NEW YORK, Oct. 24, 2006 (PRIMEZONE) -- JetBlue Airways Corporation (Nasdaq:JBLU) today reported its results for the third quarter 2006:
-- Operating revenues for the quarter totaled $628 million,
representing growth of 38.7% over operating revenues of
$453 million in the third quarter of 2005.
-- Operating income for the quarter was $41 million, resulting in
a 6.6% operating margin, compared to operating income of
$14 million and a 3.1% operating margin in the third quarter
of 2005.
-- Pre-tax income for the quarter was $1.3 million, compared with a
loss of $3.7 million in the year ago period.
-- Net loss for the quarter was $0.5 million, representing
earnings of $0.00 per diluted share, compared with third quarter
2005 net income of $2.7 million, or $0.02 per diluted share.
"Results this quarter demonstrate our crewmembers' success in their ongoing focus on cost control, as we work to maximize productivity and institutionalize low-cost carrier spending habits throughout our airline. Unfortunately, the revenue environment during the quarter remained challenging as we continued our new market expansion and saw lower than expected overall demand due in part to security related concerns," said David Neeleman, CEO of JetBlue. "The company has made the prudent decision to reduce our rate of growth over the next three years through a reduction in both our Airbus 320 fleet and our EMBRAER 190 fleet. We believe this will enable us to be more strategic about our aircraft deployment, generate a higher level of earnings, strengthen our balance sheet and improve our cash position. With revised capacity next year expected to increase between 14 and 17 percent, we remain committed to profitable growth and to bringing our high quality product to new and existing customers." Specific information will be available at a later point in time.
Dave Barger, JetBlue's COO and President, commented, "We're excited about the opportunities ahead following a reduction in our rapid rate of growth. Importantly, we intend to achieve this revision while working hard to preserve and improve our internal culture, which remains our single greatest asset."
During the third quarter of 2006, JetBlue achieved a completion factor of 99.6 % of scheduled flights versus 99.4% in the third quarter of 2005. On-time performance, defined by the US Department of Transportation as arrivals within 14 minutes of schedule, was 74.6% in the third quarter of 2006 compared to 72.2% for the same period in 2005. The company attained a load factor in the third quarter of 2006 of 80.4%, a decrease of 6.2 points on a capacity increase of 19.0% over the third quarter of 2005.
For the third quarter, yield per passenger mile was 9.72 cents, up 23.5% compared to 2005. Operating revenue per available seat mile (RASM) increased 16.5% year-over-year to 8.33 cents. Revenue passenger miles increased 10.5% from the third quarter of 2005 to 6.1 billion. Available seat miles grew 19.0% to 7.54 billion. Operating expenses for the third quarter were $587 million, up 33.7% from the third quarter of 2005. Operating expense per ASM (CASM) for the third quarter 2006 increased 12.3% year-over-year to 7.79 cents, while average stage length decreased 18.2%. Excluding fuel, CASM increased 4.7% to 4.98 cents. During the quarter, realized fuel price was $2.12 per gallon, a 24.3% increase over third quarter 2005 realized fuel price of $1.70. JetBlue ended the third quarter with $456 million in cash and investment securities.
Looking ahead, for the fourth quarter of 2006, JetBlue expects to report an operating margin between six and eight percent assuming an all-in aircraft fuel cost per gallon of $1.94. Pre-tax margin for the quarter is expected to be between one and three percent. Cost per available seat mile (CASM) is expected to increase between six and eight percent over the year-ago period, at the assumed $1.94 aircraft fuel cost per gallon. Excluding fuel, CASM in the fourth quarter is expected to increase between five and seven percent year over year. Capacity is expected to increase between 13 and 15 percent in the fourth quarter and stage length is expected to decrease roughly 18% over the same period last year.
JetBlue will conduct a conference call to discuss its quarterly earnings today, October 24, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the World Wide Web at http://investor.jetblue.com.
About JetBlue
In the six years since its launch, JetBlue Airways has focused on creating a new airline category -- an airline that offers value, service and style. Based out of New York City, the low-cost carrier currently serves 47 destinations with up to 470 flights daily. Onboard JetBlue, customers enjoy roomy leather seats and 36 channels of free DIRECTV(r) programming (See note), the most live TV available on any airline. On flights longer than two hours, a selection of first-run movies and bonus features from FOX InFlight(tm) is also available. JetBlue offers customers generous brand name snacks and beverages, including freshly brewed Dunkin' Donuts(r) coffee, and delicious wines selected by the airline's Low Fare Sommelier, Josh Wesson from Best Cellars(r). On overnight flights from the West, the airline now offers Shut-Eye Service(tm), with a comfort kit designed exclusively for JetBlue by Bliss Spa and other special amenities including a "good morning" hot towel service. With JetBlue, all seats are assigned, all travel is ticketless, all fares are one-way, and an overnight stay is never required. For information or reservations call 1-800-JETBLUE (1-800-538-2583) or visit www.jetblue.com.
The JetBlue logo is available at http://www.primezone.com/newsroom/prs/?pkgid=795
Note: DIRECTV(r) service is not available on flights outside the continental United States; however, where applicable FOX InFlight(tm) is offered complimentary on these routes. FOX InFlight(tm) is a trademark of Twentieth Century Fox Film Corporation. JetBlue's in-flight entertainment is powered by LiveTV, a wholly owned subsidiary of JetBlue.
This press release contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, our extremely competitive industry; increases in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy, including the integration of the EMBRAER 190 aircraft into our operations; our significant fixed obligations; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market; our reliance on automated systems and technology; our being subject to potential unionization; our reliance on a limited number of suppliers; changes in or additional government regulation; changes in our industry due to other airlines' financial condition; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to, the Company's 2005 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- Percent ---------------- Percent
2006 2005 Change 2006 2005 Change
------- ------- ------ ------- ------- ------
OPERATING
REVENUES
Passenger $ 589 $ 432 36.5 $ 1,631 $ 1,200 35.9
Other 39 21 82.6 99 55 77.5
------- ------- ------- -------
Total operating
revenues 628 453 38.7 1,730 1,255 37.8
OPERATING EXPENSES
Salaries, wages
and benefits 140 108 29.3 406 312 30.2
Aircraft fuel 212 138 53.5 564 336 68.0
Landing fees and
other rents 42 27 53.8 117 80 45.7
Depreciation and
amortization (a) 32 30 8.8 103 81 28.5
Aircraft rent 27 18 49.5 74 54 36.8
Sales and
marketing 27 22 23.1 77 61 24.8
Maintenance
materials and
repairs 22 19 11.5 66 47 40.1
Other operating
expenses 85 77 11.5 260 205 26.7
------- ------- ------- -------
Total operating
expenses 587 439 33.7 1,667 1,176 41.7
------- ------- ------- -------
OPERATING INCOME 41 14 197.4 63 79 (20.8)
Operating
margin 6.6% 3.1% 3.5 pts. 3.6% 6.3% (2.7)pts.
OTHER INCOME
(EXPENSE)
Interest expense (45) (28) 58.3 (124) (74) 66.9
Capitalized
interest 7 3 85.6 19 11 67.7
Interest income
and other (2) 7 (130.8) 21 15 39.9
------- ------- ------- -------
Total other
income
(expense) (40) (18) 127.4 (84) (48) 75.3
------- ------- ------- -------
INCOME (LOSS)
BEFORE INCOME
TAXES 1 (4) (21) 31
Income tax
expense
(benefit) 1 (7) (3) 9
------- ------- ------- -------
NET INCOME
(LOSS) $ -- $ 3 $ (18) $ 22
======= ======= ======= =======
EARNINGS (LOSS)
PER COMMON
SHARE:
Basic $ -- $ 0.02 $ (0.11) $ 0.14
======= ======= ======= =======
Diluted $ -- $ 0.02 $ (0.11) $ 0.13
======= ======= ======= =======
Weighted average
shares outstanding
(thousands):
Basic 175,569 158,041 174,538 157,313
Diluted 175,569 166,239 174,538 165,856
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, June 30,
---------------- Percent ---------------- Percent
2006 2005 Change 2006 2005 Change
------- ------- ------- ------- ------- -------
Revenue passengers
(thousands) 4,773 3,783 26.2 13,633 10,879 25.3
Revenue passenger
miles (millions) 6,062 5,484 10.5 17,522 15,043 16.5
Available seat
miles (ASMs)
(millions) 7,537 6,332 19.0 21,316 17,347 22.9
Load factor 80.4% 86.6% (6.2)pts 82.2% 86.7% (4.5)pts
Breakeven load
factor (b) 79.7% 87.4% (7.7)pts 83.3% 84.2% (0.9)pts
Aircraft
utilization
(hours per day) 12.7 13.7 (6.9) 12.9 13.6 (5.2)
Average fare $123.41 $114.08 8.2 $119.63 $110.28 8.5
Yield per
passenger
mile (cents) 9.72 7.87 23.5 9.31 7.97 16.7
Passenger revenue
per ASM (cents) 7.82 6.82 14.7 7.65 6.92 10.6
Operating revenue
per ASM (cents) 8.33 7.15 16.5 8.11 7.24 12.1
Operating expense
per ASM (cents) 7.79 6.93 12.3 7.82 6.78 15.3
Operating expense
per ASM, excluding
fuel (cents) 4.98 4.75 4.7 5.17 4.84 6.8
Airline operating
expense per ASM
(cents)(b) 7.74 6.87 12.6 7.76 6.72 15.5
Departures 42,311 28,104 50.6 114,416 81,123 41.0
Average stage
length (miles) 1,181 1,444 (18.2) 1,224 1,371 (10.7)
Average number of
operating aircraft
during period 112.0 79.2 41.5 103.4 74.8 38.2
Average fuel cost
per gallon $ 2.12 $ 1.70 24.3 $ 2.02 $ 1.52 33.3
Fuel gallons
consumed
(millions) 100 81 23.6 279 222 26.0
Percent of sales
through
jetblue.com
during period 78.7% 77.7% 1.0 pts 80.1% 77.2% 2.9 pts
Full-time
equivalent
employees at
period end (b) 9,223 7,452 23.8
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
September 30, December 31,
2006 2005
------------- ------------
Cash, cash equivalents and
investment securities $ 456 $ 484
Total assets 4,429 3,892
Total debt, including capital
lease obligation 2,560 2,326
Stockholders' equity 917 911
NON-GAAP FINANCIAL MEASURES (c)
(in millions, except as otherwise noted)
Three Months Nine Months
Ended Ended
September 30, September 30,
2006 2006
------------ ------------
Fuel Neutral Operating Expenses
to Prior Period
Operating expenses as reported $ 587 $ 1,667
Less: Reported aircraft fuel (212) (564)
Add: Aircraft fuel at prior
period cost per gallon 171 423
Profit sharing impact 6 18
------------- ------------
Fuel neutral operating expenses 552 1,544
Fuel neutral operating margin 12.1% 10.7%
Fuel neutral operating expense
per ASM (cents) 7.32 7.24
Three Months Ended
September 30, 2006
$ CASM
------------- ------------
(cents)
Operating Expenses per ASM, Excluding
Fuel and Gain on Sale of Aircraft
Operating expenses as reported 587 7.79
Add: Gain on sale of aircraft 7 0.09
------------- ------------
Operating expenses excluding
gain on sale of aircraft 594 7.88
Less: Reported aircraft fuel (212) (2.81)
------------- ------------
Operating expenses excluding
fuel and gain on sale of
aircraft 382 5.07
(a) During the three months ended September 30, 2006, we sold two
Airbus A320 aircaft resulting in a gain of $7 million.
(b) Excludes operating expenses and employees of LiveTV, LLC,
which are unrelated to our airline operations.
(c) In management's view, comparative analysis of period-to-period
operating results can be enhanced by excluding the gain on the
sale of aircraft and the significant volatility in the price of
aircraft fuel, the latter of which is subject to many economic
and political factors that are beyond our control, in addition to
the impact of hedging activities. We believe that the
presentation of these non-GAAP financial measures is useful to
management and investors because it is more indicative of our
ability to manage our costs and also assists in understanding the
significant impact that fuel prices have had, and continue to
have, on our operations. Investors should consider these non-GAAP
financial measures in addition to, and not as a substitute for,
our financial performance measures prepared in accordance with
GAAP.