JetBlue Loss Widens to $257 Million as Fuel Bill Jumps 61% and Shares Sink

The JetBlue loss for the third quarter grew to $257 million, up from $143 million a year earlier, and the airline’s stock hit a new low on the day it reported. Management is arguing that the underlying business is improving, but investors are watching the balance sheet more closely than the margin talk.

The biggest driver was fuel. JetBlue’s fuel bill rose 61% to $868 million for the three months ended Sept. 30. On an adjusted basis, the airline lost 60 cents per share, worse than the 55-cent loss analysts polled by LSEG had expected. Revenue of $2.81 billion landed just under the $2.82 billion forecast.

What management says about the JetBlue loss

CEO Joanna Geraghty framed the quarter as better than it looks. She said resilient demand and strong yields pushed revenue well ahead of the company’s initial expectations, which let JetBlue recapture more of the fuel increase than it first thought it could. She said that momentum has carried into the fourth quarter and pointed to Fort Lauderdale as a standout, even as the airline grows capacity there significantly.

Demand does appear to be holding up. Fares are up more than 20% this year, and JetBlue says travelers have kept buying anyway. Higher fuel costs have hurt airline profits across the industry, so JetBlue’s problem is not unique. What sets it apart is how little cushion it has to absorb the hit.

Investors focus on liquidity and creditors

The stock is down more than 40% this month. Part of the anxiety comes from a Wall Street Journal report, published Friday, that a group of JetBlue’s senior creditors is working with restructuring adviser PJT Partners. The airline did not address that report in the material available here, but it did lead its release with balance-sheet figures. It ended the quarter with $2.2 billion in liquidity and a $7 billion unencumbered asset base, including $2.8 billion in aircraft and engines.

Those numbers give the company some room, but the JetBlue loss comes on top of a long record of red ink. The carrier last posted an annual profit in 2019. Executives will face analysts on an earnings call Tuesday at 10 a.m. ET, where questions about long-term financial health are almost certain to dominate.

A turnaround plan with strategic setbacks

JetBlue is midway through a multiyear plan to cut costs and raise revenue by investing in premium products. One example is a new domestic first-class section that recently went on sale. The strategy is meant to move the airline toward more profitable customers and away from a business squeezed by bigger rivals.

Its other paths to scale have been closed off. A federal judge blocked JetBlue’s attempted acquisition of Spirit Airlines, ruling it anticompetitive, and Spirit is now defunct. A judge also stopped a regional partnership with American Airlines that the two carriers said would help them compete in the congested Northeast. JetBlue now has a partnership with United Airlines instead.

The central question is whether better revenue and a premium push can outrun fuel costs and debt pressure. The JetBlue loss suggests the gap is still wide, and the company’s cash and asset cushion will determine how much time the turnaround gets. Tuesday’s call may show whether management can persuade investors and creditors that margins are improving fast enough.

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