JetBlue Q3 loss widens to $257M as fuel costs spike 61%

JetBlue Airways reported a net loss of $257 million for the third quarter ended Sept. 30, a figure that exceeds the $143 million loss recorded during the same period last year. The New York-based airline attributed the increased deficit primarily to a 61% jump in fuel expenses, which totaled $868 million for the quarter.

Despite the widening loss, the carrier stated that travel demand remained strong. CEO Joanna Geraghty noted in an earnings release that resilient demand and high yields allowed the company to recapture more of the increased fuel costs than initially projected. She added that this momentum has continued into the fourth quarter, with the Fort Lauderdale hub delivering strong results while the airline expands capacity.

Average fares for JetBlue passengers rose more than 19% during the quarter, reaching $245.11 from $205.67 a year earlier. Revenue for the three months totaled $2.81 billion, slightly missing the $2.82 billion expected by Wall Street analysts compiled by LSEG. The company reported an adjusted loss per share of 60 cents, compared to an expected loss of 55 cents.

JetBlue shares climbed approximately 11% in after-hours trading on Monday following the release. The stock had hit a new low earlier that day, leading the company to seek reassurance from investors regarding its financial trajectory.

Executives will hold an earnings call at 10 a.m. ET on Tuesday to address questions about the airline's long-term health. Analysts are expected to probe the company's balance sheet, which includes $2.2 billion in liquidity and an unencumbered asset base of $7 billion. This asset base includes $2.8 billion in aircraft and engines. The airline’s total debt stood at $8.4 billion as of Sept. 30.

A group of senior creditors is reportedly working with restructuring adviser PJT Partners, according to the Wall Street Journal. CFO Ursula Hurley stated that the company believes it has sufficient liquidity and financing options to bridge toward at least $1 in earnings per share and positive free cash flow by 2028. JetBlue last posted an annual profit in 2019 and is currently executing a multiyear turnaround plan that involves cost cuts and revenue growth through premium seat investments.

The airline faces competition from larger rivals after a federal judge blocked its proposed acquisition of Spirit Airlines as anticompetitive. A separate regional partnership with American Airlines was also blocked by a judge. JetBlue currently maintains a partnership with United Airlines.