JetBlue posts Q2 loss as fuel costs offset rising revenue
NEW YORK (AP) — JetBlue Airways lost $188 million in the second quarter, as fuel costs nearly tripled and wiped out a large increase in revenue during the early part of the peak vacation-travel season.
The loss reported Tuesday was wider than Wall Street expected. JetBlue was unable to keep pace with bigger rivals, who posted profits for the quarter on full planes and higher fares.
Shares of JetBlue fell 6% in late-morning trading Tuesday.
JetBlue gave the financial update just days after reaching an agreement to buy Spirit Airlines for about $3.8 billion. CEO Robin Hayes said the deal, which JetBlue expects to close by early 2024, will increase his airline’s earnings per share in the first year after closing.
Antitrust regulators are already reviewing the deal, and it is unclear how long that process will take.
“Obviously we’re not in control of the timeline,” Hayes said on a call with analysts. He said Spirit shareholders — who were poised to reject a merger with Frontier Airlines — will likely vote in the next three months.
In the meantime, JetBlue is counting on the addition of flights to London and a partnership with American Airlines in New York and Boston to help it become profitable. The Justice Department is suing to block the deal with American, saying it will reduce competition and hurt consumers.
JetBlue also announced it will speed up the retirement of some smaller planes to save money.
In the second quarter, fuel was JetBlue’s largest expense, surging to $910 million from $336 million a year earlier. Labor costs rose 20%, to $695 million, as the New York-based airline hired more workers to avoid the high number of flight delays and cancellations it suffered in April.
The quarterly loss compared with a profit of $64 million a year earlier, when JetBlue received federal pandemic aid that has since ended.
The adjusted loss, excluding some non-recurring items, was 47 cents per share. Analysts expected a loss of 11 cents per share, according to a FactSet survey.
Revenue soared 63% from a year ago, to $2.45 billion, about in line with expectations.