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JetBlue Down on Dismal Load Factor Performance in November

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JetBlue Airways Corporation (JBLU - Free Report) reported traffic results for November. Traffic, measured in revenue passenger miles (RPMs), improved 2.8% year over year to 3.74 billion. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) expanded 4.3% to 4.45 billion.

Load factor or percentage of seats occupied by passengers decreased 120 basis points (bps) to 84.2% in the month as capacity expansion outpaced traffic growth. This decline in load factor seems to have disappointed investors. Consequently, the stock fell 2.7% to $21.59 at the close of trading session on Dec 12.

The Long Island City, NY-based low-cost carrier registered a completion factor (system wide) of 99.7% in November with 86.5% flights on schedule.

On a year-to-date basis, the carrier posted a 3.6% rise in RPMs while ASMs rose 4.5%, both on a year-over-year basis. Load factor contracted 70 bps year over year to 84.5%.

Bullish Q4 RASM View

JetBlue has raised the guidance for fourth-quarter revenue per available seat mile (RASM). The carrier now expects RASM in the range of down 0.5% to up 1.5% (on a year-over-year basis). The revised guidance reflects an improvement from the prior outlook of a decline of 3% to flat year over year. Also, the airline now estimates a curb in the hurricane effect pegged at around 50 basis points, primarily due to Irma and Maria, in the fourth quarter. This projection is also an improvement over the previous forecast of one to two percentage points.

Zacks Rank & Key Picks

JetBlue carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Gol Linhas Aereas Inteligentes S.A. (GOL - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and Deutsche Lufthansa AG . While Gol Linhas and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Gol Linhas, International Consolidated Airlines and Deutsche Lufthansa have soared more than 200%, 55% and 100%, respectively, in a year.

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