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JetBlue Witnesses High Jan Traffic

by Zacks Equity Research

February 15, 2013 | Comments : 0 Recommended this article: (0)

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JetBlue Airways ( JBLU - Analyst Report ) reported robust traffic results for Jan 2013, 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 11.2% year over year to 2.78 billion in the reported month. Consolidated capacity (or available seat miles/ASMs) was 3.41 billion, up 9.9% from Jan 2012.

The load factor or percentage of seats filled by passengers was 81.7%, up 100 basis points. Passenger revenue per available seat mile (PRASM) remained flat year over year. The company registered a completion factor of 99.7%, with on-time performance of 78.3%.

Additionally, JetBlue Airways attempts to increase its coast-to-coast services through new flights. The company plans to start second daily non-stop flights from San Francisco International Airport (SFO) to Fort Lauderdale-Hollywood International Airport. A second daily summer seasonal flight will also start operating between SFO and Austin-Bergstrom International Airport. Both the flights will be effective from May 21.

Long Island City, New York based JetBlue Airways delivered a break-even fourth quarter 2012, missing the Zacks Consensus Estimate earnings of 2 cents as well as the year-ago earnings of 8 cents per share. Total operating revenue climbed 4.2% year over year to $1.19 billion, but lagged the Zacks Consensus Estimate of $1.22 billion.

The American low-cost air service firm – that operates with the youngest and most fuel-efficient fleet among other major U.S. airlines – provides high-quality customer service. For the coming months, JetBlue Airways is well positioned for growth due to its strong brand name, superior in-flight services, fuel hedging strategy, strong liquidity positions and a non-unionized workforce.

However, rising fuel price, competitive pressures, and an uncertain economic situation remains an overhang on the stock. JetBlue Airways currently retains a Zacks Rank #3, implying a Hold rating.

Other Stocks

Airline stocks to look out for in the coming days are Delta Air Lines Inc. ( DAL - Analyst Report ) , Deutsche Lufthansa Aktiengesellschaft ( DLAKY ) and Republic Airways Holdings Inc. ( RJET - Snapshot Report ) . All the 3 firms currently hold a Zacks Rank #1 (Strong Buy).

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