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JetBlue Airways’ Traffic Growth Outpaces Capacity in May

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Traffic increased

On June 12, JetBlue Airways (JBLU) reported its operating performance for May. The airline’s traffic (or revenue passenger miles) rose 5.7% YoY, marking the 16th straight month of passenger traffic growth.

The airline’s preliminary completion factor of 99.7% in May was the highest in this year so far. In January, February, March, and April, JetBlue’s completion factors were 96%, 98.5%, 98.4%, and 98.6%, respectively. Additionally, the company’s on-time performance was 77.6% in May.

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The New-York-based low-cost carrier’s traffic growth rate in May was higher than the capacity (or available seat mile) growth rate. Last month, the company’s capacity grew by 5.4%. Due to higher traffic growth compared to capacity growth, JetBlue’s utilization rate or load factor expanded 20 basis points to 86% in May.

However, for the YTD period, the traffic growth rate of 6.8% remained lower than the capacity growth rate of 8.5%. JetBlue reported capacity growth of 8.5% for the YTD period. JetBlue has been enhancing its capacity to capitalize on growing demand in the US and international markets.

Apart from releasing its operating performance for May, JetBlue updated its unit revenue growth outlook for the second quarter. The company anticipates unit revenues to grow between 2% and 4%.

Peers’ performance

Among big airline companies, Delta Air Lines (DAL) and Hawaiian Holdings (HA) have reported their May traffic so far. Delta and Hawaiian airlines’ traffic rose 7% and 5.8%, respectively, last month.

JetBlue stock has remained the top performer among US airlines. The stock has gained 19.8% in the year so far, outpacing the gains of Delta and Southwest Airlines (LUV), which are up 11.1% and 9.3%, respectively. The stock has also outpaced the returns of the iShares Transportation Average ETF (IYT), which has allocated 19.1% of its funds in the airline industry. The ETF has gained 12% this year so far.

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