JetBlue Airways, the airline with the largest presence in Puerto Rico, expects the island’s recovery from Hurricane Maria to last through the end of 2018 and will adjust its operations until then, trimming capacity to/from the US territory by about 33%.

The assessment came as New York-based JetBlue reported a third-quarter year-over-year (YOY) net profit decline of 10.2% after hurricanes Irma and Maria severely affected the carrier, which has large exposure in both Florida and the Caribbean.

JetBlue president and CEO Robin Hayes told analysts in a conference call that the hurricane activity during the third quarter was “unprecedented” for the carrier, leading to “over 30 days of irregular operations” and 2,500 canceled flights attributed to Irma and Maria. JetBlue is “well into the recovery process” and “data suggests Florida bookings will return to normal by November,” Hayes said.

Hayes has visited Puerto Rico twice since Maria to assess the situation, and believes “many months” of recovery are still ahead there. About 6% of JetBlue’s total capacity is dedicated to San Juan, Puerto Rico, and the airline has “many crew members, customers and their families” who have been affected by Maria and its aftermath, Hayes noted.

JetBlue believes about one-third of its capacity to/from San Juan is leisure and two-thirds is visiting friends and family (VFR). Airline executives assess that VFR traffic will largely remain intact as the island goes through its recovery, but leisure traffic will be nonexistent for more than a year.

“Our strategy is basically to redeploy the leisure capacity in San Juan” to elsewhere in the Caribbean through 2018, JetBlue EVP-commercial and planning Marty St. George said. “We are very confident about our options to redeploy that capacity … We do expect that capacity will go back to Puerto Rico … We have been the largest airline in the commonwealth for a while. We have a very strong franchise down there and we want to be there as the island recovers.”

St. George said JetBlue will start by moving fourth-quarter holiday leisure capacity that had been targeted for Puerto Rico to other points in the Caribbean. The airline has not yet announced specifically where in the Caribbean the capacity will be shifted. “The majority of the Caribbean is open for travel,” St. George said.

He emphasized that while the capacity shift is expected to last into the 2018 fourth quarter, JetBlue is thinking of it as temporary. “We believe Puerto Rico will be open for business by the end of 2018,” St. George said.

The capacity shift amounts to about 2% of JetBlue’s total system capacity. “We are adjusting the business following the two hurricanes in a balanced and prudent way,” Hayes said.

JetBlue posted third-quarter net income of $179 million, down 10.2% from a net profit of $199 million in the 2016 September period, as revenue rose 4.7% YOY to $1.8 billion and expenses increased 9.1% to $1.5 billion. Operating income declined 12.4% YOY to $310 million and pre-tax operating margin was down 2.9 percentage points to 16.2%.

JetBlue CFO Steve Priest said it was “an unusual third quarter to say the least,” estimating that the hurricanes reduced the carrier’s pre-tax margin by 1.4 points.

The airline’s third-quarter traffic rose 2.3% YOY to 12.2 billion RPMs while capacity increased 3.7% to 14.3 billion ASMs, leading to a load factor of 85.1%, down 1.2 points.

Aaron Karp aaron.karp@penton.com