NEW YORK, Oct. 23, 2008 (GLOBE NEWSWIRE) -- JetBlue Airways Corporation (Nasdaq:JBLU) today reported its results for the third quarter 2008:
-- Operating revenues for the quarter totaled $902 million,
representing growth of 17.9% over operating revenues of $765
million in the third quarter of 2007.
-- Operating income for the quarter was $22 million, resulting in
a 2.4% operating margin, compared to operating income of $79
million and a 10.3% operating margin in the third quarter of 2007.
-- Pre-tax loss for the quarter was $4 million, compared with
pre-tax income of $46 million in the year-ago period.
-- Net loss for the quarter was $4 million, representing a net loss
of $0.02 per diluted share, compared with third quarter 2007 net
income of $23 million, or $0.12 per diluted share.
"We are pleased to report record revenue during the third quarter," said Dave Barger, JetBlue's CEO. "High fuel prices, however, continued to be a challenge during the quarter. While fuel prices have dropped dramatically in recent weeks, we are focused on the turmoil in the financial markets and the economic challenges that lie ahead. Despite the economic uncertainty, we see continued strength in our bookings in the near-term. We believe our strong brand, award-winning service and outstanding crewmembers will help us better manage through these challenging times."
Operational Performance
For the third quarter, revenue passenger miles remained flat at 6.8 billion on a capacity decrease of 2.4%, resulting in a third quarter load factor of 84.0%, an increase of 2.0 points year-over-year. Yield per passenger mile in the third quarter was 11.78 cents, up 13.2% compared to the third quarter of 2007. Passenger revenue per available seat mile (PRASM) for the third quarter 2008 increased 16.0% year-over-year to 9.89 cents and operating revenue per available seat mile (RASM) increased 20.8% year-over-year to 11.07 cents.
JetBlue's operating expense per available seat mile (CASM) for the third quarter increased 31.5% year-over-year to 10.80 cents. Excluding fuel, CASM increased 13.8% to 5.96 cents. During the quarter, JetBlue hedged approximately 45% of its fuel consumption resulting in a realized fuel price of $3.42 per gallon, a 60.8% increase over third quarter 2007 realized fuel price of $2.13. JetBlue realized $26 million in fuel hedging gains during the third quarter. Of this total, $1 million are unrealized gains which relate to fuel hedges for the fourth quarter 2008 and beyond which were required to be recognized in the third quarter and $3 million are related to other settlements in the third quarter.
Balance Sheet Update
JetBlue ended the third quarter with approximately $565 million in cash and cash equivalents and $305 million of auction rate securities. JetBlue has an additional $110 million available under its line of credit with Citigroup, which is secured by a portion of JetBlue's auction rate securities.
During the quarter, JetBlue repurchased $53 million of its $250 million 3.75% convertible notes due 2035 (which have a put date of March 2010) for $40 million. JetBlue repurchased an additional $20 million principal amount of these notes for $14 million in October. As a result of these repurchases, JetBlue reduced the outstanding principal amount of these notes from $250 million to $177 million.
"Market conditions created a unique opportunity for us to retire debt and lower future interest expense," said Ed Barnes, JetBlue's CFO. "With our focus on revenue enhancements, cost control, capacity rationalization and liquidity preservation, we believe that we are well-positioned to withstand today's uncertainty."
Fourth Quarter and Full Year Outlook
Looking ahead, for the fourth quarter of 2008, JetBlue expects to report an operating margin between five and seven percent based on an assumed aircraft fuel cost per gallon of $2.81, net of hedges. Pre-tax margin for the quarter is expected to be between one and three percent. PRASM is expected to increase between 18 and 20 percent year-over-year. RASM is expected to increase between 23 and 25 percent year-over-year. CASM is expected to increase between 20 and 22 percent over the year-ago period. Excluding fuel, CASM in the fourth quarter is expected to increase between 17 and 19 percent year-over-year. Capacity is expected to decrease between seven and nine percent in the fourth quarter and stage length is expected to decrease roughly five percent over the same period last year.
For the full year 2008, JetBlue expects to report an operating margin between two and four percent based on an assumed aircraft fuel cost per gallon of $3.02, net of hedges. Pre-tax margin for the full year is expected to be between negative one and one percent. PRASM for the full year is expected to increase between 14 and 16 percent year-over-year. RASM for the full year is expected to increase between 18 and 20 percent year-over-year. CASM for the full year is expected to increase between 21 and 23 percent over full year 2007. Excluding fuel, CASM in 2008 is expected to increase between eight and ten percent year-over-year. Capacity for the full year 2008 is expected to increase between zero and two percent over 2007 and stage length is expected to decrease about one percent over full year 2007.
JetBlue will conduct a conference call to discuss its quarterly earnings today, October 23, at 9:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
About JetBlue
New York-based JetBlue Airways has created a new airline category based on value, service and style. Known for its award-winning service and free TV as much as its low fares, JetBlue is now pleased to offer customers Lots of Legroom and super-spacious Even More Legroom seats. JetBlue introduced complimentary in-flight e-mail and instant messaging services on aircraft "BetaBlue," a first among U.S. domestic airlines. JetBlue is also America's first and only airline to offer its own Customer Bill of Rights, with meaningful and specific compensation for customers inconvenienced by service disruptions within JetBlue's control. Visit www.jetblue.com/promise for details. JetBlue serves 51 cities with 500 daily flights. 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.globenewswire.com/newsroom/prs/?pkgid=795
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 ability to operate reliably the EMBRAER 190 aircraft and our new terminal at JFK; 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 and the effect of increased congestion in this 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 2007 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
2008 2007 Change 2008 2007 Change
------- ------- ------- ------- ------- -------
OPERATING
REVENUES
Passenger $ 807 $ 712 13.2 $ 2,334 $ 1,959 19.1
Other 95 53 80.6 243 144 68.9
------- ------- ------- -------
Total
operat-
ing
revenues 902 765 17.9 2,577 2,103 22.5
OPERATING
EXPENSES
Aircraft
fuel 394 249 58.6 1,072 665 61.3
Salaries,
wages and
benefits 173 159 9.1 519 481 7.9
Landing
fees
and other
rents 52 44 15.8 152 136 11.5
Depreci-
ation
and
amorti-
zation 54 44 20.4 145 129 11.7
Aircraft
rent 33 32 2.8 97 92 5.2
Sales and
marketing 38 32 15.6 118 92 28.2
Maintenance
materials
and
repairs 32 25 30.9 97 78 25.1
Other
operating
expenses 104 101 4.3 317 291 9.1
------- ------- ------- -------
Total
operat-
ing
expenses 880 686 28.3 2,517 1,964 28.1
------- ------- ------- -------
OPERATING
INCOME 22 79 (72.8) 60 139 (56.7)
Operating
margin 2.4% 10.3% (7.9) pts. 2.3% 6.6% (4.3) pts.
OTHER INCOME
(EXPENSE)
Interest
expense (64) (58) 9.2 (173) (166) 4.2
Capitalized
interest 15 11 29.8 43 30 42.5
Interest
income
and
other 23 14 65.4 43 41 4.1
------- ------- ------- -------
Total
other
income
(expense) (26) (33) (21.2) (87) (95) (7.8)
------- ------- ------- -------
INCOME
(LOSS)
BEFORE
INCOME
TAXES (4) 46 (27) 44
Pre-tax
margin (0.5)% 6.0% (6.5) pts. (1.1)% 2.1% (3.2) pts.
Income tax
expense
(benefit) -- 23 (8) 22
------- ------- ------- -------
NET INCOME
(LOSS) $ (4) $ 23 $ (19) $ 22
======= ======= ======= =======
EARNINGS
(LOSS)
PER
COMMON
SHARE:
Basic $ (0.02) $ 0.13 $ (0.08) $ 0.12
======= ======= ======= =======
Diluted $ (0.02) $ 0.12 $ (0.08) $ 0.12
======= ======= ======= =======
Weighted
average
shares
outstand-
ing
(thou-
sands):
Basic 225,927 180,154 221,875 179,298
Diluted 225,927 198,776 221,875 184,104
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- Percent ----------------- Percent
2008 2007 Change 2008 2007 Change
-------- -------- -------- -------- -------- --------
Revenue
passengers
(thousands) 5,657 5,528 2.3 16,812 16,206 3.7
Revenue
passenger
miles
(millions) 6,848 6,848 0.0 20,167 19,526 3.3
Available
seat
miles
(ASMs)
(millions) 8,154 8,355 (2.4) 24,932 23,791 4.8
Load factor 84.0% 82.0% 2.0 pts. 80.9% 82.1% (1.2)pts.
Breakeven
load
factor (a) 89.7% 78.0% 11.7 pts. 85.3% 81.5% 3.8 pts.
Aircraft
utilization
(hours per
day) 11.7 13.0 (9.9) 12.4 12.9 (4.1)
Average
fare $ 142.55 $ 128.83 10.7 $ 138.80 $ 120.87 14.8
Yield per
passenger
mile (cents) 11.78 10.40 13.2 11.57 10.03 15.3
Passenger
revenue per
ASM (cents) 9.89 8.52 16.0 9.36 8.23 13.7
Operating
revenue per
ASM (cents) 11.07 9.16 20.8 10.34 8.84 16.9
Operating
expense per
ASM (cents) 10.80 8.22 31.5 10.10 8.26 22.3
Operating
expense per
ASM,
excluding
fuel (cents) 5.96 5.24 13.8 5.80 5.46 6.1
Airline
operating
expense per
ASM (cents)
(a) 10.56 8.11 30.3 9.87 8.17 20.8
Departures 51,125 50,233 1.8 155,626 146,320 6.4
Average
stage
length
(miles) 1,132 1,161 (2.4) 1,134 1,128 0.5
Average
number
of
operating
aircraft
during
period 142.2 130.7 8.8 139.4 126.3 10.3
Average
fuel
cost per
gallon $ 3.42 $ 2.13 60.8 $ 3.08 $ 2.01 53.2
Fuel
gallons
consumed
(millions) 115 117 (1.3) 348 331 5.3
Percent of
sales
through
jetBlue.com
during
period 76.9% 74.5% 2.4 pts. 76.9% 75.0% 1.9 pts.
Full-time
equivalent
employees
at period
end (a) 9,398 9,301 1.0
(a) Excludes operating expenses and employees of LiveTV, LLC,
which are unrelated to our airline operations.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
September 30, December 31,
2008 2007
------------- -------------
Cash and cash equivalents $ 565 $ 190
Total investment securities 305 644
Total assets 6,084 5,598
Total debt 3,135 3,048
Stockholders' equity 1,281 1,036