JetBlue Airways reported a huge loss in the third quarter compared to last year, but the New York operator said strong travel demand is helping to cover the loss of fuel prices more because it seeks to calm investors after the shares fell to a new low.
Shares of JetBlue rose about 11% in after-hours trading Monday.
JetBlue posted a net loss of $257 million for the three months ended September 30, compared with a loss of $143 million in the previous year. The carrier’s fuel bill rose 61% to $868 million.
“Resilient demand and strong results drove earnings ahead of initial expectations, allowing us to recover from higher-than-expected increases in fuel costs,” CEO Joanna Geraghty said in an earnings release. “That momentum has carried over into the fourth quarter, and Fort Lauderdale continues to deliver outstanding results even as we increase capacity.”
JetBlue’s average fare rose more than 19% to $245.11 in the third quarter from $205.67 in the prior period.
JetBlue executives are set to hold an earnings call on Tuesday at 10 a.m. ET, where they will face questions from analysts about the company’s long-term health amid continued losses. The airline’s group of senior creditors is reportedly working with restructuring advisers PJT partnerThe Wall Street Journal reported on Friday.
The carrier said it ended the quarter with $2.2 billion in liquidity and a current unencumbered asset base of $7 billion, including $2.8 billion in aircraft and engines.
JetBlue has total debt of $8.4 billion as of September 30, the operator said in earnings on Friday.
“Importantly, we believe we have the liquidity and funding options to build a strong bridge to at least $1 EPS and positive free cash flow by 2028,” CFO Ursula Hurley said in a statement. “We remain focused on disciplined cost execution and capital management as we strive for sustainable profitability and positive free cash flow.”
Here’s what JetBlue reported in the third quarter compared to Wall Street estimates compiled by LSEG:
- Loss per share: 60 cents adjusted vs loss of 55 cents expected
- result: $2.81 billion vs $2.82 billion expected
JetBlue last reported annual profit in 2019. The airline is in the midst of a multiyear turnaround plan that includes cutting back and increasing revenue by investing in premium seats, like the new domestic first-class section it recently sold.
Fuel costs have hurt airline profits across the board. JetBlue said travel demand remains strong despite higher fares, which are up more than 20% this year.
JetBlue has struggled not only with higher costs but also with competition from larger rivals.
He sought to acquire the now-defunct carrier Spirit Airlines, but the deal was struck down by a federal judge who ruled it was anticompetitive. A judge also blocked the regional partnership between JetBlue and American Airlineswhich the airline says will help it compete better with carriers in the crowded U.S. Northeast JetBlue now has a partnership with United Airlines.