JetBlue earns $3 million in first quarter despite higher fuel prices, weather

JetBlue Airways A320. Photo: By Rob Finlayson.

JetBlue Airways overcame soaring fuel prices and severe winter weather on the East Coast to eke out a modest net profit of $3 million in the three months ended March 31, a $4 million positive swing from a loss of $1 million in the year-ago period.

"Despite significantly higher fuel prices, we are pleased to report a profit in the first quarter," President and CEO Dave Barger said. Operating revenues surged 16.3% to $1.01 billion, "as a stronger fare environment contributed to significant year-over-year revenue gains," Barger told analysts during a conference call that was also webcast.

Operating expenses, propelled by a 34.5% rise in the cost of a gallon of fuel, jumped 16.8% to $967 million. Operating profit climbed 5.5% to $45 million from $43 million but EBIT margin slipped 0.5 points to 4.4%. B6 said it hedged approximately 37% of its fuel consumption in the first quarter and recorded $2 million in gains from hedges. It has hedged 43% of projected second-quarter fuel requirements and 35% of remaining 2011 estimated requirements.

The carrier flew 6.92 billion RPMs in the period, up 7%, on just a 1% rise in capacity to 8.5 billion ASMs, pushing load factor up 4.6 points to 81.4%. Yield was 13.08 cents, up 7.7% while passenger RASM climbed 14.1% to 10.64 cents and total RASM rose 15.1% to 11.89 cents.

Cost per ASM rose 15.6% to 11.37 cents, but 6.1% ex-fuel to 7.22 cents. Part of the CASM rise was attributed to severe winter weather that resulted in B6 flying approximately 1% less capacity in February. For the second quarter ending June 30, CASM is expected to rise 18%-20% over the year-ago period but 3%-5% ex-fuel on a 7%-9% rise in capacity. Capacity is forecast to be up 6%-8% for the full year, which represents a 1% reduction from guidance in January. It will be reduced primarily by trimming utilization and day of week pull-downs, Barger said.

JetBlue added one Embraer E-190 and two Airbus A320s during the quarter. It will take two more A320s and four additional E-190s this year while returning a leased E-190. It expects to end the year with 169 aircraft, comprising 120 A320s and 49 E-190s. It has exercised an option to opt out of two E-190s scheduled to arrive in 2013, leaving deliveries that year of five E-190s and seven A320s that year.