JetBlue profit falls as rising costs offset sales

AP News
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Posted: Jul 26, 2011 3:01 PM
JetBlue profit falls as rising costs offset sales

JetBlue said Tuesday that its second-quarter earnings fell 19 percent as rising costs for fuel and maintenance overshadowed rising revenue from higher fares.

The airline, based in New York, earned $25 million, or 8 cents per share, compared with year-ago results of $31 million, or 10 cents per share. Revenue rose 22 percent to $1.15 billion.

Analysts polled by FactSet Research expected a profit of 9 cents per share on $1.13 billion in sales.

JetBlue Airways Corp. says it paid 58 percent more for fuel between April and June than it did the year before. Maintenance costs rose by 29 percent.

JetBlue flew about 8 percent more passengers in the three-month period than it did a year ago, and it made 14 percent more per passenger, mostly due to higher fares. Capacity, or number of available seats, grew by 9 percent as the airline continued its expansion in and out of Boston and the Caribbean. Planes were not as full as a year ago, but occupancy rates still topped 80 percent on average.

JetBlue said in a conference call Tuesday that its plan to attract more business travelers in key cities like New York and Boston is going well. To continue to get more higher-paying fliers on board, the airline said it will soon launch a flat-rate travel pass aimed at business travelers. It didn't say how much the pass would cost. JetBlue chose not to renew its highly popular "All You Can Jet" pass this year, which offered travelers an unlimited month of flights starting in the sluggish travel period after Labor Day. It had offered the pass for the last two years.

For the third quarter, JetBlue expects costs per available seat mile _ a measure of how much it costs to fly a paying passenger a single mile _ to increase between 13 and 15 percent. The airline said all of the increase is attributable to higher fuel prices. Excluding fuel, costs are expected to be down between 2 and 4 percent.

Capacity is expected to increase between nine and 11 percent in the third quarter and between six and eight percent for the full year.