FOR IMMEDIATE RELEASE | CONTACT: |
Investor Relations
Ph. (718) 709-2202
ir@jetblue.com
Corporate Communications
Ph. (718) 709-3089
CorporateCommunications@jetblue.com
JETBLUE ANNOUNCES 10.3% OPERATING MARGIN FOR THIRD QUARTER 2007
New York, (October 23, 2007) – JetBlue Airways Corporation (Nasdaq: JBLU) today reported its results for the third quarter 2007:
• | Operating revenues for the quarter totaled $765 million, representing growth of 21.9% over operating revenues of $628 million in the third quarter of 2006. |
• | Operating income for the quarter was $79 million, resulting in a 10.3% operating margin, compared to operating income of $41 million and a 6.6% operating margin in the third quarter of 2006. |
• | Pre-tax income for the quarter was $46 million, resulting in a 6.0% pre-tax margin, compared with pre-tax income of $1 million and a 0.2% pre-tax margin in the year-ago period. |
• | Net income for the quarter was $23 million, representing earnings of $0.12 per diluted share, compared with third quarter 2006 net loss of $0.5 million, or $0.00 per diluted share. |
‘‘We are very pleased with our strong performance this quarter,’’ said Dave Barger, JetBlue’s CEO. ‘‘Thanks to the dedication of our crewmembers, we continued to drive revenue growth, productivity improvements and cost discipline. Our crewmembers are the reason Conde Nast Traveler readers recently named JetBlue best domestic airline for the sixth straight year.’’
During the third quarter, JetBlue achieved a completion factor of 98.9% of scheduled flights, compared to 99.6% in 2006. On-time performance, defined by the U.S. Department of Transportation as arrivals within 14 minutes of schedule, was 73.7% in the third quarter compared to 74.6% in the same period in 2006. JetBlue attained a load factor in the third quarter of 2007 of 82.0%, an increase of 1.6 points on a capacity increase of 10.9% over the third quarter of 2006.
‘‘JetBlue’s crewmembers continue to deliver exceptional customer service, despite the operational challenges we continue to face in the Northeast,’’ said Russ Chew, JetBlue’s President and COO. ‘‘We are very proud of the efforts our crewmembers made this quarter.’’
JetBlue to Discontinue Operations in Columbus and Nashville
JetBlue announced today it will discontinue operations in Columbus, OH and Nashville, TN, effective January 6, 2008.
‘‘We are taking the difficult but necessary step to discontinue operations in these two markets,’’ Mr. Barger said. ‘‘After more than 12 months of service and a detailed review of traffic and revenue trends in these two cities, we have decided to redeploy our assets.’’
Financial Performance
For the third quarter, revenue passenger miles increased 13.0% from the third quarter of 2006 to 6.8 billion. Yield per passenger mile in the third quarter was 10.40 cents, up 7.0% compared to the third quarter of 2006. Passenger revenue per available seat mile (PRASM) increased 9.1% year-over-year to 8.52 cents. Available seat miles grew 10.9% year-over-year to 8.4 billion. Operating expenses for the third quarter were $686 million, up 17.0% from the third quarter of 2006. Operating expense per ASM (CASM) for the third quarter 2007 increased 5.5% year-over-year to 8.22 cents. During the quarter, realized fuel price was $2.13 per gallon, a 0.6% increase over third quarter 2006 realized fuel price of $2.12 per gallon. Excluding fuel, CASM increased 5.3% year-over-year. Average
stage length during the third quarter was 1,161 miles, down 1.7% from a year ago. JetBlue ended the quarter with $844 million in cash and investment securities.
Fourth Quarter and Full Year Outlook
Looking ahead, for the fourth quarter of 2007, JetBlue expects to report an operating margin between three and five percent based on an assumed aircraft fuel cost per gallon of $2.23, net of hedges. Pre-tax margin for the quarter is expected to be between negative one and one percent. CASM is expected to increase between 11 and 13 percent over the year-ago period. Excluding fuel, CASM in the fourth quarter is expected to increase between six and eight percent year over year. Capacity is expected to increase between 10 and 12 percent in the fourth quarter and stage length is expected to increase roughly four percent over the same period last year.
For the full year 2007, JetBlue expects to report an operating margin between five and seven percent based on an assumed aircraft fuel cost per gallon of $2.07, net of hedges. Pre-tax margin for the full year is expected to be between one and three percent. CASM for the full year is expected to increase between six and eight percent over full year 2006. Excluding fuel, CASM in 2007 is expected to increase between five and seven percent year over year. Capacity for the full year 2007 is expected to increase between 11 and 13 percent over 2006 and stage length is expected to decrease roughly five percent over full year 2006.
JetBlue will conduct a conference call to discuss its quarterly earnings today, October 23, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
New York-based JetBlue Airways has created a new airline category based on value, service and style. Known for its award-winning service and free TV as much as its low fares, JetBlue is now pleased to offer customers the most legroom throughout coach (based on average fleet-wide seat pitch for U.S. airlines). JetBlue is also America’s first and only airline to offer its own Customer Bill of Rights, with meaningful and specific compensation for customers inconvenienced by service disruptions within JetBlue’s control. Visit www.jetblue.com/promise for details. JetBlue serves 53 cities with up to 525 daily flights. With JetBlue, all seats are assigned, all travel is ticketless, all fares are one-way, and an overnight stay is never required. For information or reservations call 1-800-JETBLUE (1-800-538-2583) or visit www.jetblue.com.
DIRECTV(r) service is not available on flights outside the continental United States; however, where applicable, FOX InFlight(tm) is offered complimentary on these routes. FOX InFlight(tm) is a trademark of Twentieth Century Fox Film Corporation. JetBlue’s in-flight entertainment is powered by LiveTV, a wholly owned subsidiary of JetBlue.
This press release contains statements of a forward-looking nature which represent our management’s beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, our extremely competitive industry; increases in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy, including the ability to operate reliably the EMBRAER 190 aircraft; our significant fixed obligations; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market and the effect of increased congestion in this market; our reliance on automated systems and technology; ou r being subject to potential unionization; our reliance on a limited number of suppliers; changes in or additional government regulation; changes in our industry due to other airlines’ financial condition; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to, the Company’s 2006 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
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JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
Three Months Ended September 30, | Percent Change | Nine Months Ended September 30, | Percent Change | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||||||||||||||||||||
Passenger | $ | 712 | $ | 589 | 20.9 | $ | 1,959 | $ | 1,631 | 20.1 | ||||||||||||||||||||||||||||||||
Other | 53 | 39 | 36.1 | 144 | 99 | 46.2 | ||||||||||||||||||||||||||||||||||||
Total operating revenues | 765 | 628 | 21.9 | 2,103 | 1,730 | 21.6 | ||||||||||||||||||||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||||||||||||||||||||
Salaries, wages and benefits | 159 | 140 | 14.2 | 481 | 406 | 18.6 | ||||||||||||||||||||||||||||||||||||
Aircraft fuel | 249 | 212 | 17.4 | 665 | 564 | 17.8 | ||||||||||||||||||||||||||||||||||||
Landing fees and other rents | 44 | 42 | 7.0 | 136 | 117 | 16.9 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 44 | 39 | 14.4 | 129 | 110 | 17.4 | ||||||||||||||||||||||||||||||||||||
Aircraft rent | 32 | 27 | 15.1 | 92 | 74 | 23.8 | ||||||||||||||||||||||||||||||||||||
Sales and marketing | 32 | 27 | 19.3 | 92 | 77 | 19.1 | ||||||||||||||||||||||||||||||||||||
Maintenance materials and repairs | 25 | 23 | 8.2 | 78 | 67 | 16.6 | ||||||||||||||||||||||||||||||||||||
Other operating expenses | 101 | 77 | 29.9 | 291 | 252 | 15.4 | ||||||||||||||||||||||||||||||||||||
Total operating expenses | 686 | 587 | 17.0 | 1,964 | 1,667 | 17.8 | ||||||||||||||||||||||||||||||||||||
OPERATING INCOME | 79 | 41 | 91.4 | 139 | 63 | 121.3 | ||||||||||||||||||||||||||||||||||||
Operating margin | 10.3 | % | 6.6 | % | 3.7 | pts. | 6.6 | % | 3.6 | % | 3.0 | pts. | ||||||||||||||||||||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | (58 | ) | (45 | ) | 29.2 | (166 | ) | (124 | ) | 33.4 | ||||||||||||||||||||||||||||||||
Capitalized interest | 11 | 7 | 58.9 | 30 | 19 | 54.7 | ||||||||||||||||||||||||||||||||||||
Interest income and other | 14 | (2 | ) | (737.8 | ) | 41 | 21 | 95.3 | ||||||||||||||||||||||||||||||||||
Total other income (expense) | (33 | ) | (40 | ) | (17.4 | ) | (95 | ) | (84 | ) | 12.9 | |||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 46 | 1 | 44 | (21 | ) | |||||||||||||||||||||||||||||||||||||
Pre-tax margin | 6.0 | % | 0.2 | % | 5.8 | pts. | 2.1 | % | (1.2 | )% | 3.3 | pts. | ||||||||||||||||||||||||||||||
Income tax expense (benefit) | 23 | 1 | 22 | (3 | ) | |||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) | $ | 23 | $ | — | $ | 22 | $ | (18 | ) | |||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE: | ||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.13 | $ | (0.00 | ) | $ | 0.12 | $ | (0.11 | ) | ||||||||||||||||||||||||||||||||
Diluted | $ | 0.12 | $ | (0.00 | ) | $ | 0.12 | $ | (0.11 | ) | ||||||||||||||||||||||||||||||||
Weighted average shares outstanding (thousands): | ||||||||||||||||||||||||||||||||||||||||||
Basic | 180,154 | 175,569 | 179,298 | 174,538 | ||||||||||||||||||||||||||||||||||||||
Diluted | 198,776 | 175,569 | 184,103 | 174,538 |
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JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS | ||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Percent Change | Nine Months Ended September 30, | Percent Change | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||||
Revenue passengers (thousands) | 5,528 | 4,773 | 15.8 | 16,206 | 13,633 | 18.9 | ||||||||||||||||||||||||||||||||||||
Revenue passenger miles (millions) | 6,848 | 6,062 | 13.0 | 19,526 | 17,522 | 11.4 | ||||||||||||||||||||||||||||||||||||
Available seat miles (ASMs) (millions) | 8,355 | 7,537 | 10.9 | 23,791 | 21,316 | 11.6 | ||||||||||||||||||||||||||||||||||||
Load factor | 82.0 | % | 80.4 | % | 1.6 | pts. | 82.1 | % | 82.2 | % | (0.1 | ) pts. | ||||||||||||||||||||||||||||||
Breakeven load factor (a) | 78.0 | % | 79.7 | % | (1.7 | ) pts. | 81.5 | % | 83.3 | % | (1.8 | ) pts. | ||||||||||||||||||||||||||||||
Aircraft utilization (hours per day) | 13.0 | 12.7 | 1.7 | 12.9 | 12.9 | 0.7 | ||||||||||||||||||||||||||||||||||||
Average fare | $ | 128.83 | $ | 123.41 | 4.4 | $ | 120.87 | $ | 119.63 | 1.0 | ||||||||||||||||||||||||||||||||
Yield per passenger mile (cents) | 10.40 | 9.72 | 7.0 | 10.03 | 9.31 | 7.8 | ||||||||||||||||||||||||||||||||||||
Passenger revenue per ASM (cents) | 8.52 | 7.82 | 9.1 | 8.23 | 7.65 | 7.6 | ||||||||||||||||||||||||||||||||||||
Operating revenue per ASM (cents) | 9.16 | 8.33 | 9.9 | 8.84 | 8.11 | 8.9 | ||||||||||||||||||||||||||||||||||||
Operating expense per ASM (cents) | 8.22 | 7.79 | 5.5 | 8.26 | 7.82 | 5.6 | ||||||||||||||||||||||||||||||||||||
Operating expense per ASM, excluding fuel (cents) | 5.24 | 4.98 | 5.3 | 5.46 | 5.17 | 5.6 | ||||||||||||||||||||||||||||||||||||
Airline operating expense per ASM (cents) (a) | 8.11 | 7.74 | 4.7 | 8.17 | 7.76 | 5.4 | ||||||||||||||||||||||||||||||||||||
Departures | 50,233 | 42,311 | 18.7 | 146,320 | 114,416 | 27.9 | ||||||||||||||||||||||||||||||||||||
Average stage length (miles) | 1,161 | 1,181 | (1.7 | ) | 1,128 | 1,224 | (7.9 | ) | ||||||||||||||||||||||||||||||||||
Average number of operating aircraft during period | 130.7 | 112.0 | 16.7 | 126.3 | 103.4 | 22.2 | ||||||||||||||||||||||||||||||||||||
Average fuel cost per gallon | $ | 2.13 | $ | 2.12 | 0.6 | $ | 2.01 | $ | 2.02 | (0.5 | ) | |||||||||||||||||||||||||||||||
Fuel gallons consumed (millions) | 117 | 100 | 16.8 | 331 | 279 | 18.4 | ||||||||||||||||||||||||||||||||||||
Percent of sales through jetblue.com during period | 74.5 | % | 78.7 | % | (4.2 | ) pts. | 75.0 | % | 80.1 | % | (5.1 | ) pts. | ||||||||||||||||||||||||||||||
Full-time equivalent employees at period end (a) | 9,301 | 9,223 | 0.8 |
(a) Excludes operating expenses and employees of LiveTV, LLC, which are unrelated to our airline operations. |
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
September 30, 2007 | December 31, 2006 | |||||||||||
Cash, cash equivalents and investment securities | $ | 844 | $ | 699 | ||||||||
Total assets | 5,461 | 4,843 | ||||||||||
Total debt | 3,017 | 2,840 | ||||||||||
Stockholders’ equity | 1,024 | 952 |
SOURCE: JetBlue Airways Corporation
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