JetBlue Reports Rising Costs, Shares Dip 24%
New York, NY - JetBlue Airways (JBLU) stock plummeted by approximately 20% during Tuesday morning trading following warnings of escalating costs that could impact its performance through 2025.
In its fourth-quarter earnings report released Tuesday, the New York-based airline projected a 5-7% annual increase in cost per available seat mile (CASM) for 2023, excluding fuel expenses. Simultaneously, revenue per available seat mile (RASM) is anticipated to rise by 3-6% for the year.
JetBlue estimates a revenue range of -0.5% to +3.5% compared to the previous year for the first quarter of 2025. "Through continued progress in 2024, our revenue and reliability initiatives under JetForward, and ongoing cost control efforts, we aim to achieve positive operating margin in 2025," stated Ursula Hurley, JetBlue's Chief Financial Officer.
Amidst the mid-morning trading session on Tuesday, JetBlue shares were valued at $6.40, resulting in a market capitalization of $2.2 billion. Since the failed merger with Spirit Airlines, JetBlue has implemented strategies to revamp its operations, which include route adjustments and enhanced offerings for passengers.
JetBlue became the first airline penalized for frequent runway delays earlier this month, agreeing to a $2 million fine with the Department of Transportation.
"For 2025, our primary focus is executing JetForward and sustaining the momentum from 2024," said Joanna Geraghty, JetBlue's Chief Executive Officer. "Despite challenges ahead, our strategy is designed to confront obstacles effectively. With solid revenue prospects, ongoing cost optimization, and incremental earnings from JetForward, we are confident in our ability to achieve a positive operating margin for the year."
The company reported a $44 million net loss in the fourth quarter, coupled with a 5.1% year-over-year decline in capacity.