JetBlue Airways (JBLU) Revises 2017 Capacity and Cost Guidance

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February 6, 2017 7:41 AM EST
JetBlue Airways (NASDAQ: JBLU) disclosed in an SEC filing:
On February 6, 2017, JetBlue Airways Corporation (the "Company") issued a revised Investor Update for the first quarter and full year 2017, revising previously issued full year 2017 capacity guidance and full year 2017 cost guidance (CASM ex-fuel). The update is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Investor Update: February 6, 2017
This update provides JetBlue’s investor guidance for the first quarter ending March 31, 2017 and full year 2017.
Recent Announcements
JetBlue has recently announced service between the following city pairs:
City Pair
Frequency
Start Date
Boston (BOS) - Atlanta (ATL)
5x Daily
March 30, 2017
Ft. Lauderdale (FLL) - Long Beach (LGB)
1x Daily
May 3, 2017
New York (JFK) - Atlanta (ATL)
TBD
TBD
Atlanta (ATL) - Fort Lauderdale (FLL)
TBD
TBD
Atlanta (ATL) - Orlando (MCO)
TBD
TBD
Capacity
First quarter 2017 available seat miles (ASMs) are estimated to increase 4.5% to 6.5% year-over-year. Full year 2017 ASMs are estimated to increase 5.5% to 7.5% year-over-year, 1 point lower than our prior guidance.
JetBlue estimates the following distribution as a percentage of total ASMs by aircraft type:
First Quarter 2017
Full Year 2017
A320
A321 All-Core
A321 Mint
E190
A320
A321 All-Core
A321 Mint
E190
63%
14%
11%
12%
61%
14%
13%
12%
Average stage length is projected to decrease year-over-year by approximately 2.5% for the first quarter 2017 and decrease by approximately 2% year-over-year for the full year 2017.
Operational Outlook
First Quarter
Full Year
2017
2017
Operating Expense Year-Over-Year Percentage Change
Unit Operating Expense Excluding Fuel
(CASM Ex-Fuel)(1)
3.0 - 5.0%
1.5 - 3.5%
Prior guidance issued January 26, 2017
3.0 - 5.0%
1.0 - 3.0%
1 CASM Ex-Fuel excludes fuel and related taxes, and operating expenses related to other non-airline expenses. With respect to the JetBlue’s CASM Ex-Fuel and guidance, JetBlue is not able to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors beyond our control.
1
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
jetblue-logoa05.jpg Investor Update
First Quarter
Full Year
2017
2017
Fuel Expense
Estimated Consumption (gallons)
194 million
804 million
Estimated Fuel Price per Gallon, Net of Hedges 1
$
1.73
2
¹Includes fuel taxes.
²JetBlue utilizes the forward Brent crude curve and the forward Brent crude to heating oil crack spread to calculate the unhedged portion of its prompt quarter. As of January 13, 2017, the forward Brent crude per barrel price was $56 and the crack spread averaged $14 per barrel for the first quarter of 2017
Fuel Hedges
As of January 13, 2017 JetBlue’s advanced fuel derivative contracts are as follows:
Gallons
Estimated Percentage
of Consumption
Price
1Q17
20 million
10%
● 10% in USGC jet fuel swaps at an average of $1.33/gal
2Q17
20 million
10%
● 10% in USGC jet fuel swaps at an average of $1.34/gal
3Q17
20 million
10%
● 10% in USGC jet fuel swaps at an average of $1.38/gal
4Q17
20 million
10%
● 10% in USGC jet fuel swaps at an average of $1.38/gal
Other Income (Expense)
JetBlue estimates total Other Income (Expense) to be between ($20) and ($25) million in the first quarter and between ($95) and ($105) million for the full year.
Tax Rate
JetBlue expects an effective annual tax rate of approximately 39%. However, the actual tax rate in the first quarter and full year 2017 could differ due to a number of factors.
Capital Expenditures
(In millions)
First Quarter 2017
Full Year 2017
Aircraft
Non-aircraft
Total
Aircraft
Non-aircraft
Total
$275 - $325
$30 - $40
$305 - $365
$1,050 - $1,200
$150 - $200
$1,200 - $1,400
2
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
jetblue-logoa05.jpg Investor Update
Aircraft Delivery Schedule
As of December 31 2016 JetBlue’s fleet was comprised of 130 Airbus A320 aircraft, 20 Airbus A321 All-Core aircraft, 17 Airbus A321 Mint aircraft, and 60 EMBRAER 190 aircraft.
Airbus A320
Airbus A321
EMBRAER 190
Aircraft
Mortgage
Lease
Aircraft
Mortgage
Lease
Aircraft
Mortgage
Lease
1Q17
—
—
—
3
—
—
—
—
—
2Q17
—
—
—
2
—
—
—
—
—
3Q17
—
—
—
4
—
—
—
—
—
4Q17
—
—
—
6
—
—
—
—
—
Total at Year End 2017
130
45
15
52
8
2
60
30
30
Order Book
As of December 31 2016 JetBlue’s firm aircraft order book beyond 2017:
Year
Airbus A320neo
Airbus A321
Airbus A321neo
EMBRAER 190
Total
2018
—
8
3
—
11
2019
—
3
18
—
21
2020
6
—
12
10
28
2021
16
—
4
7
27
2022
3
—
17
7
27
2023
—
—
6
—
6
Total
25
11
60
24
120
Share Count
Share count estimates for calculating basic and diluted earnings per share are as follows:
First Quarter
Full Year
2017
2017
Basic Share Count
337.3 million
338.8 million
Diluted Share Count
339.2 million
340.4 million
These share count estimates do not include any share repurchases that may occur throughout 2017 under JetBlue’s share buyback program. The number of shares used in JetBlue’s actual earnings per share will likely be different than those stated above.

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