JonnyKnoxville
Well-known member
- Joined
- May 20, 2004
- Posts
- 439
NEW YORK — JetBlue Airways second-quarter profit grew 50% on growing passenger volumes, but the company announced plans to slow its growth in the wake of a February debacle in which an ice storm forced the cancellation of 1,700 flights and cost Chief Executive David Neeleman his job.
JetBlue, based in Forest Hills, N.Y., said on Tuesday that net income grew to $21 million, or 11 cents a share, in the second quarter, from $14 million, or 8 cents a share, in the year-ago quarter.
Revenue rose to $730 million from $612 million in the second quarter of 2006, a 19.3% increase.
Analysts polled by Thomson Financial, however, had expected earnings of 12 cents a share and revenue of $752.6 million.
JetBlue also announced plans to slow its growth, saying it will take delivery of three fewer airplanes this year and will sell three planes from its fleet. New CEO Dave Barger has said he thinks JetBlue's February storm meltdown was caused, in part, by the fact that the company grew too fast.
FIND MORE STORIES IN: Jetblue | Jetblue Airways | Embraer | David Neeleman
JetBlue still plans to take delivery of 7 new airplanes this year.
"Slowing capacity growth will allow us to strengthen our balance sheet and facilitate earnings growth," Barger said.
JetBlue, a low cost carrier that features free on-flight television and a loyal following, said its operating margin, a measure of profitability, grew to 10% in the quarter from 7.7% a year ago. That was in the middle range of guidance revised upward last month on an expectation declines in fuel costs would offset lower-than-expected passenger revenue.
Passenger revenue increased 18% in the quarter to $683 million, and fuel costs fell 2.8% to $2 a gallon. But because JetBlue flew more planes and passengers in the quarter — departures grew by 31.4% to 49,513 — the company's overall fuel expenses grew by 17.5% to $226 million.
Overall operating expenses increased by 16.3% to $657 million.
JetBlue's on-time performance slipped to 69% in the second quarter from 77.9% in the second quarter of 2006. That is in part due to a summer that has seen an unusual amount of traffic congestion throughout the airline industry. The industry's on-time performance slid to 69.4% in June, compared to 74.7% in June 2006, according to Flightstats.com, an industry research firm.
JetBlue's load factor, a measure of airplane occupancy, rose 1.3 points to 83.5% in the second quarter. Overall airplane capacity grew 12%.
Looking forward, JetBlue expects to report an operating margin of 6% to 8% in the third quarter. For 2007 as a whole, JetBlue expects an operating margin of between 5% and 7%.
JetBlue said it will take delivery of 16 fewer Embraer 190 airplanes, which seat 98 to 114 passengers, than it had planned through 2012. It will increase its Embraer purchases each year from 2013 through 2015. The company still plans to buy 6 to 12 Embraer's a year, or a total of 78, by 2015
The airline will sell three 150-seat Airbus A320 airplanes later this year.
JetBlue's second quarter was punctuated by fallout from the February "Valentine's Day Storm" meltdown, when its policy of not canceling flights caused a massive traffic jam at its JFK International Airport hub.
After the storm, JetBlue made a number of changes, including implementing a pre-cancellation policy that prevented a repeat performance when another ice storm socked the Northeast a month later. The carrier also implemented a passenger "bill of rights," under which it promised to give passengers vouchers for future travel when their flights were delayed in certain circumstances.
The bill of rights cost JetBlue $24 million in the first quarter. It wasn't immediately clear how much the voucher program cost in the second quarter.
The storm also lead to the ouster of JetBlue founder David Neeleman, who was asked by the board to step down as CEO in May. Neeleman remains chairman.
In a recent interview, Barger, the company's long-time president, said many of JetBlue's February problems were due to the fact that the carrier had added planes, routes and employees at too rapid a clip without building a robust set of contingency plans in the event things went wrong.
"I think that truly the lesson (of the storm) is, hey, plan A, and if it doesn't materialize, what's B and C and D?" Barger said. "There's no question in my mind that I think that we grew too fast."
JetBlue, based in Forest Hills, N.Y., said on Tuesday that net income grew to $21 million, or 11 cents a share, in the second quarter, from $14 million, or 8 cents a share, in the year-ago quarter.
Revenue rose to $730 million from $612 million in the second quarter of 2006, a 19.3% increase.
Analysts polled by Thomson Financial, however, had expected earnings of 12 cents a share and revenue of $752.6 million.
JetBlue also announced plans to slow its growth, saying it will take delivery of three fewer airplanes this year and will sell three planes from its fleet. New CEO Dave Barger has said he thinks JetBlue's February storm meltdown was caused, in part, by the fact that the company grew too fast.
FIND MORE STORIES IN: Jetblue | Jetblue Airways | Embraer | David Neeleman
JetBlue still plans to take delivery of 7 new airplanes this year.
"Slowing capacity growth will allow us to strengthen our balance sheet and facilitate earnings growth," Barger said.
JetBlue, a low cost carrier that features free on-flight television and a loyal following, said its operating margin, a measure of profitability, grew to 10% in the quarter from 7.7% a year ago. That was in the middle range of guidance revised upward last month on an expectation declines in fuel costs would offset lower-than-expected passenger revenue.
Passenger revenue increased 18% in the quarter to $683 million, and fuel costs fell 2.8% to $2 a gallon. But because JetBlue flew more planes and passengers in the quarter — departures grew by 31.4% to 49,513 — the company's overall fuel expenses grew by 17.5% to $226 million.
Overall operating expenses increased by 16.3% to $657 million.
JetBlue's on-time performance slipped to 69% in the second quarter from 77.9% in the second quarter of 2006. That is in part due to a summer that has seen an unusual amount of traffic congestion throughout the airline industry. The industry's on-time performance slid to 69.4% in June, compared to 74.7% in June 2006, according to Flightstats.com, an industry research firm.
JetBlue's load factor, a measure of airplane occupancy, rose 1.3 points to 83.5% in the second quarter. Overall airplane capacity grew 12%.
Looking forward, JetBlue expects to report an operating margin of 6% to 8% in the third quarter. For 2007 as a whole, JetBlue expects an operating margin of between 5% and 7%.
JetBlue said it will take delivery of 16 fewer Embraer 190 airplanes, which seat 98 to 114 passengers, than it had planned through 2012. It will increase its Embraer purchases each year from 2013 through 2015. The company still plans to buy 6 to 12 Embraer's a year, or a total of 78, by 2015
The airline will sell three 150-seat Airbus A320 airplanes later this year.
JetBlue's second quarter was punctuated by fallout from the February "Valentine's Day Storm" meltdown, when its policy of not canceling flights caused a massive traffic jam at its JFK International Airport hub.
After the storm, JetBlue made a number of changes, including implementing a pre-cancellation policy that prevented a repeat performance when another ice storm socked the Northeast a month later. The carrier also implemented a passenger "bill of rights," under which it promised to give passengers vouchers for future travel when their flights were delayed in certain circumstances.
The bill of rights cost JetBlue $24 million in the first quarter. It wasn't immediately clear how much the voucher program cost in the second quarter.
The storm also lead to the ouster of JetBlue founder David Neeleman, who was asked by the board to step down as CEO in May. Neeleman remains chairman.
In a recent interview, Barger, the company's long-time president, said many of JetBlue's February problems were due to the fact that the carrier had added planes, routes and employees at too rapid a clip without building a robust set of contingency plans in the event things went wrong.
"I think that truly the lesson (of the storm) is, hey, plan A, and if it doesn't materialize, what's B and C and D?" Barger said. "There's no question in my mind that I think that we grew too fast."
