JetBlue Airways Corporation (JBLU - Analyst Report) recently posted its traffic update for September, which reflects a significant increase in the metric. Revenue passenger miles (RPMs) – a measure of traffic – climbed 10.8% on a year-over-year basis to 3.43 billion. Average seat miles (ASMs) – a measure of capacity – rose 7.9% to 4.13 billion in Sep 2016.
Load factor (percentage of seats filled by passengers) expanded 210 basis points to 83.2% in the month as traffic growth outpaced capacity expansion.
The number of departures during Sep 2016 grew 6.4%. The low-cost carrier registered a completion factor of 99.5%, with 78.7% of its flights on schedule. JetBlue’s preliminary revenue per available seat mile (RASM) dropped roughly 2% year over year in September. For the first nine months of 2016, JetBlue witnessed a 10.5% increase in RPMs to 34.43 billion and a 10.3% rise in ASMs to 40.42 billion, both on a year-over-year basis. Load factor improved 10 basis points to 85.2% in the period.
The company reiterated its third-quarter guidance and continues to expect RASM for the quarter to decline 3–4% year over year.
JetBlue also entered into some important strategic agreements in September. These include the code share agreement with Cape Air and a remarkable renewable jet fuel purchase agreement with SG Preston. The company also announced new non-stop flight services between Orlando and Los Angeles.
However, this Zacks Rank #3 (Hold) carrier continues to face tough competition from peers like SkyWest Inc. (SKYW - Snapshot Report) , Alaska Air Group, Inc. (ALK - Analyst Report) and Southwest Airlines Co. (LUV - Analyst Report) . We wait to see how JetBlue performs when it releases third-quarter earnings results on Oct 25, 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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