JetBlue expects revenues and capacity will come close to pre-Covid 19 levels in the third quarter, though executives said the path to recovery remains uncertain and "nonlinear."
In the second quarter, JetBlue reported $1.4 billion in passenger revenue and $1.5 billion in total revenue, down 29 percent compared with the second quarter of 2019. Capacity was down 15 percent for the quarter compared with 2019 but in June was "largely back to pre-pandemic levels," JetBlue president and COO Joanna Geraghty said. Load factors in June were in the mid-80s percent range, compared with average load factors in the mid-60s in the first quarter, and leisure fares also are nearing pre-pandemic levels this month, she said.
For the third quarter, JetBlue projects capacity will be between 3 percent below and equal to 2019 levels and revenue to be down in the range of 9 percent to 4 percent, according to Geraghty. Like other major U.S. carriers, JetBlue expects to see growing business travel demand in the fall, though executives said they remain cautious about to what extent it returns.
"We are reading lot about some companies moving office openings back from September to October, so we want to be cautious about that," CEO Robin Hayes said in an earnings call on Tuesday. "We've been here before, and we still are concerned a spike in variant cases or other concerns could impact future demand. We've said for over a year now that this could remain a very non-linear path, so we certainly don't want to get ahead of ourselves in setting expectations."
Even so, JetBlue's corporate business—which traditionally has been around 20 percent of its total business—is getting a boost this fall via its new partnership with American Airlines. While executives said they are not yet ready to quantify how the partnership will affect revenues, every percentage point of corporate business that it is able to increase is equal to about $25 million in revenue, JetBlue head of revenue and planning Scott Laurence said.
"We create an environment where our corporate customers see more JetBlue service and see our fare structures, which means their realized fares and average fares will come down in a number of these markets as they see JetBlue is competing," Laurence said. "As we see the customer response, we're happy so far."
JetBlue also remains on track to start its inaugural transatlantic service to London next month, though Hayes said he is "frustrated" that there still are no plans for a travel corridor between the United States and United Kingdom. The carrier plans to operate daily service in August, which will coincide with some "training events" as the service begins, and then dial it back in September if travel remains restricted between the two countries, Hayes said.
"There is news today that the U.K. will open for U.S. vaccinated travelers, but I don't know if that's going to happen or not," Hayes said. "We've been there so many times with potential good news that's then been dashed, but we'll continue to stay flexible and will match the capacity to the demand."
Once a corridor opens, demand will "bounce back quickly," he added.
JetBlue reported a net income of $64 million for the second quarter, compared with a loss of $320 million in the second quarter of 2020. Excluding federal payroll support and other special items, the carrier had a $206 million loss for the most recent quarter.
JetBlue is on track to generating pre-tax profits in July and August, according to acting CFO Ursula Hurley.
RELATED: JetBlue Q1 earnings