JetBlue reports second quarter results

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By admin July 28, 2016 20:06

JetBlue reports second quarter results

JetBlue has reported second quarter operating revenues of $1.6 billion. Revenue passenger miles for the second quarter increased 10.3% to 11.6 billion on a capacity increase of 11.1%, resulting in a second quarter load factor of 85.0%, a 0.6 point decrease year over year.

Yield per passenger mile in the second quarter was 12.87 cents, down 9.9% compared to the second quarter of 2015. Passenger revenue per available seat mile (PRASM) for the second quarter 2016 decreased 10.5% year over year to 10.94 cents and operating revenue per available seat mile (RASM) decreased 8.2% year over year to 12.09 cents.

Compared with last year, operating expenses for the quarter were essentially flat. Interest expense for the quarter declined 12.8%, or $4 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the second quarter decreased 9.9% year over year to 9.78 cents. Excluding fuel and profit sharing, second quarter CASM1 decreased 1.0% to 7.48 cents.

“I would like to thank our crewmembers for delivering another great quarter. Looking ahead, we are excited about our growth opportunity in the transcontinental market, where Mint has a successful track record of delivering a great product, amazing service, stimulating premium demand and meaningfully improving unit revenue” said Robin Hayes, JetBlue’s President and CEO.

JetBlue had no fuel hedges in place covering second quarter 2016 consumption. The realized fuel price in the quarter was $1.43 per gallon, a 32.8% decrease versus second quarter 2015 realized fuel price of $2.13.

JetBlue has hedged approximately 24% of its third quarter 2016 projected fuel consumption using jet fuel swaps. Based on the fuel curve as of July 15, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.52 in the third quarter. For the fourth quarter, JetBlue has hedged approximately 26% of projected fuel consumption.

JetBlue ended the quarter with $1.5 billion in unrestricted cash and short term investments, or about 23% of trailing twelve month revenue. In addition, JetBlue maintains approximately $600 million in undrawn lines of credit.

During the second quarter, JetBlue repaid $36 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $367 million in regularly scheduled debt and capital lease obligations during the remainder of 2016 and plans to continue to opportunistically prepay other debt and leases. JetBlue expects to pay approximately $61 million in regularly scheduled debt and capital lease obligations in the third quarter of 2016. Given the strength of its cash from operations, JetBlue anticipates it will pay cash for its remaining six 2016 deliveries from Airbus.

“We posted strong second quarter results driven by a remarkable cost performance. Our strong balance sheet and improved returns provide the confidence to invest in RASM and EPS accretive initiatives such as Mint to continue to drive long term shareholder value” said Mark Powers, JetBlue’s Chief Financial Officer.

For the third quarter of 2016, year over year CASM excluding fuel and profit sharing is expected to grow between 1% and 3%. For the full year 2016, JetBlue continues to expect year over year CASM excluding fuel and profit sharing to grow between zero and 1.5%.

In the third quarter 2016, capacity is expected to increase between 5.5% and 7.5%. For the full year 2016, JetBlue continues to expect capacity to increase between 8.0% and 9.5%.

admin
By admin July 28, 2016 20:06