Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JetBlue Airways Corp (JBLU, Financial) reported a 5-point improvement in operating margin year-over-year for the third quarter.
- The company achieved a double-digit increase in net promoter score, indicating improved customer satisfaction.
- JetBlue Airways Corp (JBLU) raised over $3 billion in debt to retire existing debt and fund future capital expenditures, providing financial stability.
- The company's premium offerings, including Even More Space and Mint, continue to perform well, indicating strong demand for premium services.
- JetBlue Airways Corp (JBLU) has realized $275 million of the $300 million revenue target set for 2024, showing progress in revenue initiatives.
Negative Points
- JetBlue Airways Corp (JBLU) faces challenges with Pratt & Whitney aircraft on the ground, impacting long-term capacity planning.
- The company expects a temporary increase in unit costs in the fourth quarter due to various transitory factors, including maintenance expenses and contractual wage rate step-ups.
- JetBlue Airways Corp (JBLU) experienced disruptions from hurricanes Helene and Milton, affecting travel and forward bookings.
- The company is dealing with competitive capacity pressures in its markets, impacting revenue performance.
- JetBlue Airways Corp (JBLU) is not yet profitable, with an adjusted operating loss of $11 million in the third quarter, despite improvements.
Q & A Highlights
Q: When should we start seeing the year-over-year revenue RASM trends performing better than seasonality?
A: Martin St. George, President: The network changes are not among the biggest changes we're making. The preferred seating program and other initiatives will be bigger contributors. The redeployment of capacity will start ramping, and we're happy with what we're seeing so far. The last big-tranche capacity changes are coming out in the stations we just closed.
Q: Can you envision any scenario where you might reengage with Spirit?
A: Joanna Geraghty, CEO: We are not interested in revisiting the Spirit acquisition. We want to focus on improving our margins within JetBlue and delivering on JetForward. We may consider opportunities that allow us to grow in a capitally prudent manner, but we're focused on our organic plan.
Q: Is the goal of a breakeven margin still a reasonable base outlook for next year?
A: Ursula Hurley, CFO: We expect mid- to high-teens number of aircraft on the ground due to the GTF issue, resulting in flat capacity year over year. We're building a plan with a goal to have up margin, which is breakeven or better, assuming a constructive macro backdrop.
Q: How quickly could a new partnership be turned on, and how quickly could any incremental revenue potentially fall to the bottom line?
A: Martin St. George, President: There is a plug in JetForward for some level of partnership, which could be with American or another carrier. The speed depends on the structure of the partnership, but we have a lot of experience with this.
Q: How are you seeing Caribbean RASM playing out this winter?
A: Martin St. George, President: Caribbean has always been above system average for us. We've been aggressive in adding capacity into San Juan and are happy with what we've seen so far. It's a strong market with a strong customer following.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
