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jetBlue looking at expanding ops. at Newark

jetBlue looking at expanding ops. at Newark

April 27, 2016 By Sebastien

NEW YORK-Cheaper fuel helped JetBlue post a first-quarter profit that beat Wall Street expectations, but average fares fell and the airline gave a weak April forecast for a key revenue figure.
Shares of JetBlue Airways Corp. fell 7 percent before rebounding to close down 4 cents at $20.33 on Tuesday. Shares of most other U.S. airlines also fell for a fourth straight trading session on fears about lower fares.
CEO Robin Hayes told analysts on a conference call that JetBlue was considering increasing service in Newark, New Jersey, when the Federal Aviation Administration eases restrictions on flights at the busy New York City-area airport later this year.
JetBlue tried to buy California-based Virgin America Inc. this month but lost to a $2.6 billion bid from Alaska Air Group Inc. Hayes said that JetBlue was confident enough in its ability to grow on its own that Virgin America became “a nice-to-have rather than a must-have.”
Two other unnamed U.S. airlines also expressed interest in Virgin America but dropped out because of concern they wouldn’t get antitrust approval, according to a Virgin America regulatory filing.
New York-based JetBlue earned $199 million, or 59 cents per share, for the three months ended March 31. A year earlier it earned $137 million, or 40 cents per share.
The results surpassed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 53 cents per share.
Revenue rose 6 percent to $1.62 billion as the airline added flights, leading to a 14 percent increase in passenger traffic.
The average fare dropped 7 percent to $162.06 one way. JetBlue said that a closely watched figure, revenue for every seat flown one mile, would drop about 12.5 percent in April, partly because an early Easter and late Passover shifted some travel to March and May.
Weak forecasts for that revenue figure from United and American helped depress airline stocks Thursday and Friday — a slump that spilled over into Monday.
JetBlue spent 36 percent less on fuel than it did in last year’s first quarter, a savings of $120 million. Labor costs rose 16 percent, an increase of $60 million.
The Charlotte Observer

Filed Under: News

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