JetBlue `Seriously' Considers Buying Long-Range Airbus A321

  • Carrier doesn't rule out possible wide-bodies in future
  • Airline sees no improvement in second-quarter unit revenue

JetBlue Airways Corp., which plans to add seats to its Airbus Group SE planes, may add a longer range, narrow-body aircraft from the jetmaker and won’t rule out buying wide-body versions.

“The A321LR is something we are looking very seriously at,” JetBlue Chief Executive Officer Robin Hayes said on a conference call Tuesday. “We think the incremental amount of complexity that provides is very manageable.”

While adding twin-aisle planes with greater range “is a much bigger deal,” Hayes said he wouldn’t exclude it as “potentially something further out” for the New York-based airline. 

Airbus in 2014 began discussing plans with airlines for a new variant of the single-aisle A321neo that would feature extra fuel tanks to increase range and could enter service in early 2019. The extended-range A321 would offer 100 nautical miles more than Boeing Co.’s 757-200, and have a similar seat count, with 25 percent lower costs per seat than the 757, Airbus has said.

JetBlue could consider the Airbus A330 or A330neo when it opts to add wide-bodies.

Densifying Planes

The airline has joined other major U.S. carriers in adding seats to planes -- a process known as densification -- to generate more revenue. The airline will add 12 to bring its Airbus A320s’ capacity to 162 passengers, and 10 to its A321s for a total of 200 excluding the Mint first-class cabin.

The effort, part of a broader renovation of its aircraft cabins, is expected to add $100 million of annual operating income once JetBlue is finished in 2019.

JetBlue fell 1.6 percent to $20.04 at 1:13 p.m. in New York. The stock dropped 10 percent this year through Monday. Airbus declined less than 1 percent to close at 58.23 euros in Paris.

The shares declined after the carrier said revenue from each seat flown a mile -- an industry benchmark -- would tumble 12.5 percent in April from a year earlier and fall about 7 percent this quarter, similar to the first three months of 2016. April unit revenue was adversely affected by the shift of Easter to March this year.

The airline’s April outlook “caused an immediate correction in shares (and the sector), despite a quarterly guide that was largely unremarkable from what we’ve learned from others this season,” Jamie Baker, a JPMorgan Chase & Co. analyst, said in a report. The second-quarter forecast “is consistent with the ‘no sequential improvement’ guides from American and United. Why the market opted to treat this as new and/or shocking is unclear to us.”

Net income rose to $199 million, or 59 cents a share, topping the 53-cent average from analysts’ estimates compiled by Bloomberg. Sales of $1.62 billion were shy of the $1.63 billion anticipated by analysts. JetBlue’s per-gallon price for fuel and total other costs per seat flown a mile fell more than expected, said Baker and analyst Helane Becker of Cowen & Co.

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