Higher passenger revenue and increases in baggage and other fees are likely to fuel total revenue growth in the fourth quarter. JetBlue expects revenue per available seat mile (RASM) to increase around 2.4% year-over-year in the fourth quarter.
The company has been taking measures to cut costs and these efforts are likely to lower non-fuel unit costs. This reduction in costs will benefit earnings during the fourth quarter. However, compared to the prior-year quarter, fuel prices are likely to be quite high in the fourth quarter and this might weigh on earnings.
JetBlue Q3 earnings top estimates while revenues come in line
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JetBlue expects the average price per gallon of fuel to be $2.48 in the fourth quarter, which is much higher than $1.89 in the year-ago period. The company also faces tough competition in the airline industry.
During its third-quarter results announcement, JetBlue guided for capacity growth of 7.5% to 9.5% on a year-over-year basis for the fourth quarter. The company expects RASM to grow 1-4% and CASM, ex-fuel, to decrease 1.5% to 3.5%.
JetBlue’s peers American Airlines (AAL) and Southwest Airlines (LUV) are also expected to report their fourth-quarter results on January 24.