profit of $161 million during the fourth quarter of 2019 that slightly beat analyst expectations despite being a 5% decline year-on-year versus $170 million in 2018.
The New York-based carrier during the fourth quarter reported $2 billion in operating revenue, up 3% year-on-year compared with $1.96 billion during the same quarter in 2018. Operating expenses rose by 3% year-on-year from $1.75 billion in 2018 to $1.8 billion during the fourth quarter.
Revenue per available seat mile (RASM) declined by 3% year-on-year during the fourth quarter. Cost per available seat mile excluding fuel (CASM ex-fuel) remained flat. Capacity rose 6% during the fourth quarter.
During the fiscal 2019 year, JetBlue reported $8 billion in operating revenue, up 6% from $7.7 billion for fiscal 2018. Operating expenses shrank 1% from $7.4 billion in fiscal 2018 to $7.3 billion in 2019. Net profit for fiscal 2019 tripled compared with 2018, rising from $189 million to $569 million. Capacity rose 7% during fiscal 2019.
Analysts were less enthusiastic about guidance for the first quarter from JetBlue chief executive Robin Hayes during an earnings call on 23 January that factored earthquakes in Puerto Rico and delayed deliveries of Airbus aircraft.
“2019 saw an unusually volatile year in our Latin and Caribbean markets, which masked some of the progress we have made,” Hayes says. “History suggests bookings will normalize.”
The low-cost carrier remains committed to Puerto Rico amid earthquakes that have wracked the island, JetBlue chief operating officer Joanna Geraghty says during the call, adding it will temporarily reduce capacity to destinations there to protect revenue per available seat miles. The carrier’s first-quarter guidance expecting a RASM increase of zero to 3% factors in decreased demand on Puerto Rico routes.
CASM ex-fuel during the first quarter is expected to increase between 1.5% to 3.5% year-on-year because of low capacity growth amid delayed deliveries of Airbus A321neo due to manufacturing delays, says JetBlue chief operating officer Joanna Geraghty during the call.
“Our fourth quarter and full-year 2019 capacity grew in the upper half of our guidance range due to improved completion factor, in addition to shifting the timing of our cabin restyling program to make up for neo delivery delays,” Geraghty says.
JetBlue has slowed the process of restyling its cabins to keep aircraft in service during the delayed deliveries of Airbus aircraft. Hayes says the process should be completed by end of 2021, instead of the original goal at the end of 2020.
Airbus delivered six A321neos during 2019 and ended the year with a fleet of 259 aircraft. JetBlue expects a maximum of 11 A320 deliveries in 2020 and one A220 delivery by the end of 2020. Capacity is projected to grow between 1.5% and 3.5% year-on-year during the first quarter. JetBlue expects capacity to grow between 5.5% and 7.5% during fiscal 2020.
JP Morgan analyst Jamie Baker states in a research note that the carrier’s guidance for the first quarter is “a bit soft, which may contribute to full-year skepticism,” giving the stock an “overweight” rating.