JetBlue Airways (JBLU): A look at the airline’s expectations for the coming quarter

Shares of JetBlue Airways Corp. (NASDAQ: JBLU) stayed in green territory on Tuesday. The stock has dropped 23% year-to-date and 46% over the past 12 months. After a tough couple of years, airlines are seeing strong demand but inflation and higher fuel costs continue to act as headwinds. Last week, JetBlue provided updated guidance for the second quarter of 2022. Here’s a look at the airline’s expectations:

Revenue

In the first quarter of 2022, JetBlue’s total operating revenues more than doubled year-over-year to $1.73 billion, helped by increases in passenger and other revenues. However, revenues declined 7.2% compared to the same period in 2019.

The company continues to see a strong demand environment with bookings exceeding its expectations. It has seen a meaningful pickup in revenue during June compared to earlier months and expects revenue per available seat mile for the month to be up more than 20% year over three. For the second quarter of 2022, JetBlue had guided for revenue growth of 11-16% year over three and now expects to be at or above the high end of this guidance range.

Capacity

In Q1 2022, capacity increased 69% year-over-year. Capacity declined by 0.3% year over three during the quarter compared to the company’s guidance for a decline of 1% year over three. JetBlue had earlier guided for capacity to increase 0-3% year over three for the second quarter of 2022. The company has seen a steady improvement in its operational performance since early April.

Despite weather and air traffic control disruptions causing headwinds for the industry, JetBlue’s completion factor in May was trending above 98% compared to around 90% during the first three weeks of April. Due to this, the company now expects to see a 2-3% increase in flown capacity during the second quarter of 2022 compared to the same period in 2019.

Expenses

During Q1 2022, operating expenses per available seat mile, excluding fuel, (CASM ex-fuel) declined 19.4% year-over-year. CASM ex-fuel increased 13.9% year over three compared to the company’s guidance for an increase of 13-15% year over three. The realized fuel price in Q1 was $2.90 per gallon, up 41% from the same period in 2019.

JetBlue continues to expect CASM ex-fuel for Q2 2022 to increase between 15-17% year over three. The company expects an average all-in price per gallon of fuel of $4.08 in the second quarter versus the previous estimate of $3.79.

Click here to read the full transcript of JetBlue Airways’ Q1 2022 earnings conference call