JetBlue Airways (JBLU) Posts Narrower-Than-Expected Q4 Loss

JetBlue Airways JBLU incurred a fourth-quarter 2021 loss (excluding 4 cents from non-recurring items) of 36 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 40 cents. This was the eighth successive quarterly loss posted by this currently Zacks Rank #4 (Sell) low-cost carrier.

JetBlue Airways Corporation Price, Consensus and EPS Surprise

JetBlue Airways Corporation Price, Consensus and EPS Surprise

JetBlue Airways Corporation price-consensus-eps-surprise-chart | JetBlue Airways Corporation Quote

Quarterly loss per share was also narrower than the year-ago loss of $1.53.

Operating revenues of $1,834 million skyrocketed more than 177% year over year and also surpassed the Zacks Consensus Estimate of $1,829.9 million. This massive year-over-year jump reflects improving air-travel demand. However, revenues decreased 7%, sequentially, mainly due to the omicron crisis. Moreover, quarterly revenues declined 9.7% from the fourth-quarter 2019 actuals.

Passenger revenues, accounting for the bulk of the top line (92.4%), increased to $1,695 million in fourth-quarter 2021 from a mere $606 million a year ago when the impact of coronavirus on air-travel demand was much severe. Other revenues surged in excess of 100% to $139 million.

Other Details

All comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 54.6% to 12.06 cents. Passenger revenue per available seat mile (PRASM) surged 55.9% to 11.15 cents owing to better air-travel demand. Average fare at JetBlue during the quarter increased 9% to $196.76. Yield per passenger mile shot up 7% year over year to 14.58 cents.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) skyrocketed 161.6% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 79.4% to 15,211 million. Consolidated load factor (percentage of seats filled by passengers) increased 24 percentage points to 76.4% in the fourth quarter of 2021 as traffic growth outpaced capacity expansion.

In the fourth quarter, total operating expenses (on a reported basis) escalated 75.1% to $1,953 million, mainly due to a 244.7% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $2.37 from $1.31 a year ago as oil prices move north.

JetBlue’s operating expenses per available seat mile (CASM) fell 2.4% to 12.84 cents. Excluding fuel, the metric declined 21.5% to 9.66 cents.

JetBlue, currently carrying a Zacks Rank #4 (Sell), exited the fourth quarter of 2021 with cash and cash equivalents of $2,018 million compared with $1,918 million at the end of 2020. Total debt at the end of the reported quarter was $4,006 million compared with $4,863 million at 2020 end. During the quarter, JBLU paid off debt worth $120 million.

JetBlue exited the December quarter with $2.8 billion of unrestricted cash, cash equivalents and short-term investments, reflecting 35% of the 2019 levels. Adjusted EBITDA in the quarter was $31 million, toward the better end of the guided range of ($50)-$50 million.

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Outlook

Due to the omicron-induced turbulence, JetBlue reduced its scheduled flights for the current quarter. While providing guidance for first-quarter 2022, management stated that all comparisons are made with respect to the first quarter of 2019. Capacity is anticipated in the range of (1)-2% compared with the figure reported in the first quarter of 2019. CASM, excluding fuel and special items, is predicted to rise 13-15%.

Total revenues are forecast to drop in the 11-16% range. Average fuel cost per gallon in the March quarter is estimated to be $2.59. Fuel consumption is expected to be roughly 195 million gallons in the first quarter of 2022. Capital expenditures in the March quarter are anticipated to be roughly $175 million.

Management expects the omicron impact to be short term. Per JetBlue CEO Robin Hayes, “While Omicron has temporarily weighed on demand in the very near term, we expect sequential month-on-month improvement through the quarter, ultimately returning to sustained profitability in the spring and beyond. Furthermore, were it not for Omicron, we believe we would have generated higher revenue this quarter than in the first quarter of 2019.”

For 2022, capacity is expected to increase in the 11-15% range from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 1-5% from the 2019 actuals.

Sectorial Snapshots

Within the broader Transportation sector, J.B. Hunt Transport Services JBHT , United Airlines UAL and Delta Air Lines DAL recently reported fourth-quarter 2021 results.

J.B. Hunt Transport Services reported fourth-quarter 2021 earnings of $2.28 per share, surpassing the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.

JBHT’s operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line jumped 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.

United Airlines incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. The amount of loss narrowed by 77.1% year over year.

UAL’s operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million. The top line surged more than 100% year over year, with passenger revenues, accounting for 84% of the top line, having soared 185.4% to $6,878 million.

Delta reported fourth-quarter 2021 earnings (excluding 86 cents from non-recurring items) of 22 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Earnings came against the year-ago quarter’s loss of $2.53 per share. Strong holiday travel demand and favorable pricing aided the December-quarter results.

DAL’s revenues came in at $9,470 million, which not only beat the Zacks Consensus Estimate of $9,232.1 million but also skyrocketed more than 100% from the year-ago figure as people resorted to air travel during the holidays.

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