JetBlue shares tumble nearly 19% after airline lowers 2024 revenue outlook

JetBlue Airways shares tumbled greater than 18% Tuesday after the airline lowered its 2024 revenue forecast, a setback because it tries to return to profitability.

The service mentioned second-quarter revenue would doubtless drop as a lot as 10.5% on the yr, greater than double the decline analysts polled by LSEG anticipated. New York-JetBlue forecast full-year gross sales would drop within the low single digits, additionally beneath Wall Street expectations, after estimating flat gross sales for the yr in its January report.

JetBlue has been on a cost-cutting spree, culling unprofitable routes, and specializing in these with regular demand and excessive gross sales for premium seats. The service final month called off its merger agreement with price range service Spirit Airlines after a decide blocked that $3.eight billion deal on antitrust grounds.

The outlook replace Tuesday exhibits a rising divide between JetBlue and its bigger rivals which have huge worldwide networks like Delta and United, which have forecast profits, sturdy revenue and record demand this summer.

“As we look to the full year, significant elevated capacity in our Latin [America] region, which represents a large portion of JetBlue’s network, will likely continue to pressure revenue and we expect a setback in our expectations for the full year,” Joanna Geraghty, who became CEO in February, mentioned in an earnings release. “We have full confidence that continuing to take action on our refocused standalone strategy is the right path forward to ultimately return to profitability again.”

JetBlue is affected by a Pratt & Whitney engine recall that has grounded a few of its planes.

“It’s definitely a big hinderance,” Geraghty instructed CNBC of the engine situation. “Pratt’s a good partner. We’re focused on trying to make progress on compensation with them. We’re not where we need to be. … But that is ultimately what is depressing our growth.”

Geraghty mentioned the airline expects decrease capability subsequent yr.

In an investor presentation Tuesday, the airline mentioned it was “actively exploring” extra price cuts. JetBlue earlier this yr mentioned it will defer $2.5 billion in aircraft spending till the top of the yr.

In the primary three months of the yr, JetBlue misplaced $716 million, or $2.11 per share, in contrast with a lack of $192 million, or 58 cents a share, in the identical interval of 2023.

Adjusting for one-time objects, together with break-up prices associated to the failed Spirit merger, JetBlue misplaced $145 million, or 43 cents per share, narrower than the 52-cent adjusted loss analysts polled by LSEG anticipated.

Revenue dropped 5.1% from final yr to $2.21 billion, matching LSEG revenue expectations.

Bright spots included sturdy demand within the peak journey interval, home and Europe flights “as well as continued outsized demand for our premium seating options,” mentioned JetBlue’s President, Marty St. George, who returned to the airline earlier this yr.

— CNBC’s Phil LeBeau contributed to this report.