How Has JetBlue Grown In The Last Two Years? How Is It Likely To Grow In The Next Two Years?
JetBlue Corporation (NASDAQ:JBLU) is a U.S.-based airline commanding about 4% of the market share in 2017. The company gains close to 90% of its revenues from its Passenger segment, while the remainder of the revenue comes in from random ancillary fees and charges. In general, the airline has had a pretty good track record. However, like its competitors, the company has suffered from slowing revenues in the past couple of years on lower demand. That said, we expect things to pick up over the next two years, as the economy recovers, leading to more business and leisure travel.
We have created an interactive dashboard analysis to estimate JetBlue’s future revenue based on its expected revenue growth in each of its divisions. Click on the link to modify the figures to arrive at your own price estimate.
Of the $593 million jump in revenues from 2015-2017, revenues from Passenger has accounted for almost $389 of the increase. The company grew its top line at a CAGR of almost 5%. This growth rate was severely affected by increasing pricing competition, capacity cuts in key markets, and overall low demand. However, going forward, we expect this trend to change.
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According to our calculations, in FY 2019, we expect revenues to come in around $1 billion over the FY 2017 figure of $7.01 billion, at a CAGR of 7%. We expect this growth to be driven by increased revenues at Passenger, spurred on by a marked increase in commercial flying, and strong expansion plans. In addition, the company also hopes to increase revenues by expanding on its ancillary revenue opportunities, like its TrueBlue loyalty program, and by strengthening other commercial partnerships.
To understand how we arrived at our FY 2019 revenue figure, please refer to our article titled ‘Is The Market Pricing JetBlue Fairly?‘
In general, it appears as though the company has a lot more going for it in the coming two years. We expect top line CAGR to improve significantly. In this respect, we anticipate the company’s stock price to improve going forward as well.
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