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JetBlue's (JBLU) Load Factor Declines in November, Stock Dips

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JetBlue Airways Corporation (JBLU - Free Report) reported traffic figures for November. Traffic, measured in revenue passenger miles (RPMs), increased 9.7% year over year to 4.11 billion. Consolidated capacity (or available seat miles/ASMs) expanded 10.6% to 4.92 billion on a year-over-year basis.

However, load factor or percentage of seats filled by passengers contracted 70 basis points (bps) to 83.5% in the month as traffic growth was outpaced by capacity expansion. This decline in load factor seems to have displeased investors. Consequently, the stock slipped 1.5% at the close of business on Dec 12.

The Long Island City, NY-based low-cost carrier registered a completion factor (system wide) of 99.3% with 71.2% flights on schedule.

In the first 11 months of 2018, the carrier posted a 7.6% rise in RPMs while ASMs grew 6.8%, both on a year-over-year basis. Also, load factor rose 70 bps to 85.2%.


Q4 RASM View Revised

The company now anticipates revenue per available seat mile (RASM) to increase between 1.5% and 3.5% in the fourth quarter of 2018. Previous guidance was an increase in the range of 1-4%. Additionally, the carrier expects capacity to expand between 7.5% and 9.5% in the current quarter. Consolidated operating cost per available seat mile excluding fuel is predicted to decrease in the 1.5-3.5% band during the ongoing quarter. Meanwhile, fourth-quarter fuel cost, net of hedges, is projected to be $2.48 per gallon.

Zacks Rank & Key Picks

JetBlue carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Air France-KLM SA (AFLYY - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and Spirit Airlines, Inc. (SAVE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Air France-KLM and Spirit Airlines have rallied more than 26% and 59%, respectively, in the past six months. Meanwhile, the International Consolidated Airlines stock flaunts an impressive earnings history, having topped the Zacks Consensus Estimate in three of the last four quarters, the average beat being 92.9%.

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