JBLU Near Break Even 3Q

[FDJ2]

HoustonChronicle.com -- http://www.HoustonChronicle.com | Section: Markets


Sept. 21, 2006, 4:58PM

JetBlue Sees Near Break-Even 3Q

© 2006 The Associated Press

NEW YORK — Low-cost carrier JetBlue Airways Corp. said it expects a third-quarter pretax profit margin of between negative 1 percent and 1 percent, as unit costs are growing about as fast as unit passenger revenue, according to an investor update filed with the Securities and Exchange Commission Thursday.

Wall Street had been expecting JetBlue to post a break-even quarter, according to an analyst poll by Thomson Financial. JetBlue is in the midst of a slower-growth plan to return to profitability.

The Forest Hills, N.Y.-based carrier said passenger revenue per available seat mile, an industry unit of capacity, is growing between 13 percent and 15 percent in the third quarter compared with the year-ago period.

Meanwhile, JetBlue's costs per available seat mile are growing between 14 percent and 16 percent during the quarter.

For the full year, JetBlue estimates unit passenger revenue up 12 percent to 14 percent, with unit costs up 13 percent to 15 percent.

JetBlue said its overall capacity will grow an estimated 19 percent to 21 percent in the third quarter, compared with the year-ago period. For the full year, it expects capacity to be up between 20 percent and 22 percent.

JetBlue shares fell 35 cents, or 3.4 percent, to close at $9.86 on the Nasdaq. It was an overall down day for airline shares, weighed by higher oil prices.

 

[Captain Overs]

Rumor has it the A-320 MX has been costing JetBlue a ton of money. Can anyone confirm this?

 

[MCDU]

Rumor is that E 190 pay will be the same as the A 320 pay
for First Officers.

Marty

 

[FlyBoeingJets]

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20060922:MTFH46510_2006-09-22_19-33-50_N22204602&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage2

UPDATE 1-JetBlue shares fall on lower outlook

Fri Sep 22, 2006 3:33pm ET

NEW YORK, Sept 22 (Reuters) - Shares in JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) fell on Friday after the discount carrier lowered its earnings forecast amid weaker demand.

JetBlue was the latest U.S. airline to highlight softening demand because of security concerns and a seasonal drop-off in traffic. The six-year-old airline has hit some bumps after a period of rapid growth and it embarked on a turnaround effort earlier this year.

"The company, in our view, faces significant revenue challenges given its rapid growth plans despite a slowing economy," Merrill Lynch analyst Michael Linenberg said.
In a filing late on Thursday, the New York-based airline said it expected a 2006 pretax profit margin of negative 2 percent to break-even. That's one percentage point lower than a forecast range from July 25.

The discount carrier, which features onboard satellite TV, kept its third-quarter guidance for pretax profit margin steady at between negative 1 percent and positive 1 percent. The stable third-quarter forecast coupled with the lower full-year guidance implies a more pessimistic outlook for the fourth quarter.

In the filing, the company said the outlook assumes a third-quarter gain of about $6 million and an "immaterial loss" in the fourth quarter from the planned sale of five planes. JetBlue also lowered its third-quarter forecast for growth in passenger revenue per available seat mile -- a measure of demand -- by five percentage points to 13 percent to 15 percent.

This was countered by a decline in estimated third-quarter average fuel cost to $2.10 a gallon from $2.20 a gallon. This equates to savings of about $10 million based on its expected fuel consumption of 101 million gallons.
JetBlue increased its fourth-quarter fuel hedge in recent weeks. It said it had hedged 51 percent of its estimated fourth-quarter jet fuel consumption compared with 31 percent as of July 25.

It is protected against a rise in prices, starting at $2.15 a gallon in jet fuel and $67 a barrel in oil. The airline didn't say what its exposure to falling prices is. Some airlines that have hedged near peak summer prices may end up paying above-market prices for fuel.

© Reuters 2006. All Rights Reserved.


Those of you who know me, know I don't "bash" JetBlue. I like to point out BS at any and all carriers.


For the Blue Dudes note the above in red. There is no gain from the sale of the used Airbi. The corporate koolaid is coming fast and furious over there. And, in this case, is very strong indeed.


And the fuel hedge thing. I'm surprised the interviewer thought enough to ask what the rest of the story was with the fuel hedge percentage. Announcing an increase in fuel hedge and failing to give out further detail is insulting to the investors (and employees) they are pitching too.


Kinda like going to buy a new fridge and running into an old sales pitch.

"Sir, this model is 30% off the list this week and this week only"
"But isn't the price 30% higher than last week."
"Uhh...Let me check with the manager"




Blue Dudes,

Lay off the Koolaid. It's strong and definitely not for the young.

 

[Bavarian Chef]

Rumor is that E 190 pay will be the same as the A 320 pay
for First Officers.

Marty

HAAAAAAAAAAAAAAAAAAAAAAAAAAA. Are we gonna take out a loan to make that happen?

 

[Snoopy Mendoza]

Announcing an increase in fuel hedge and failing to give out further detail is insulting to the investors (and employees) they are pitching too.

Standy…

How do I do this again? Oh yes I got it!

Point then click…

http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0000950136-06-007898&Type=HTML

Find the paragraph titled: Fuel Hedges:

It that what you are worried about?

Sorry it took so long I have only a cable modem.

:beer:

 

[Schwanker]

Capt - You can't say this on Flightinfo!

Rumor has it the A-320 MX has been costing JetBlue a ton of money. Can anyone confirm this?

Didn't you get the memo? You can't ask this on flightinfo! I got chewed a new one just asking a similar question after looking at last quarters results. The increases were quite alarming!

 

[Snoopy Mendoza]

Didn't you get the memo? You can't ask this on flightinfo! I got chewed a new one just asking a similar question after looking at last quarters results. The increases were quite alarming!

You mean this thread.

http://forums.flightinfo.com/showthread.php?t=83178

That was chewing you "a new one"?

I'm sorry, really!
:beer:

 

[Schwanker]

You mean this thread.

http://forums.flightinfo.com/showthread.php?t=83178

That was chewing you "a new one"?

I'm sorry, really!
:beer:

Ok Snoop,
You're right, it wasn't quite a "new one." A simple question did receive some defensive responses though. Others, such as yourself, did give some insight on the increasing mx costs. Thanks.

 

[AKAAB]

All pay rates under review and a new Pilot Compensation Group working to improve the numbers... hmmm...

I think this announcement plays well for those that are looking to stifle any growth in our payscale or benefits. Once the payscale issue is resolved, will you see a change in the timbre of the announcements?

 

[Dizel8]

All pay rates under review and a new Pilot Compensation Group working to improve the numbers... hmmm...

I think this announcement plays well for those that are looking to stifle any growth in our payscale or benefits. Once the payscale issue is resolved, will you see a change in the timbre of the announcements?

Issuing guidance to Wall Street being used as a ploy to keep compensation down, yeah, that one I find hard to believe, but hey, just because you are not paranoid does not mean they aren't out to get you!

 

[RideandDrive]

Rumor is that E 190 pay will be the same as the A 320 pay
for First Officers.


Hahahahaha

 

[Scrapdog]

Rumor is that E 190 pay will be the same as the A 320 pay
for First Officers.

Marty

What crack rock is he smokin? That must be some good stuff!

 

[FlyBoeingJets]

Standy…

How do I do this again? Oh yes I got it!

Point then click…

http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0000950136-06-007898&Type=HTML

Find the paragraph titled: Fuel Hedges:

It that what you are worried about?

Sorry it took so long I have only a cable modem.

:beer:

Fuel Hedges: ​

We have entered into advanced fuel derivative agreements to reduce our exposure to fluctuations in fuel price. As of September 21, 2006, our advanced fuel derivative agreements for 2006 are as follows: ​

Gallons
(Est % of consumption)

Price ​

Q306 ​

57.3 million (57%) ​

34% in heat collars & swaps with upside protection beginning at $1.99/gal
23% in crude caps with upside protection beginning at $68/bbl ​

Q406 ​

50.6 million (51%)​

38% in heat collars & swaps with upside protection beginning at $2.15/gal
13% in crude caps with upside protection beginning at $67/bbl​

Additionally, our upside protection on the crude caps is capped at approximately $85/bbl. ​

I notice JB pays the difference over $85. That was appears to be very smart as oil is now falling. But probably little to no benefit as oil is coming close to the caps.​

All in all, probably a cheap insurance policy that offered some protection that is now not needed.
Not a bad job. ​

And no, it wasn't so hard to paste. Thanks for the link.​

 

[FDJ2]

Rumor is that E 190 pay will be the same as the A 320 pay
for First Officers.

Marty

190 rate going up, 320 rate going down, or will they meet in the middle for a common rate?

 

[metroplex]

break even only?......sad, if everybody is going to make money