On May 10, JetBlue Airways (JBLU) reported its operating performance for April. The company’s traffic (or revenue passenger miles) rose 6.6% YoY, marking the 15th straight month of passenger traffic growth. For the YTD period, the company’s traffic grew by 7.1%.
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The company’s preliminary completion factor of 98.6% in April was the highest in this year so far. In January, February, and March, JetBlue Airways’ completion factors were 96%, 98.5%, and 98.4%, respectively. Additionally, the company’s on-time performance was 73.4%.
However, the New-York-based low-cost carrier’s traffic growth remained lower than the capacity (or available seat mile) growth rate for both the periods. In April and YTD, JetBlue Airways’ capacity grew 7.4% and 9.4%, respectively.
The company has been enhancing its capacity to capitalize on growing demand in the domestic and international markets. A low unemployment rate and a steady rise in wages over the last year have been driving the travel demand in the local market.
As a result of lower traffic growth compared to capacity growth, JetBlue Airways’ utilization rate or load factor contracted 60 basis points to 85.1% in April. YTD, the company’s load factor declined 170 basis points to 83.2%.
Reiterated Q2 unit revenue outlook
Concurrent with its operating performance for April, JetBlue Airways reaffirmed its revenue per available seat mile (or RASM) forecast for the second quarter. The company continues to anticipate the key metric, which is also known as unit revenue, to increase in the 1%–4% range.
The company didn’t update the outlook for capacity additions and ex-fuel CASM (or cost per available seat mile). During the first-quarter earnings release, it projected capacity would grow between 4.5% and 6.5% during the second quarter. The company anticipates ex-fuel CASM to increase in the range of 1.5%–3.5%.
Investors can gain exposure in the airline industry by investing in the US Global Jets ETF (JETS), which invests in passenger and cargo airlines, aircraft manufacturers, and airport and terminal services companies. The ETF has returned 5.6% in the year so far, underperforming the Dow Jones gain of 8.6%.