JetBlue Cuts Capacity-Growth Outlook, Citing Bad Weather and Fuel Costs

Dow Jones
3 hours ago
 

JetBlue Airways cut its capacity-growth outlook for the third quarter nearly in half following a summer of bad weather and other operational disruptions.

The airline said Thursday it now expects available seat miles, a metric for passenger capacity, to increase 1.5% to 3.5% during the current quarter. That is a reduction from its prior guidance of 3%-to-6% growth.

JetBlue said it suffered from operational disruption in July and August due to adverse weather conditions and air-traffic-control constraints. Severe airport-weather days across the National Airspace System rose more than 40% compared with the prior three-summer average, it said.

The company said its cancellations related to air-traffic-control issues nearly doubled, which it said reflected its concentration in the Northeast. The disruptions drove higher cost per available seat mile.

The company raised its third-quarter forecast for cost per available seat mile, excluding fuel, to a range of 6%-to-8% growth, compared with its earlier guidance of a 2.5%-to-4.5% increase.

Despite the unexpected challenges, the company said it was still able to raise its guidance for revenue per available seat mile because demand has remained strong, pricing is constructive and management has executed certain commercial actions to help with revenue.

It now expects current-quarter revenue per available seat mile to increase 17% to 20% from the prior year, up from the previous range of 12.5%-to-16.5% growth.

Fuel prices have also remained elevated relative to JetBlue's prior outlook, the company said.

The price of fuel is now anticipated to average $3.96 a gallon during the quarter, up from JetBlue's previous expectation of $3.49 a gallon.

Shares were down 1.1% to $4.33 in premarket trading.

 
 

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