JetBlue records a net loss in Q2 as fuel costs soar

posted on 25th July 2018 by Justin Burns
JetBlue records a net loss in Q2 as fuel costs soar

US carrier JetBlue has reported a net loss of $120 million in the second quarter (Q2) after earnings of $207 million in the year-earlier period.

The loss was also heavily affected by the $319 million impairment charge on Embraer E190 assets, the company said along with higher fuel prices.

The airline is the fifth biggest in the US and also said revenue rose by five per cent in Q2 to $1.93 billion from $1.836 billion. Revenue per available seat mile fell 1.2 perc cent, while operating expenses per available seat mile, excluding fuel, rose 1.9 per cent.

The realised fuel price in the quarter was $2.28 per gallon, a 41.7 per cent increase versus second quarter 2017 realised fuel price of $1.61.

JetBlue said it entered into forward fuel derivative contracts to hedge approximately seven per cent of its fuel consumption during the third quarter (Q3) of 2018. Based on the fuel curve as of 13 July it expects an average price per gallon of fuel of $2.33 in Q3.

The airline said is now expecting capacity to rise 7.5 per cent to 9.5 per cent in Q3 and to increase 6.5 per cent to 7.5 per cent in the full year, including a two point reduction to capacity in the fourth quarter.

JetBlue’s chief executive officer, Robin Hayes said: “Our financial performance was impacted by the holiday calendar, but more importantly, by fuel prices that increased over 40 per cent year over year.

“The team is focused on mitigating the impact of higher fuel in order to stabilise and improve our margins. We are planning a series of adjustments to both capacity and our ancillary revenue to take effect over the coming months.”

In Q2, JetBlue announced a signed MOU for the purchase of 60 Airbus A220 aircraft, starting in 2020 through 2025 and a transition plan for its current E190 fleet.