With recovery still constrained by a persistent Covid-19 spike in the United States, JetBlue Airways is focused on limiting fixed costs in 2021 in preparation for the pandemic's end and demand's return, executives said Thursday during the company's fourth-quarter earnings call.
Fourth-quarter passenger revenue declined 68.9 percent year over year to about $606 million, and total operating revenue declined 67.4 percent to about $661 million. While that passenger revenue decline was not as sharp as the 76.4 percent year-over-year decline in the third quarter, fourth-quarter demand nevertheless was inconsistent and waned amid the November Covid resurgence.
Demand remains limited so far in the first quarter, JetBlue president and COO Joanna Geraghty said, and the carrier estimates operating revenue to decline between 65 percent and 70 percent from first-quarter 2019 levels. "We believe that we will begin to see material revenue recovery when there is a meaningful and sustained decrease in Covid case counts," she said. "As proof points, we saw demand accelerate back in May and August when case counts started to decline."
The carrier will take a "cautious view in the short term" regarding demand, said JetBlue CEO Robin Hayes. "I don't think there’s any medals right now for overpromising on revenue." Hayes said the carrier would "size our company for margin expansion … to take advantage of the demand as and when it comes back."
JetBlue daily cash burn for the fourth quarter was $6.7 million, according to the carrier. (JetBlue no longer will report that metric, said CFO Steve Priest, in favor of reporting earnings before interest, taxes, depreciation and amortization.) To reduce that figure, JetBlue is focused on reducing 2021 operating costs by more than $1.2 billion from 2019 levels and fixed costs by $150 million to $200 million compared with 2019.
JetBlue for the fourth quarter reported a net loss of $381 million, compared with net income of $161 million for the fourth quarter of 2019. For the full year, JetBlue reported a net loss of $1.36 billion.
RELATED: JetBlue Q3 earnings