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JetBlue posts 2Q as cost cuts, lower fuel offset declining passenger demand

July 23, 2009, New York (The Associated Press, by Samanth Bomkamp) - JetBlue Airways Corp. said Thursday it posted a second-quarter profit as cost cuts and lower fuel prices balanced out declining passenger demand.


July 23, 2009
Carey Fredericks

July 23, 2009, New York (The Associated Press, by Samanth Bomkamp)
JetBlue Airways Corp. said Thursday it posted a second-quarter profit as cost cuts and lower fuel prices balanced out declining passenger demand.

The low-cost carrier also said it expects to post a profit in the next two quarters. Shares jumped 21 cents, or 4.6 per cent, to $4.78 in premarket electronic trading.

JetBlue said Thursday it earned $20 million, or 7 cents per share, compared with a loss of $9 million, or 4 cents per share, a year ago.

Revenue fell 6 per cent to $807 million.

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Thomson Reuters says analysts forecast a profit of 2 cents per share on revenue of $800.1 million.

Forest Hills, N.Y.-based JetBlue said expenses fell by 13 per cent in the quarter compared with a year earlier.

Passenger traffic in the April to June period fell 3.1 per cent, on a 1.7 per cent decrease in capacity. Airlines cut capacity either through scaling back the number of planes in their fleet, the number of flights on a given route, or by using smaller jets on routes with less demand.

JetBlue also made less money per passenger during the quarter. Its yield per passenger mile fell 4.4 per cent.

The carrier's fuel prices were down about 38 per cent compared with a year ago. JetBlue took $42 million in fuel hedging losses in the period related to bad bets on fuel prices from last year.

JetBlue offered an optimistic outlook for the rest of this year, contrary to most major airlines. It expects to continue posting profits in the third and fourth quarter, although the carrier said revenue will be strained.

JetBlue sees revenue per available seat mile _ or the money it makes to fly one person one mile _ falling between 7 and 10 per cent in the third quarter. Costs to fly one passenger one mile are also expected to fall between 12 and 14 per cent, mostly due to lower fuel prices. Excluding fuel, costs per available seat mile would increase between 9 and 11 per cent, JetBlue said.

The carrier expects to expand capacity slightly _ by between one and three per cent in the third quarter.

For the full year, revenue per available seat mile should drop between two and five per cent, while capacity will remain close to flat.

Costs per available seat mile should fall between 8 and 10 per cent for the year because of cheaper fuel.


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