JetBlue anticipates that revenues and capacity will be close to pre-Covid19 levels during the third quarter. However, executives stated that the road to recovery is uncertain and “nonlinear”.
JetBlue’s second quarter revenue was $1.4 billion for passengers and $1.5 billion overall, a decrease of 29 percent over the first quarter 2019. JetBlue President and COO Joanna Geraghty stated that while capacity was lower than in 2019, it was almost back to the pre-pandemic level. She said that June’s load factors were around the mid-80s, as compared to the average load factor of the first quarter which was in the low 60s. Leisure fares are also nearing their pre-pandemic level.
According to Geraghty, JetBlue expects capacity to fall between 3 and 4 percent from 2019 levels, and revenue will drop in the 9 to 4-percent range. JetBlue, like other U.S. airlines, expects to experience growing business travel demand this fall. However, executives stated that they are still cautious as to whether it will return to the same extent.
Robin Hayes, CEO of Robin Hayes stated in an earnings call Tuesday that “we are hearing a lot about companies opening office spaces back between September and October,”. We’ve seen this before and are still concerned about the impact of a rise in variant cases, or any other concern on future demand. Since over a decade, we have been warning that the path to this point could be very unpredictable. We don’t wish to set unrealistic expectations.
JetBlue’s corporate businesses, which have traditionally accounted for around 20% of the company’s total revenue, are getting an increase this autumn thanks to its partnership with American Airlines. Although executives aren’t yet ready to calculate how the partnership will impact revenues, each percentage point that JetBlue is able increase its corporate business is equivalent to approximately $25 million in revenue. Scott Laurence, JetBlue’s head of revenue planning, said.
Laurence stated that “We make it easy for corporate customers to see JetBlue’s service more and our fare structure, which will mean their realized fares as well as average fares in many of these markets will drop because they realize JetBlue is competitive.” We are happy with the response from customers so far.
JetBlue is still on schedule to launch its first transatlantic flight to London next month. Hayes however stated that he was “frustrated” by the lack of plans to create a corridor for travel between the United States, United Kingdom. Hayes stated that the carrier will operate daily service beginning in August. This service will be accompanied by “training events”, and the company will then reduce the frequency in September, if travel between the two countries remains limited.
Hayes stated that there is some news that U.K. would open to U.S.-vaccinated travellers. However, he didn’t say if it was going to happen. We’ve seen the potential for good news many times, but that has been shattered. However, we will continue to be flexible and meet the demands.
He said that once a corridor is opened, the demand for it will “bounce back quick.”
JetBlue posted a second-quarter net income of $64million, as opposed to a loss in 2020’s second quarter. The carrier suffered a loss of $206 million in the last quarter, excluding federal payroll support and special items.
According to Ursula Hurley, JetBlue’s acting CFO, JetBlue will generate pre-tax profits for July and August.
RELATED:JetBlue Q1 Earnings
Publiated at Tue 27 July 2021 21:03.41 +0000