JetBlue Profit Doubles on Lower Fuel Costs, New Price Systemby
JetBlue Airways Corp.’s fourth-quarter profit doubled as the carrier spent less on jet fuel and reaped better-than-expected sales gains from a new pricing system.
Earnings excluding some items were $190 million, or 56 cents a share, the airline said in a statement Thursday, exceeding the 52-cent average of 15 analyst estimates compiled by Bloomberg. Tumbling oil prices reduced JetBlue’s fuel spending 31 percent.
JetBlue’s focus on U.S. and Caribbean markets shielded it from the currency swings and decreased international demand that hurt bigger carriers. Price wars in some domestic markets contributed to a 3.6 percent drop in JetBlue’s average fare per mile. The decline was more than offset by a 12 percent gain in passenger traffic.
The shares fell 6.3 percent to $19.92 at the close in New York, tracking other airline stocks as crude climbed on a report about possible talks to trim production. OPEC delegates said no discussions were planned. It was the largest one-day decline for JetBlue since Dec. 11.
Sales increased 10 percent to $1.59 billion, topping the $1.58 billion predicted by analysts. The June introduction of a fee for passengers’ first checked bags contributed to the sales gain. More customers bought higher fare packages and checked bags under the airline’s new three-tiered Fare Options system than had been expected, executives said on a conference call with analysts.
JetBlue this week joined other airlines by saying it would put more seats into its planes. The carrier will add 12 seats to its Airbus Group SE A320 aircraft as it renovates the interiors starting next year. JetBlue earlier planned to add 15 seats to the 150 installed in the current configuration of the model, which accounts for most of the airline’s fleet.
The carrier starting this year will put 10 more seats on its all-coach A321s, which currently have 190. Reduced per-seat costs from the expansions on both models will be partly offset by the required addition of a flight attendant on each jet.