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JetBlue Airways (JBLU - Analyst Report) displayed better traffic across its network for the month of Jul 2013. The carrier reported airline traffic – measured in revenue passenger miles or RPMs, of 3.52 billion, up 7.3% year over year. Consolidated capacity (or available seat miles/ASMs) was also up 6.8% year over year at 4.02 billion.

The load factor or percentage of seats filled by passengers was 87.6%, up 40 basis points. Passenger revenue per available seat mile (PRASM) increased 5% year over year. The company registered a completion factor of 99.0%, with on-time performance of 63.9%.

For the first seven months of 2013, JetBlue Airways generated RPMs of 21.14 (up 7.4% year over year) and ASMs of 24.90 billion (up 7.1% year over year), on a consolidated basis. Load factor was 84.9%, reflecting an improvement of 30 basis points from the corresponding prior-year month.

We expect JetBlue to sustain traffic growth in the coming days based on increasing travel demand, network expansion, fleet re-designing and cost-saving moves. The company’s growing presence in key markets and penetration into untapped arenas will support its growth momentum. The airline is planning to offer lie-flat seats, with single seat cabins and closed doors on flights between New York and California.   

However, rising fuel price, competitive pressures, high aircraft maintenance expenses and an uncertain economic situation will weigh on the stock. Recently, the company delivered weak second-quarter 2013 results with earnings of 11 cents per share missing the prior-year quarter’s results of 16 cents as well as the Zacks Consensus Estimate of 14 cents. Total operating revenue climbed 4.5% year over year to $1.34 billion, but lagged the Zacks Consensus Estimate of $1.35 billion.

JetBlue Airways – which operates with the likes of Delta Air Lines Inc. (DAL - Analyst Report), United-Continental Holdings Inc. (UAL - Analyst Report) and U.S. Airways Group Inc. – carries a Zacks Rank #3 (Hold).

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