JetBlue revenue forecast gets lift from strong demand, outage-linked bookings
10:12 am Thursday, September 05th, 2024
By Shivansh Tiwary
(Reuters) -JetBlue Airways raised its third-quarter revenue forecast on Thursday as the company benefited from efforts to streamline operations, strong summer travel and demand from travelers seeking alternatives due to a global cyber outage.
The company’s bookings got a boost as JetBlue was not one of the primary carriers affected by the flight delays and cancellations in July, following the outage caused by a software update by cybersecurity firm CrowdStrike.
JetBlue now expects September-quarter revenue in the range of a 2.5% decline to 1% growth year-on-year. It had earlier forecast revenue to drop somewhere between 1.5% and 5.5%.
The company’s shares were up 6.4% in early trade in a subdued broader market.
“Although some of the positive adjustment may have been temporary, as the carrier picked up some CrowdStrike-impacted passengers in July, the carrier’s overall update looked encouraging,” Citi analyst Stephen Trent wrote in a note.
JetBlue cited stronger bookings in Latin America, one of its major markets, and gains from previously announced cost cuts and cancellations of less-profitable routes for the forecast raise.
The airline has taken several measures to improve its financial performance since the termination of its proposed $3.8 billion merger with ultra-low-cost carrier Spirit Airlines in March.
It has deferred deliveries of 44 new jets from Airbus, reducing planned capital expenditures between 2025 and 2029 by about $3 billion.
JetBlue expects current-quarter unit costs, excluding fuel, to increase between 5% and 7%, compared with a 6%-8% rise forecast earlier.
The airline also expects fuel costs to fall as jet fuel prices moderated in the quarter.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Janane Venkatraman and Sriraj Kalluvila)
