JetBlue Airways is taking a brighter-than-expected view of the July-September period as a result of strong demand, low jet fuel prices and improving operational performances.
The Long Island, New York-headquartered carrier released on 4 September updated financial guidance for the third quarter, noting that demand remained strong through the peak of summer air travel.
It also observes that consumers are making more close-in bookings for flights.
“Momentum from earlier in the summer carried forward into August and through the Labor Day holiday, both of which were marked by strength for bookings within 14 days of travel,” JetBlue says.
JetBlue’s strong operational performance in August – a month that was marred last year by disruptive weather events in the Northeast USA – has also boosted the carrier’s expectations for the third quarter.
It now expects passenger capacity as measured in available seat kilometres (ASKs) to be flat-to-up-1% year on year, versus previous capacity guidance range that dipped into negative territory compared with the third quarter of 2024.
The airline also boosted its RASK (revenue per ASK) forecast for the third quarter. It now expects RASK to be down 1.5-4%, rather than a previous forecast of down 2-6%.
Meanwhile, JetBlue amended downward its expected average fuel price range to $2.45-$2.55 from $2.50-2.65, “further improving projected operating expenses”.
While much of the USA’s low-cost sector has been under intense pressure lately, JetBlue executives struck an optimistic tone during the company’s second-quarter earnings call in July.
After a painful period of trimming capacity in an attempt to right-size its business, the airline sees itself entering a new period of long-term growth starting next year.
That growth will be fuelled primarily by significantly better-than-expected aircraft availability, as JetBlue finally sees the “light at the end of the tunnel” regarding long-running Pratt & Whitney geared turbofan engine durability problems. It now forecasts that its fleet of Airbus A320neo-family aircraft will return to full strength by the end of 2027.
Additionally, JetBlue stands to benefit from its new “Blue Skies” interline agreement with major US carrier United Airlines.
JetBlue expects that collaboration to contribute $50 million of EBIT (earnings before interest and taxes) annually through 2027, accelerating its JetForward financial turnaround plan.
