Shares in JetBlue Airways Corp. (NASDAQ:JBLU) climbed Tuesday after the low-cost carrier posted second-quarter earnings that edged past Wall Street estimates.
For the quarter ended June 2018, the airlines posted earnings of US$0.38 per share on revenue of US$1.9bn. The consensus earnings estimate was US$0.36 per share on revenue of US$1.9bn. Revenue grew 4.7% on a year-over-year basis.
The Long Island City, New York carrier's stock rose 1.7% to US$20.14 in premarket trade.
JetBlue and its competitors are struggling with higher jet fuel and other expenses, while travel demand remains robust.
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“Our financial performance was impacted by the holiday calendar, but more importantly, by fuel prices that increased over 40% year over year,” said JetBlue Airways CEO Robin Hayes in a statement.
“The team is focused on mitigating the impact of higher fuel in order to stabilize and improve our margins. We are planning a series of adjustments to both capacity and our ancillary revenue to take effect over the coming months,” he added.
JetBlue, the fifth-largest US airline by traffic, earlier said it aimed to reduce its operational costs by up to US$300mln a year by 2020, including improve maintenance so planes are fixed faster and increase the use of self-service check-ins and bookings for passengers.
The low-cost carrier is in the middle of restructuring its operations and is eliminating several positions through layoffs, buyouts and attrition. The cuts are likely to mostly impact the company's behind-the-scenes operations in New York, not flight crews. The company has 22,000 crew members.
Strong outlook
Looking ahead to the third quarter, JetBlue sees capacity increasing by 7.5% to 9.5%.
“Looking into the third quarter, we expect year over year revenue per available seat mile (RASM) growth to be between flat and plus 3%. RASM continues to be driven by close-in bookings, and we’ve seen strength throughout July,” said Marty St. George, JetBlue’s EVP of commercial and planning.
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