Back to top

Analyst Blog

Leading low cost airline JetBlue Airways Corporation (JBLU - Analyst Report) registered strong traffic growth in April. The carrier reported airline traffic – measured in revenue passenger miles or RPMs – of 3.18 million, up 6.1% year over year, representing the third consecutive month of high traffic after recording a dip in Jan 2014.

Consolidated capacity (or available seat miles/ASMs) was also up 5.9% year over year at 3.79 billion.

Moreover, the load factor or percentage of seats filled by passengers 83.9%, up 20 basis points.

Passenger revenue per available seat mile (PRASM) increased 11% year over year. The company registered a completion factor of 98.6%, with on-time performance of 77.4%.

In the first four months of this year, JetBlue has generated RPMs of 11.8 billion (up 2.9% year over year) and ASMs of 14.2 billion (up 3.6% year over year). However, load factor, moved south to 83.3% from the year-ago figure of 83.8%.

We expect JetBlue to sustain traffic growth in the coming days based on increasing travel demand, network expansion, fleet re-designing, optimization of unit revenues, capital expenditure management and disciplined growth. The company’s growing presence in key markets and penetration into untapped arenas will further support its momentum.

The company’s further actions include adding services between Fort Lauderdale and different Central American destinations like Port of Spain, Montego Bay, Punta Cana, Trinidad and Tobago and Dominican Republic in May 2014. The company currently serves 69 routes between the U.S. and the Caribbean Islands, which includes over 200 daily flights. However, with the expected entry of Southwest Airline Co. (LUV - Analyst Report) into the Caribbean Islands in July 2014, competition may intensify for JetBlue, affecting its market share.

Currently, JetBlue has a Zacks Rank #3 (Hold).

Other Stocks

Better-ranked stocks in this sector include Alaska Air Group, Inc. (ALK - Snapshot Report) and American Airlines Group Inc. (AAL - Snapshot Report). Both the stocks sport a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.