JetBlue warns December travel demand falls below expectations
The carrier has 'expected very strong close-in demand for December'
JetBlue Airways said Tuesday that the low-cost airline's revenue is taking a bit of a hit after demand fell short of expectations this month.
The New York City-based air carrier announced in a securities filing that "the expected very strong close-in demand for December reflected in its prior outlook has materialized below expectations."
JetBlue added it "experienced a negative impact" from Hurricane Nicole, which made landfall in Florida in early November.
On top of that, the negative impact of the holiday calendar timing was also "greater than previously forecasted."
JETBLUE OPTIMISTIC ON HOLIDAY TRAVEL AFTER REACHING 'MILESTONE' IN RECOVERY
As a result, the airline now projects revenue per available seat mile for the fourth quarter will be at the low-end of its prior guidance range, which is about a 15% to 19% increase from 2019.
Still, demand is strong. In its Tuesday filing, JetBlue affirmed that "underlying demand trends continue to be strong with healthy load factors and yields above 2019 levels for both trough and peak travel periods" and that the airline is still generating "strong ancillary revenue performance."
JetBlue says that It's expected to increase capacity — or the amount that it flies — by 1% to 4% during the fourth quarter compared to the same period in 2019.
Fuel costs are expected to average $3.65 in the fourth quarter of 2022.
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INFLATION TO CURB HOLIDAY TRAVEL PLANS
In October, the airline said it was on track for record revenue in 2022.
At the time, JetBlue’s Chief Executive Officer Robin Hayes said the New York-based company, which generated its first quarterly adjusted profit since the start of the coronavirus pandemic, continues to "see a growing appetite for JetBlue’s unique customer value proposition of low fares and great service."
"Throughout the [third] quarter, strong leisure and VFR [visiting friends and relatives] demand trends carried through the peak summer and into the fall trough period. We see that continuing here in the fourth quarter, and we’re confident in the demand backdrop for the year-end holiday peaks. For the fourth quarter, we expect unit revenue to increase between 15% and 19% year over three," JetBlue said in its third quarter press release.
Operating revenues rose 60% to $6.7 billion for the nine months ended Sept. 30. The net loss widened to $386 million from $53 million year-over-year.