JetBlue Announces Second Quarter Net Loss of $320 Million or $1.18 per Share
JetBlue announced on Tuesday a second quarter net loss of $320 million or $(1.18) per share on a 90 percent revenue decline to $215 million. The carrier’s GAAP pre-tax loss was $450 million and excluding one-time items, the adjusted pre-tax loss was $754 million.
On Tuesday (July 28, 2020) JetBlue announced a second quarter net loss of $320 million or $(1.18) per diluted share compared to earnings of $179 million or $0.59/share in the second quarter of 2019. Year-over-year revenue declined 90 percent to $215 million compared to $2.1 billion. The company reported a second quarter GAAP pre-tax loss of $450 million and excluding one-time items the adjusted pre-tax loss was $718 million, compared to an adjusted pre-tax income of $238 million in the second quarter of 2019. JetBlue’s second quarter capacity was reduced year-over-year by 85 percent, as the company took aggressive measures to mitigate cash burn. The carrier reduced expenses by 66 percent and excluding special items, operating expenses declined 50 percent. Second quarter costs were cut by over $900 million through variable cost reductions, capacity cuts, fixed cost reductions and discretionary spending cuts. In Tuesday’s announcement, JetBlue’s Chief Executive Officer, Robin Hayes said,
“For the past 20 years we have succeeded against the odds, and we firmly believe that we are laying the foundation and repositioning JetBlue to come out of this historic crisis as a stronger, global player in the years to come. In the past two months, we made progress in reducing our cash burn, and have been quick to resize our operations to the very dynamic demand environment. While demand has improved materially from the lows we saw in April, bookings remain choppy, and we remain focused on addressing changing trends as we progress through the summer. As we move into recovery, we have laid out a three-step framework to set JetBlue up for success and emerge stronger. The first is to reduce cash burn. The second step is to rebuild our margins. The third and last step is to repair our balance sheet. We have been nimble and managed the short term with a sense of urgency, to reduce our cash burn and build liquidity. We are confident that our actions to protect the health and safety of our Customers and Crewmembers, our network changes, and focus on costs will help us rebuild our margins faster.”
JetBlue ended the second quarter with around $2.9 billion in unrestricted cash, cash equivalents and short-term investments. Liquidity was bolstered to $3.4 billion at the close of the quarter due to funds received under the U.S. Cares Act Payroll Support Program (PSP) provision. The company also repaid $78 million in scheduled debt and finance lease obligations during the quarter. JetBlue raised their liquidity position during Q2 through a new $750 million term loan and $120 million in executed sale-leaseback transactions. The company also entered binding sale-leaseback transactions for three upcoming aircraft deliveries and for two aircraft currently in their fleet. JetBlue’s average daily cash burn for the second quarter was $9.5 million and the carrier expects a daily cash burn in the range of $7-9 million during the third quarter.
JetBlue usually operates over 1,000 daily flights to around 100 destinations in the U.S., Caribbean and Latin America. The New York-based airline carries more than 42 million passengers annually and is a leading carrier in New York, Boston, Fort Lauderdale, Orlando, San Juan and Los Angeles. In trading Tuesday morning, shares in JetBlue Airways Corporation (NASDAQ: JBLU) were 0.78% lover at $10.14/share (11:00 AM EDT).