Silhouette of passenger in front of JetBlue Airbus A321neo aircraft spotted on the tarmac of the apron anchored on the passenger jet bridge from Amsterdam International Airport Schiphol AMS EHAM terminal in the Netherlands.
Nikolaos Oikonomou | Nurphoto | Getty Images
JetBlue Airways Shares fell more than 15% on Tuesday after the airline cut revenue forecasts for 2024, a setback as it tries to return to profitability.
The carrier said second-quarter revenue would likely fall as much as 10.5 percent year-on-year, more than double the drop expected by analysts polled by LSEG. New York-JetBlue forecast full-year sales to fall in the low single digits, also below Wall Street expectations, after estimating flat sales for the year in its January report.
JetBlue is on a cost-cutting spree, scrapping unprofitable routes and focusing on those with steady demand and high sales for premium seats. The carrier last month canceled its merger agreement with the financial operator Spirit Airlines after a judge blocked the $3.8 billion deal on antitrust grounds.
Tuesday’s outlook update shows a widening gap between JetBlue and its larger rivals with large international networks such as Delta and Unitedthat predict profits, strong revenues and record demand this summer.
“As we look to the full year, significant increased capacity in our Latin [America] The region, which represents a large portion of JetBlue’s network, will likely continue to pressure revenue and we expect a setback to our full-year expectations,” said Joanna Geraghty, who became CEO in February. in an earnings release. “We have every confidence that continuing to take action on our refocused standalone strategy is the right path to ultimately return to profitability again.”
JetBlue stock is down on Tuesday.
JetBlue is affected by a Pratt & Whitney engine recall that has grounded some of its planes.
“It’s definitely a big hurdle,” Geraghty told CNBC of the engine issue. “Pratt is a good partner. We’ve been focused on trying to make progress on reimbursement with them. We’re not where we need to be … But that’s ultimately what’s holding our growth back.”
Geraghty said the airline expects lower capacity next year.
In an investor presentation on Tuesday, the airline said it was “actively exploring” more cost cuts. JetBlue earlier this year said it would defer $2.5 billion in aircraft spending through the end of the year.
In the first three months of the year, JetBlue lost $716 million, or $2.11 per share, compared with a loss of $192 million, or 58 cents per share, in the same period in 2023.
Adjusting for one-time items, including break-up charges related to the failed Spirit merger, JetBlue lost $145 million, or 43 cents a share, less than an adjusted loss of 52 cents expected by analysts polled by LSEG.
Revenue fell 5.1% from last year to $2.21 billion, meeting LSEG’s revenue expectations.
Bright spots included strong peak travel demand, domestic and European flights “as well as continued strong demand for our premium seating options,” said JetBlue President Marty St. George, who returned to the airline earlier this year.
— CNBC’s Phil LeBeau contributed to this report.