JetBlue Ends 2012 with High Traffic

JetBlue Airways (JBLU - Analyst Report) reported impressive traffic results for December 2012 as well as for the full-year when compared with the previous year. The impressive performance came on the back of higher capacity.

The company’s airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – increased 6.1% year over year to 2.87 billion in December 2012. Consolidated capacity (or available seat miles/ASMs) for the month was 3.58 billion, up 6.1% from December 2011.

The load factor or percentage of seats filled by passengers was 80.1%, flat compared with year-ago month. Passenger revenue per available seat mile (PRASM) improved 2% year over year, in accordance with the guidance provided. The company registered completion factor of 99.6%, with on-time performance of 70.2%.

For full year 2012, JetBlue Airways generated RPMs of 33.56 billion (up 9.3% year over year) and ASMs of 40.08 billion (up 7.6% year over year), while load factor was 83.8%, up 140 basis points.

The passenger airline is expected to report its fourth quarter financial results on January 21, 2013. The Zacks Consensus Estimate for the quarter pegs earnings to be 2 cents per share, while that for the year is 41 cents per share. This reflects a year-over-year decline of 73.6% for the quarter and an increase of 45.4% for the year.

Headquartered in Forest Hills, New York, JetBlue Airways has the youngest and most fuel-efficient fleet among other major U.S. airlines and provides high-quality customer service. The company’s aircrafts feature all-leather seats and live satellite television in every seatback.

For 2013, JetBlue Airways will be in advantageous position owing to rising travel demand, optimization of networks and schedules, and cost control measures. The company is also making continues progress in expanding its product and service offerings on board and on the ground to aid growth in ancillary revenues and enhance ticket pricing flexibility.

However, rising fuel price, competitive pressures from strong industry rivals — United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL - Analyst Report) — and economic uncertainty keep us cautious on the stock.

We maintain our long-term Neutral recommendation on the stock. JetBlue Airways currently retains a Zacks Rank #3 (Hold) for a period of 1–3 months.