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JetBlue Aug Traffic Improves

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JetBlue Airways Corporation (JBLU - Free Report) reported better traffic across its network for the month of Aug 2013. The carrier reported airline traffic – measured in revenue passenger miles or RPMs – of 3.48 billion, up 6.2% year over year. Consolidated capacity (or available seat miles/ASMs) was also up 7.2% year over year at 4.02 billion.

The load factor or percentage of seats filled by passengers was 86.8%, down 80 basis points. Passenger revenue per available seat mile (PRASM) increased 3% year over year. The company registered a completion factor of 99.9%, with on-time performance of 72.6%.

For the first eight months of 2013, JetBlue Airways generated RPMs of 24.63 (up 7.2% year over year) and ASMs of 28.91 billion (up 7.1% year over year), on a consolidated basis. Load factor was 85.2%, reflecting an improvement of 20 basis points from the corresponding prior-year month.

We expect JetBlue to sustain traffic growth in the coming days based on increasing travel demand, network expansion, fleet re-designing and cost-saving measures. The company’s growing presence in several key markets and penetration into untapped areas will support its growth momentum. JetBlue also signed an interline agreement with British Airways, which will give its customers more options by providing access to the extensive network of the latter.

However, rising fuel prices, competitive pressure and high aircraft maintenance expenses remains the near-term concerns for the company. Recently, the company delivered weak second-quarter 2013 results with earnings and revenues failing to beat the respective Zacks Consensus Estimate.

Delta Airlines Inc. (DAL - Free Report) is another major U.S. airline that reported improved operating performance for Aug 2013, whereas both United Continental Holdings Inc. (UAL - Free Report) and Southwest Airlines Co. (LUV - Free Report) displayed softer traffic.

JetBlue Airways carries a Zacks Rank #4 (Sell).

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