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JetBlue Airways Corporation reported its results for the fourth quarter and full year 2010:
– Pre-tax income of $15 million in the fourth quarter. This compares to pre-tax income of $20 million in the year-ago period.
– For the full year 2010, JetBlue reported pre-tax income of $161 million. This compares to a pre-tax income of $104 million for the full year 2009.
– Net income for the fourth quarter was $9 million, or $0.03 per diluted share. This compares to JetBlue’s fourth quarter 2009 net income of $11 million, or $0.04 per diluted share.
– For the full year 2010, JetBlue reported net income of $97 million, or $0.31 per diluted share. This compares to net income of $61 million, or $0.21 per diluted share, for the full year 2009.
“Clearly, 2010 was an excellent year for JetBlue,” said Dave Barger, JetBlue’s CEO. “Thanks to the hard work and dedication of our outstanding crewmembers, we successfully transitioned to a new customer service and reservations system, strengthened our network in key markets such as Boston and the Caribbean, and created new revenue opportunities through airline partnerships and other product enhancements. As we look ahead into 2011, we believe we are taking the right steps to continue to strengthen our airline and improve our competitive position.”
Operational Performance
JetBlue reported record fourth quarter operating revenues of $940 million despite severe weather in the Northeast, which reduced revenue by an estimated $30 million. For the full year, operating revenues totaled $3.78 billion, representing an increase of 14.8% over operating revenues of $3.29 billion for the full year 2009.
For the fourth quarter, revenue passenger miles increased 10.1% year-over-year to 6.98 billion on a capacity increase of 6.8%, resulting in a fourth quarter load factor of 81.9%, an increase of 2.5 points year over year.
Yield per passenger mile in the fourth quarter was 12.11 cents, up 4.1% compared to the fourth quarter of 2009. Passenger revenue per available seat mile (PRASM) for the fourth quarter 2010 increased 7.4% year-over-year to 9.91 cents and operating revenue per available seat mile (RASM) increased 5.9% year-over-year to 11.03 cents.
Operating expenses for the quarter increased 14.9%, or $115 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the fourth quarter increased 7.6% year-over-year to 10.34 cents. Excluding fuel, CASM increased 3.6% to 6.95 cents.
Fuel Expense and Hedging
JetBlue hedged approximately 45% of its fuel consumption during the fourth quarter, resulting in a realized fuel price of $2.42 per gallon, a 16% increase over fourth quarter 2009 realized fuel price of $2.08. JetBlue recorded $3 million in gains on fuel hedges that settled during the fourth quarter.
JetBlue has hedged approximately 37% of its first quarter projected fuel requirements and 32% of its full year 2011 projected fuel requirements using a combination of crude call options and collars, jet fuel swaps and heating oil collars. Based on the fuel curve as of January 21, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $2.84 in the first quarter and $2.89 for the full year 2011.
Balance Sheet Update
JetBlue ended the year with approximately $1 billion in unrestricted cash and short term investments.
“During 2010, we made several strategic investments in our infrastructure and network while maintaining one of the best liquidity positions in the U.S. airline industry relative to our size,” said Ed Barnes, JetBlue’s CFO. “We believe our strong financial foundation coupled with a continued focus on improving our balance sheet and managing costs position us for continued success in 2011 and beyond.”
First Quarter and Full Year Outlook
For the first quarter of 2011, CASM is expected to increase between 11 and 13 percent over the year-ago period. Excluding fuel, CASM in the first quarter is expected to increase between three and five percent year over year.
CASM for the full year is expected to increase between eight and ten percent over full year 2010. Excluding fuel, CASM in 2011 is expected to range from negative one and positive two percent year over year.
Capacity is expected to increase between one and three percent in the first quarter and to increase between seven and nine percent for the full year.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
