July 28 (Reuters) – JetBlue Airways on Tuesday reinstated its annual outlook for revenue per available seat mile, a proxy for pricing power, as stronger demand and higher fares helped it recover more of its fuel costs than previously anticipated in the second quarter.
Most U.S. carriers were able to recover close to half of the additional fuel costs stemming from the Middle East war in the second quarter, but their visibility on profits remains mixed. JetBlue’s net loss widened year-over-year as airlines have struggled to completely pass on volatile fuel costs to travelers despite healthy demand.
“Our second-quarter results demonstrate the progress we’re making on the levers within our control,” said Ursula Hurley, JetBlue’s chief financial officer.
The New York-based airline also introduced a long-term profit target of at least $1 per share for 2028, adding that besides volatile fuel prices, the airline remains on track to return to profitability.
JetBlue recaptured 50% of its fuel costs during the second quarter, compared with previous expectations of 30% to 40%. Average airfare during the quarter rose nearly 9% while RASM rose 11%.
Jet fuel retreated from its spring highs following a peace deal signed by Washington and Tehran in June. Fighting between the two nations resumed once more in July, pushing fuel prices higher. However, as they paused fighting over the weekend, oil prices hit a one-week low.
The volatility in energy markets has added billions to U.S. airlines’ quarterly bills, upending margin-recovery plans for smaller airlines such as JetBlue that have limited financial flexibility to deal with the uncertainty.
During the quarter, JetBlue’s fuel bill ballooned by nearly 81%, or roughly $407 million. It paid an average of $4.23 per gallon of fuel during that period. For the full year, JetBlue said it expects to pay $3.49 per gallon of jet fuel.
JetBlue reported an adjusted loss of 66 cents per share in the April-June quarter, while analysts expected a loss of 71 cents per share, according to data compiled by LSEG. Total revenue rose 14.5% to $2.69 billion during the quarter, compared with analyst expectations of $2.68 billion.
(Reporting by Nandan Mandayam in Bengaluru and Doyinsola Oladipo in New York; Editing by Devika Syamnath)
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