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JetBlue (JBLU) March Traffic Increases, Load Factor Down

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JetBlue Airways Corporation (JBLU - Free Report) posted mixed traffic numbers for March 2019. Even though traffic increased on strong demand for air travel, load factor (percentage of seats filled by passengers) declined as traffic growth was outweighed by capacity expansion.

Traffic (measured in revenue passenger miles or RPMs) improved 7.9% year over year to 4.72 billion. On a year-over-year basis, capacity (or available seat miles/ASMs) rose 12.6% to 5.53 billion. However, load factor for the month contracted 370 basis points (bps) to 85.3%. Load factor declined 210 bps to 82.5% on a year-to-date basis.

 

Q1 View Revised

JetBlue adjusted its guidance for first-quarter 2019 operating revenue per available seat mile (RASM). Detailed results of will be out on Apr 23. The metric is expected to decline 3.1%, with higher-than-expected completion factor hurting RASM to the tune of approximately 0.75 points. Previously, RASM in the soon-to-be-reported quarter was anticipated to decline 1.5-3.5%.

Additionally, the carrier now expects consolidated operating cost per available seat mile, excluding fuel, to increase at or below the lower end of the 1.5-3.5% range. Again, higher-than-expected completion factor resulted in the metric being reduced to the tune of 0.75 points. Meanwhile, first-quarter fuel cost per gallon, net of hedges, is projected in the $2.05-$2.06 range (earlier expectation was $2.01 per gallon).

Service to London Planned

In a bid to compete with the likes of Delta Air Lines (DAL - Free Report) , American Airlines (AAL - Free Report) and United Continental Holdings (UAL - Free Report) , which have a significant presence in the trans-Atlantic market, JetBlue reportedly aims to start operating flights to London in 2021. In fact, the company has been chewing on the idea to serve trans-Atlantic markets for quite some time.

The carrier aims to operate daily flights connecting England’s capital city to New York and Boston. JetBlue intends to start operations using Airbus A321LR single-aisle aircraft. However, the airports in London to which JetBlue will fly are yet to be decided.

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