JetBlue 2Q profit tops forecasts, could add European flights
Jul. 26, 2016
NEW YORK (AP) — Shares of JetBlue Airways Corp. rose Tuesday after the airline reported second-quarter earnings above Wall Street expectations.
JetBlue also said it was ordering more planes to expand its Mint premium service and could add flights to Europe by the end of the decade. The airline currently flies within the United States, the Caribbean and Latin America.
JetBlue said it ordered 30 Airbus A321 jets that will arrive between 2017 and 2023 and outfit some of them with its premium service called Mint. Starting in 2019, it will have the option of converting the orders to a long-range version.
The long-range model "could well be a game-changer for us" and allow JetBlue to fly to Europe "should we choose to do so," CEO Robin Hayes said on a conference call with analysts.
If JetBlue goes ahead with flights to Europe, it would compete against major U.S. and European carriers such as American Airlines, Delta Air Lines, United Airlines and British Airways, and budget carriers such as Norwegian Air Shuttle and Iceland's Wow Air.
The A321, with one main aisle in the cabin, is smaller than many planes used to fly across the Atlantic, but American and United already use single-aisle planes on some of those routes.
New York-based JetBlue, the nation's fifth-biggest airline, said second-quarter net income rose 18.5 percent to $180 million, or 53 cents per share.
Seven analysts surveyed by Zacks Investment Research had forecast 49 cents per share. A year earlier, the airline earned $152 million, or 44 cents per share.
Lower fuel costs helped. JetBlue spent $274 million on fuel, down 26 percent from a year ago.
Revenue rose 2 percent to $1.64 billion. Passenger traffic rose 10 percent, but the average fare dropped 9 percent, to $153.94 each way.
U.S. airlines have been reporting lower average fares for more than a year because they added flights and seats faster than the growth in demand.
In afternoon trading, JetBlue shares climbed $1.11, or 6.4 percent, to $18.39. Its shares started the day down 24 percent in 2016.