JetBlue’s Q2’16 Earnings Preview: Capacity Expansion And Mint Services To Drive Results

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JBLU: JetBlue Airways logo
JBLU
JetBlue Airways

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Key Trends:

  • JetBlue revised its capacity guidance for the full year from 8.5% – 10.5% to 8.0% – 9.5% to manage its declining unit revenues and increasing fuel cost. Yet, its capacity growth still remains fairly high as compared to the peers. However, the growth in revenues due to capacity expansion is expected to be offset by the impact of its declining PRASM.
  • The airline is expanding its premium seat offering, “Mint,” domestically in Fort Lauderdale, Los Angeles, San Diego, and internationally in Aruba, Barbados, and St. Maarten. Since the premium Mint service yields higher margins compared to its regular seats, this expansion is likely to boost the airline’s revenues and margins over the next few quarters.
  • Crude oil prices have improved more than 35% in the last three months due to production cuts in the U.S., geopolitical disturbances in Venezuala and Nigeria, and a wild-fire in Alberta, Canada. This is expected to cause the airline’s fuel price to exceed its guidance for the quarter, in turn pulling down the carrier’s operating margins.
  • The company is concentrating on cutting its non-fuel expenditure by promoting operational expertise, to offset higher fuel costs.

See Our Complete Analysis For JetBlue here

Relevant Articles
  1. Should You Pick JetBlue Stock At $6 After Q4 Beat?
  2. What’s Next For JetBlue Stock After A 35% Fall This Year?
  3. Here’s What To Expect From JetBlue’s Q2
  4. Will JetBlue Stock Recover To Its Pre-Inflation Shock Highs?
  5. What Led To A 62% Fall In JetBlue Stock Since 2019?
  6. Forecast Of The Day: JetBlue’s Passenger Yield

Have more questions about JetBlue Corporation (NYSE:JBLU)? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for JetBlue Corporation

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