JetBlue Shares Drop as Revenue Outlook Rise Outweighed by Higher Costs
JetBlue shares fell 3% on Thursday after the airline raised its third-quarter revenue outlook but also increased cost forecasts. The company now expects a year-over-year increase in revenue per available seat mile (RASM) of between 17.0% and 20.0%, up from previous guidance of 12.5% to 16.5%. However, JetBlue raised its operating costs forecast by nearly double the earlier range, anticipating a rise of 6.0% to 8.0% in cost per available seat mile excluding fuel. The airline cited weather disruptions and air traffic control issues as key factors behind increased operational challenges during July and August, particularly affecting operations in the Northeast region where JetBlue has significant presence. Fuel costs were also raised from $3.49 to $3.96 per gallon, while capacity growth projections for available seat miles dropped to 1.5%–3.5%, down from earlier expectations of 3.0%–6.0%. Despite these challenges, JetBlue noted strong travel demand and positive booking trends into the fourth quarter. JetBlue also reduced its capital expenditure guidance by $25 million to approximately $275 million for the year.
Tickers: $JBLU
Topics: airline costs fuel prices operational disruptions revenue guidance