JetBlue profit falls as fuel costs rise

Markets Reuters

CHICAGO (Reuters) - JetBlue Airways <JBLU.O> reported a 19 percent drop in second-quarter profit despite rising revenue as fuel prices battered the low-cost carrier and its rivals in the United States.

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The airline said on Tuesday its fuel costs jumped 57.6 percent from a year ago. This trend has dominated U.S. airline earnings.

JetBlue shares dipped 3.41 percent to $5.10 on Nasdaq and hit their lowest prices since March 2010.

"The sharp increase in the price of fuel has clearly had a negative impact on the entire industry," JetBlue Chief Executive Dave Barger said on a conference call with analysts and reporters.

Other top airlines like United Continental Holdings <UAL.N> and US Airways Group <LCC.N> in the last week have reported narrowed profits in the second quarter due to rising fuel burdens.

The airline industry is struggling to recover from a years-long downturn that has been exacerbated in recent years by economic woes that drained travel demand. Some experts fear that weaker demand could hamper airline bookings in the fall.

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JetBlue said its second-quarter earnings fell to $25 million, or 8 cents per share, from $31 million, or 10 cents per share, a year earlier. The latest results just missed Wall Street forecasts of 9 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 22.4 percent to $1.2 billion, although JetBlue's fuel bill increased 57.6 percent to $439 million.

JetBlue said that for the third quarter, it expects its unit costs including fuel to increase between 13 percent and 15 percent from a year earlier. Excluding fuel, its unit costs are expected to decrease between 2 percent and 4 percent.

JetBlue ended the second quarter with $1.2 billion in unrestricted cash and short term investments.

(Reporting by Kyle Peterson; Editing by Lisa Von Ahn, Dave Zimmerman)

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