JetBlue's Northeast Alliance with American Airlines became profitable during the second half of 2022, head of revenue and planning Dave Clark said Thursday on a quarterly earnings call.
"The NEA has become measurably margin positive over the past half year, which is terrific," Clark said. "It was more of an investment in the first early days, but it was measurably positive the back half of last year, and we expect that to continue to accelerate."
Clark added that JetBlue is taking share in the Northeast "as a benefit" of the alliance. "We're seeing it in our new [corporate] accounts. We're seeing a higher share from our existing accounts," he said, though noting that contracted corporate accounts contribute a relatively small part of JetBlue's total revenue.
JetBlue president and chief operating officer Joanna Geraghty, however, said that the alliance "isn't just about growing business. It's also about growing leisure for JetBlue." Indeed, the carrier's December announcement for new alliance routes out of New York include several leisure destinations, including Hyannis, Mass.; Nassau, Bahamas; and Bermuda.
"If you look at the route announcement we've made, we are collectively growing business, but also leisure and [visiting-friends-and-relatives] routes," Geraghty said. "So, in all scenarios, we would be better off with the NEA than without the NEA."
Geraghty added that JetBlue in April will operate 190 of 290 combined alliance flights at New York's John F. Kennedy International Airport, and 52 of 190 combined alliance flights at LaGuardia Airport, "which triples our daily departures compared to 2019." In Boston, JetBlue in April will operate about 150 of 220 departures, she said.
When asked about the antitrust lawsuit against the alliance, for which a decision is pending, CEO Robin Hayes said the carrier feels good about the case it made and that it's "hard to see a negative outcome. … I think everyone in Boston and New York is enjoying more JetBlue flying as a result of the NEA. They're seeing more routes."
In addition, JetBlue continues to expect the Spirit Airlines merger to close in the first half of 2024, though it could happen faster if the carrier reaches an agreement with the U.S. Department of Justice, Hayes said. If an agreement isn't reached "and they decide to sue us and we go to court as we did in the NEA, that process can take several months to go through."
Q4, Full-Year Metrics
JetBlue reported total fourth-quarter 2022 revenue of $2.42 billion, up 31.7 percent year over year. Passenger revenue of $2.27 billion was up 33.7 percent from Q4 2021.
Full-year revenue was $9.16 billion, up 51.7 percent year over year, with 2022 passenger revenue of $8.59 billion, representing an increase of 53.1 percent over the prior year. Quarterly net income was $24 million while the full-year loss was $362 million. First-quarter revenue guidance is for an increase of between 28 percent and 32 percent year over year, with full-year 2023 year-over-year increases in high single-digit to low double-digit percentages.
Fourth-quarter capacity increased 2.4 percent versus Q4 2019. The carrier expects capacity for the first quarter to be 5.5 percent to 8.5 percent higher year over year, with the same range for full-year 2023.
Average fuel cost for the fourth quarter was $3.70 per gallon, including hedges. The estimated price per gallon for the first quarter is $3.20 to $3.35 per gallon, and between $2.95 and $3.15 per gallon for 2023.
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