JetBlue Airways (JBLU) reports operational and financial update of its expected third quarter 2024 results
JetBlue Airways (NASDAQ: JBLU) disclosed:
JetBlue Airways Corporation ("JetBlue" or the "Company") announced today an operational and financial update of its expected third quarter 2024 results.
The Company's operational performance over the summer travel season improved year-over-year, as evidenced by an improvement to on-time performance by approximately ten points year-over-year. This was enabled by JetBlue's heightened focus on offering reliable and caring service as a core pillar of its JetForward strategy.
JetBlue's revenue performance quarter-to-date was benefited by several factors, including improving in-month bookings, particularly in the Latin region, and continued progress from its previously announced $300 million worth of revenue initiatives. The Company also recognized revenue uplift from the re-accommodation of customers affected by other airlines' cancellations due to technology outages in July.
JetBlue's quarter-to-date expenses declined due to moderating fuel prices since the start of the third quarter. Non-fuel unit costs improved by one point versus expectations as benefits from focused efforts on cost control and operational reliability were partially offset by weather-related disruption costs in August.
In August 2024, JetBlue issued $2,000 million aggregate principal amount of senior secured notes due 2031 and entered into a $765 million term loan credit and guaranty agreement, maturing in 2029. The Company also issued $460 million aggregate principal amount of its 2.50% Convertible Senior Notes due 2029, and used the net proceeds from the initial offering to repurchase a portion of its existing 0.50% senior convertible notes due 2026. These transactions were previously described in the Company's Current Reports on Form 8-K (collectively, the "Financing Transactions"). As a result of the Financing Transactions, the Company now expects interest expense to be in the range of $370 million to $380 million for the full year, as compared to a previous management assumption (1) of $320 to $330 million.
The table below provides JetBlue’s updated investor guidance for the third quarter ending September 30, 2024.
| Third Quarter 2024 Outlook | Current Guidance | Previous Guidance (2) | ||||||
| Capacity and Revenue | ||||||||
| Available Seat Miles ("ASMs") Year-Over-Year | (5.0%) - (3.0%) | (6.0%) - (3.0%) | ||||||
| Revenue Year-Over-Year | (2.5%) - 1.0% | (5.5%) - (1.5%) | ||||||
| Expense | ||||||||
| CASM Ex-Fuel (3) Year-Over-Year | 5.0% - 7.0% | 6.0% - 8.0% | ||||||
| Fuel Price per Gallon (4), (5) | $2.70 - $2.80 | $2.82 - $2.97 | ||||||
| Interest Expense | $100 - $110 million | - | ||||||
| Capital Expenditures | Unchanged | ~$365 million | ||||||
The table below provides JetBlue’s updated interest expense guidance for the full year ending December 31, 2024.
| Full Year 2024 Outlook | Current Guidance | Previous Guidance (1) | ||||||
| Interest Expense | $370 - $380 million | - | ||||||
(1) Management previously assumed full year interest expense of $320 to $330 million as of January 30, 2024. Full year 2024 interest expense was not previously guided.
(2) Previous guidance as of July 30, 2024. Third quarter 2024 interest expense was not previously guided.
(3) Non-GAAP financial measure; refer to Note A for further details on non-GAAP forward looking information.
(4) Includes fuel taxes, hedges and other fuel fees.
(5) JetBlue utilizes the forward Brent crude curve and the forward Brent crude to jet crack spread to calculate the unhedged portion of its current quarter. Fuel price is based on forward curve as of August 23, 2024.
In addition, today JetBlue provided investors with an update regarding the Company’s business and business strategy, including the Financing Transactions, which is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information included under Item 7.01 of this report (including Exhibit 99.1) is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.