JetBlue Airways Raises Revenue Expectations for Q4

JetBlue Airways Corp (NASDAQ:JBLU) has raised its revenue expectations for the fourth quarter, leading to over a 5% rise in its shares during Wednesday’s premarket trading.

The airline now forecasts a revenue decline between 2% and 5% year-over-year, a more optimistic outlook than the previous estimate of a 3% to 7% drop.

Capacity, measured in available seat miles, is expected to decrease by 4.5% to 6.5%, compared to the earlier projection of a 4% to 7% decline. JetBlue is maintaining its capital expenditure outlook at approximately $450 million, close to the consensus estimate of $455 million.

> “Through reliability investments, the Company saw year-over-year on-time performance improve 12 points in October and seven points in November, resulting in a range of benefits to date, from greater customer satisfaction to lower operational costs,” the company stated.

Bookings for November and December have exceeded expectations, especially following the US election, with the airline estimating the election-related revenue impact now at just 0.5 percentage points, down from the prior forecast of 1.0 percentage point.

In December, booking activity surpassed previous expectations across both peak and off-peak travel periods.

JetBlue attributes its stronger revenue outlook to 2024 revenue initiatives expected to deliver over $300 million in cumulative benefits during the fourth quarter. Key drivers include enhanced preferred seating options, adjustments to the Blue Basic carry-on baggage policy, and other strategic initiatives.

> “JetBlue's fourth quarter non-fuel unit costs are expected to improve versus prior guidance, driven by controllable cost benefits as a result of a more reliable and on-time operation,” the statement adds.

Additionally, fuel prices have declined since the start of the fourth quarter, further improving projected operating expenses for the quarter.