JetBlue Airways Corporation (Nasdaq: JBLU) today reported its results for the fourth quarter and full year 2009:
* Pre-tax income of $20 million in the fourth quarter. This compares to a pre-tax loss of $51 million in the year-ago period, which included a special charge of $53 million related to the valuation of JetBlue’s auction rate securities.
* For the full year 2009, JetBlue reported pre-tax income of $99 million. This compares to a pre-tax loss of $90 million for the full year 2008.
* Net income for the fourth quarter was $11 million, or $0.04 per diluted share. This compares to JetBlue’s fourth quarter 2008 net loss of $58 million, or $0.25 per diluted share.
* For the full year 2009, JetBlue reported net income of $58 million, or $0.20 per diluted share. This compares to a net loss of $85 million, or $0.37 per diluted share, for the full year 2008.
“We are proud to have reported a profit in each quarter of 2009, one of only a few U.S. airlines to have done so,” said Dave Barger, JetBlue’s CEO. “We are also pleased to have generated positive free cash flow in 2009 for the first time in JetBlue’s history. These strong results, against the backdrop of a challenging economic environment, reflect the hard work and dedication of our outstanding crewmembers. As we enter our second decade of operations, we remain focused on our goal of building long-term value for our shareholders, customers and crewmembers.”
Operating revenues for the fourth quarter totaled $832 million, representing growth of 2.6% over operating revenues of $811 million in the fourth quarter of 2008. For the full year, operating revenues totaled $3.29 billion, representing a decline of 3.0% over operating revenues of $3.39 billion for the full year 2008.
For the fourth quarter, revenue passenger miles increased 7.4% year-over-year to 6.3 billion on a capacity increase of 6.3%, resulting in a fourth quarter load factor of 79.4%, an increase of 0.8 points year over year.
Yield per passenger mile in the fourth quarter was 11.62 cents, down 5.0% compared to the fourth quarter of 2008. Passenger revenue per available seat mile (PRASM) for the fourth quarter 2009 decreased 4.0% year-over-year to 9.23 cents and operating revenue per available seat mile (RASM) decreased 3.6% year-over-year to 10.41 cents.
Operating expenses for the quarter increased 0.9%, or $6 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the fourth quarter decreased 5.2% year-over-year to 9.62 cents. Excluding fuel, CASM increased 6.4% to 6.71 cents.
Fuel Expense and Hedging
JetBlue hedged approximately 66% of its fuel consumption during the fourth quarter, resulting in a realized fuel price of $2.08 per gallon, a 24.1% decrease over fourth quarter 2008 realized fuel price of $2.75. JetBlue recorded $1 million in gains on fuel hedges that settled during the fourth quarter.
JetBlue’s fourth quarter fuel price includes approximately $8 million in fuel taxes. During the quarter, JetBlue reclassified its fuel taxes from other operating expenses to fuel expense for both the current and all prior periods. Excluding these taxes, JetBlue’s fourth quarter fuel price was $2.01 per gallon.
JetBlue has hedged approximately 64% of its first quarter projected fuel requirements and 45% of its 2010 projected fuel requirements with a combination of crude call options, jet fuel swaps and heating oil collars. JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $2.18 in the first quarter and $2.26 for the full year 2010.
Balance Sheet Update
JetBlue ended the year with $1.1 billion in unrestricted cash and short term investments.
“During 2009, we improved upon our already strong financial position while maintaining one of the best liquidity positions in the U.S. airline industry relative to our size,” said Ed Barnes, JetBlue’s CFO. “With minimal debt maturities and capital commitments in the upcoming year, we believe JetBlue is positioned to generate positive free cash flow and maintain strong liquidity in 2010.”
First Quarter and Full Year Outlook
“Looking ahead to 2010, we will continue to invest in strategic areas of our business,” said Barnes. “While we expect the transition to our new customer service system as well as the timing of certain aircraft maintenance expense to pressure costs during the first half of the year, we expect these unit cost increases to be offset by higher revenue from product and network initiatives in the second half of the year.”
For the first quarter of 2010, PRASM and RASM are expected to be in the range of down one to up two percent year over year. CASM is expected to increase between seven and nine percent over the year-ago period. Excluding fuel, CASM in the first quarter is expected to increase between six and eight percent year over year.
PRASM and RASM for the full year are expected to increase between five and eight percent year over year. CASM for the full year is expected to increase between five and seven percent over full year 2009. Excluding fuel, CASM in 2010 is expected to increase between three and five percent year over year.
“We will continue to strategically deploy our aircraft to take advantage of attractive growth opportunities, particularly in Boston and the Caribbean,” said Barnes.
Capacity is expected to increase between six and eight percent in the first quarter and to increase between five and seven percent for the full year. JetBlue expects all of its capacity growth to be driven by its Boston and Caribbean markets. Capacity in the rest of JetBlue’s network is expected to decrease year over year.