JetBlue: Double-Digit Q1 Growth in Contracted Corp. Business

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JetBlue executives didn’t share much about corporate travel on the company’s Tuesday morning quarterly earnings call, but JetBlue president Marty St. George, who recently rejoined the carrier, noted improving domestic results “supported by double-digit year-over-year growth in contracted corporate travel revenue.”

Still, the carrier reiterated comments from a quarter ago that demand trends in JetBlue’s core geographies and from core customers have changed “considerably” since before the pandemic, and many of these changes play to the airline’s strengths, said JetBlue CEO Joanna Geraghty. 

“Leisure travel remains an increasing priority for customers, and there is no longer the same divide between corporate and leisure travel as more people take advantage of the ability to work from anywhere,” she added. 

This breakdown in the divide between leisure and corporate in part has caused other carriers to shift capacity to “many of JetBlue’s bread-and-butter routes,” Geraghty said. “Specifically, we continue to see elevated capacity in the Latin region, which represents 35 percent of our total [capacity]. The elevated capacity in this region is significantly pressuring the overall revenue acceleration we expected to see from the first quarter into the second quarter.”

As a result, JetBlue revised its full-year guidance and no longer expects to approach breakeven adjusted operating margin for the full year, Geraghty said.

The carrier during the quarter also shrunk its network—capacity was down 2.7 percent year over year—and announced exits from seven destinations, up from the five announced in March, along with reduced flights to and from Los Angeles and LaGuardia. The carrier also is continuing to make changes based on the termination of the Northeast Alliance with American Airlines.

“We’re focused on being highly relevant in our key focus cities, and over the last several years, some of that relevance came at the expense of those focus cities because we paused things for Spirit because the NEA was in place that we had to draw down from certain areas,” Geraghty said, referring to JetBlue’s aborted effort to acquire Spirit Airlines. 

“If you look over the last five years, we’ve actually done a lot of compromising on the schedules to take advantage of things like the NEA,” St. George added. “Frankly, going from 20-something flights to 50-something flights in LaGuardia, those planes came from somewhere and a lot of that came from schedule quality.”

St. George noted that starting this month, JetBlue will operate under 30 daily flights from LaGuardia, down from 50 this time last year, with another planned reduction anticipated for the end of October. 

JetBlue Q1 Metrics

JetBlue reported first-quarter passenger revenue of nearly $2.1 billion, down 5.8 percent year over year. Total revenue was more than $2.2 billion, down 5.1 percent for the same period. The company’s net loss was $716 million compared with a net loss of $192 million in Q1 2023. The average fuel price for the first quarter was $2.97 per gallon.

The carrier expects second-quarter capacity to be down 2 percent to 5 percent year over year, with full-year 2024 capacity to be down in the low single digits. The carrier projects Q2 revenue to be down 6.5 percent to 10.5 percent, and full-year revenue also to be down in the low single digits. Second-quarter average fuel estimates are $2.98 to $3.13 per gallon.

RELATED: JetBlue Q4 performance

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