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JetBlue Reports $49 Million Quarterly Loss
Published on: January 30, 2009
JetBlue Airways Corporation reported its pre-tax results for the fourth quarter and full year 2008. It reported a pre-tax loss of $49 million in the fourth quarter, which includes a special non-cash charge of $53 million related to the valuation of JetBlue’s auction rate securities. Excluding this special charge, JetBlue reported pre-tax income for the quarter of $4 million. This compares to a pre-tax loss of $3 million in the year-ago period. For the full year 2008, JetBlue reported a pre-tax loss of $76 million. Excluding the special charge, JetBlue reported a pre-tax loss of $23 million. This compares to pre-tax income of $41 million for the full year 2007.
JetBlue is evaluating the tax deductibility of the special charge, but has not yet finalized the amount given the technical nature of the issue. As a result, JetBlue is only reporting its pre-tax results. Once the tax treatment for this special charge is finalized, JetBlue will report its net results in mid-February. Operating revenues for the fourth quarter totaled $811 million, representing growth of 9.8 percent over operating revenues of $739 million in the fourth quarter of 2007. For the full year, operating revenues totaled $3.39 billion, representing growth of 19.2 percent over operating revenues of $2.84 billion for the full year 2007.
For the fourth quarter, revenue passenger miles decreased 5 percent year-over-year to 5.9 billion on a capacity decrease of 7.4 percent, resulting in a fourth-quarter load factor of 78.6 percent, an increase of 2.0 points year over year. Yield per passenger mile in the fourth quarter was 12.23 cents, up 12.3 percent compared to the fourth quarter of 2007. Passenger revenue per available seat mile (PRASM) for the fourth-quarter 2008 increased 15.3 percent year-over-year to 9.62 cents. For the full year 2008, PRASM increased 14.0 percent year over year.
Operating expenses for the quarter increased by 7.5 percent, or $53 million, over the prior year period. JetBlue’s operating cost per available seat mile (CASM) for the fourth quarter increased 16.1 percent year-over-year to 10.14 cents. Excluding fuel, CASM increased 17.2 percent to 6.42 cents. For the full year 2008, JetBlue’s CASM, excluding fuel, increased 8.7 percent to 5.94 cents. JetBlue hedged approximately 24 percent of its fuel consumption during the fourth quarter, resulting in a realized fuel price of $2.67 per gallon, a 14 percent increase over fourth quarter 2007 realized fuel price of $2.34. JetBlue recorded $58 million in losses on fuel hedges that settled during the fourth quarter.
Due to the rapid decline in fuel prices during the fourth quarter, JetBlue modified its fuel hedge portfolio, effectively minimizing fuel hedging losses and cash collateral requirements related to further oil price declines. At the end of the fourth quarter, JetBlue had posted approximately $117 million in cash collateral with fuel hedge counterparties related to its 2009 fuel hedge contracts. JetBlue ended the fourth quarter with $561 million in cash and cash equivalents. In addition, JetBlue had $258 million of auction rate securities, net of impairment losses, at the end of the quarter. JetBlue recorded a $53 million accounting charge in the fourth quarter to reflect a decline in the market value of some of its auction rate securities. For more information, visit www.jetblue.com.
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