• Joe Breitfeller

JetBlue Reports Third Quarter Net Loss of $393 Million on 76 Percent Revenue Decline to 492 Million

The airline’s net third quarter loss was $393 million or $1.44 per diluted share compared to earnings of $187 million or $0.63 per diluted share during the third quarter of 2019. Year-over-year revenues declined 76.4 percent to $492 million versus $2.1 billion in Q3 2019.

JetBlue Airbus A320 - Photo Credit: George Santry/JetBlue

On Tuesday (October 27, 2020), JetBlue announced a third quarter 2020 net loss of ($393) million or ($1.44) per diluted share compared to earnings of $187 million or $0.63/share during the third quarter of 2019. The carrier’s revenue declined 76.4% year-over-year to $492 million versus $2.086 billion during the same period last year. JetBlue’s adjusted loss per share was ($1.75) for the third quarter compared to adjusted diluted earnings of $0.59 during Q3 2019. The airline reported a Q3 GAAP pre-tax loss of ($578) million in the quarter versus a pre-tax income of $244 million in the third quarter of 2019. When one-time special items are excluded, JetBlue reported a third quarter adjusted pre-tax loss of ($690) million compared to an adjusted pre-tax income of $239 million during the same period last year. In Tuesday’s announcement, JetBlue’s President and Chief Operating Officer, Joanna Geraghty, said,

“In the third quarter, our revenue declined 76% year over year, a welcome improvement compared to our initial expectation. We saw a modest, sequential improvement in August and September demand as new case counts decreased, and quarantine restrictions in some states were eased. Our Northeast geography continues to be disproportionately impacted, though we believe it will undoubtedly rebound as it always has with past challenges.

Our planning assumption for the fourth quarter is a revenue decline of approximately 65% year over year. Although there still quite a lot of uncertainty about the evolution of the coronavirus, we are starting to see the booking curve extend slightly into the upcoming Thanksgiving and December holiday travel period, and we are encouraged by Customers responding positively to our promotional activity including an early holiday sale in late September. For the fourth quarter, our current planning assumption is for capacity to decline approximately 45% year over year, given our current expectations for improved bookings.”

During the third quarter, JetBlue operated with a year-over-year capacity reduction of 58% and the company experienced an operating expense decline of 45%. When special items are excluded, the carrier’s adjusted operating expensed declined 39% compared to Q3 2019. JetBlue ended the third quarter with around $3.1 billion in unrestricted cash, cash equivalents, short-term investments and restricted cash from the U.S. CARES Act’s Payroll Support Program (PSP). The airline repaid $95 million in regularly scheduled debt and lease finance obligations during the quarter and the U.S. Treasury updated JetBlue’s CARES Act Loan Program facility to $1.95 billion.

Utilizing EETC transactions, JetBlue refinanced a $1 billion 364-day term loan maturing in 2021 and executed over $300 million in sale-leaseback transactions for new and existing fleet aircraft. The company’s third quarter average daily cash burn was $6.1 million, an improvement from the $7-$9 million range expected in late July. JetBlue is projecting a fourth quarter average daily cash burn of approximately $4-6 million.

Commenting on the carrier’s liquidity preservation measures, JetBlue’s Chief Financial Officer, Steve Priest, said,

“Our average daily cash burn for the third quarter was $6.1 million dollars, ahead of the $7 to $9 million dollar range we anticipated 3 months ago. This was the result of a modest improvement in demand, beginning in August, variable cost savings achieved through a balanced approach to capacity, and the many actions we took to minimize fixed costs across our business. For the fourth quarter, we estimate our daily cash burn to be between $4 and $6 million dollars. Earlier this month, we reached a second negotiated agreement with Airbus to defer additional aircraft and associated capital expenditure over the next few years. Since the beginning of the crisis we have reduced aircraft and non-aircraft CAPEX by approximately $2 billion dollars between 2020 and 2022.

“At the end of September, our total liquidity was approximately $3.1 billion dollars. During the quarter, we refinanced our $1 billion dollar 364-day term loan and continued our focus on maintaining liquidity. We have approximately $1 billion dollars of traditional unencumbered assets, excluding the value of our TrueBlue loyalty program and our subsidiaries. As we navigate the current environment with a steady hand, we are shifting our work to rebuilding our margins. We are taking an aggressive approach to improving our cost structure, better aligning our fixed and variable cost base, to temporarily lower revenue and capacity. We believe that our work will return JetBlue to profitability with structurally better margins, and our ultimate intention is to achieve superior pre-tax margins versus the industry.”

JetBlue is ‘New York’s Hometown Airline® and a leading carrier in Boston (BOS), Fort Lauderdale (FLL), Los Angeles (LAX), Orlando (MCO) and San Juan (SJU). The airline carries guests to destinations across the U.S., Caribbean and Latin America. In trading Tuesday afternoon, shares in JetBlue Airways Corp. (NASDAQ: JBLU) were down 4.46% to $12.00/share (12:03 PM EDT).

Source: JetBlue Airways


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