While some airlines have been struggling with quarter after quarter of poor earnings reports, others have seized on the heightened travel demand to come out stronger.
On July 30, JetBlue Airways (JBLU) posted a second-quarter profit of $25 million. While this is a drop of nearly 82% from a year ago, it is the carrier's first quarterly profit in a year and a significantly better performance than what most analysts had expected. Operating revenue and expenses were both at $2.4 billion while JetBlue also said that it would defer an additional $3 billion in spending on aircraft and other improvements through to 2029 — a projected boost for the bottom line.
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JetBlue shares immediately responded to the news by soaring upwards. At one point in Thursday, stock was up by nearly 18% before dropping slightly to close out the day up 12.31% at $6.66.
'Setting ourselves on a path to restore our balance sheet health'
"We are setting ourselves on a path to restore our balance sheet health, and in support of securing our financial future, we are announcing an incremental aircraft deferral of approximately $3 billion of planned capital expenditures," JetBlue Chief Financial Officer Ursula Hurley said in a statement. "Our focus going forward will be on driving value from our existing asset base and, ultimately, generating positive free cash flow."
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While JetBlue stock has been having a good year overall, Thursday's spike marks the highest it's been in the last three months. Since the start of 2024, shares of the airline are up by 26.38%.
The airline also announced plans to improve profitability further by cutting capacity by up to 6% in the third quarter and 5% for the year. Despite the strong performance this quarter, it expects third-quarter revenue and full-year sales to be a respective 5.5% and 6% lower than last year.
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Similar problems plague the industry but some airlines are coming out ahead
JetBlue's performance is a standout because the aviation industry has been struggling with a number of issues that affected the performance of other airlines.
At the start of July, Spirit Airlines (SAVE) lowered its third-quarter revenue forecast to $1.28 billion from the previous estimate of between $1.32 billion and $1.34 billion while also announcing that it expects a second-quarter loss of between $160 million and $173 million.
After releasing an earnings report showing that second-quarter revenue fell by 46% to $367 million, Southwest Airlines (LUV) CEO Bob Jordan said that "urgent and deliberate steps" were necessary to get the airline back onto a path toward profit — including getting rid of the airline's decades-old open seating policy to allow travelers to pay extra for a pre-assigned seat.
While it fell below the $2.05 per share predicted by LSEG analysts, Delta Air Lines (DAL) also recently reported a record $15.4 billion in revenue excluding sales. Chief executive Ed Bastian said that the lower numbers came because it had to discount economy seats to keep up with competitors last spring.
As the country's primary luxury airline, Delta was better weathered against this by the high number of premium economy and business class tickets it sells; analysts saw these numbers as a bellwether for worse numbers from other airlines.
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