NEW YORK, July 25, 2006 (PRIMEZONE) -- JetBlue Airways Corporation (Nasdaq:JBLU) today reported its results for the second quarter 2006:
-- Operating revenues for the quarter totaled $612 million,
representing growth of 42.4% over operating revenues of
$429 million in the second quarter of 2005.
-- Operating income in the quarter was $47 million, resulting
in a 7.7% operating margin, compared to operating income of
$40 million and a 9.4% operating margin in the second
quarter of 2005.
-- Net income for the quarter was $14 million, representing
earnings of $0.08 per diluted share, compared with second
quarter 2005 net income of $13 million, or $0.08 per
diluted share.
"We are pleased that our Return to Profitability plan is on track. Our comprehensive and ongoing plan has become the new way of doing business at JetBlue, and the revenue improvements and cost savings we saw in the second quarter are a definite step in the right direction," said David Neeleman, JetBlue's Chairman and CEO. "Every JetBlue crewmember contributed to our second quarter results and I truly appreciate their efforts to identify areas of opportunities while continuing to deliver the JetBlue experience to our customers. We have much more to do, and I know JetBlue's crewmembers are as dedicated as ever to returning JetBlue to profitability for the long term."
During the second quarter of 2006, JetBlue achieved a completion factor of 99.8% of scheduled flights versus 99.7% in the second quarter of 2005. On-time performance, defined by the U.S. Department of Transportation as arrivals within 14 minutes of schedule, was 77.9% in the second quarter of 2006 compared to 76.0% for the same period in 2005. The company attained a load factor in the second quarter of 2006 of 82.2%, a decrease of 5.5 points on a capacity increase of 23.2% over the second quarter of 2005.
"JetBlue crewmembers continue to be recognized for their best-in-class service," said President and COO, Dave Barger. "We were honored to receive the highest rankings for customer satisfaction among low cost airlines in the J.D. Power and Associates Airline Customer Satisfaction Survey, as well as the 2006 World's Best Domestic Airline by readers of Travel + Leisure magazine. I am especially appreciative that JetBlue crewmembers have remained focused on our core mission of bringing humanity back to air travel in the midst of changes related to our Return to Profitability plan."
For the second quarter, yield per passenger mile was 9.77 cents, up 21.7% compared to 2005. Operating revenue per available seat mile (RASM) increased 15.6% year-over-year to 8.48 cents. Revenue passenger miles increased 15.6% from the second quarter of 2005 to 5.9 billion. Available seat miles grew 23.2% to 7.2 billion. Operating expenses for the second quarter were $565 million, up 45.2% from the second quarter of 2005. Operating expense per ASM (CASM) for the second quarter 2006 increased 17.8% year-over-year to 7.83 cents, while average stage length decreased 8.4%. On a fuel-neutral to prior year period basis, CASM increased 9.3% to 7.26 cents. During the quarter, realized fuel price was $2.06 per gallon, a 37.8% increase over second quarter 2005 realized fuel price of $1.50. JetBlue ended the second quarter with $468 million in cash and investment securities.
Looking ahead, for the third quarter of 2006, JetBlue expects to report an operating margin between four and six percent assuming an all-in aircraft fuel cost per gallon of $2.20. Pre-tax margin for the quarter is expected to be between negative one and positive one percent. For the third quarter, cost per available seat mile (CASM) is expected to increase between 17% and 19% over the year-ago period, at the assumed $2.20 aircraft fuel cost per gallon. Excluding fuel, CASM in the third quarter is expected to increase between eight and ten percent year over year. Capacity is expected to increase between 19 and 21 percent in the third quarter over the same period last year. For the full year 2006, JetBlue expects to report an operating margin between two and four percent based on an assumed aircraft fuel cost per gallon of $2.09, net of hedges. Pre-tax margin for the full year is expected to be between negative one and positive one percent. CASM for the full year is expected to increase between 14 and 16 percent over full year 2005, at the assumed $2.09 aircraft fuel cost per gallon. Excluding fuel, CASM in 2006 is expected to increase between seven and nine percent year over year. Capacity for the full year 2006 is expected to increase between 20 and 22 percent over 2005.
JetBlue will conduct a conference call to discuss its quarterly earnings today, July 25, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the World Wide Web at http://investor.jetblue.com.
About JetBlue
In the six years since its launch, JetBlue Airways has focused on creating a new airline category -- an airline that offers value, service and style. Based out of New York City, the low-cost carrier currently serves 40 destinations with more than 440 flights daily. Onboard JetBlue, customers enjoy roomy leather seats and 36 channels of free DIRECTV(r) programming(a), the most live TV available on any airline. On flights longer than two hours, a selection of first-run movies and bonus features from FOX InFlight(tm) is also available. JetBlue offers customers generous brand name snacks and beverages, including freshly brewed Dunkin' Donuts coffee, and delicious wines selected by the airline's Low Fare Sommelier, Josh Wesson from Best Cellars. On overnight flights from the West, the airline now offers Shut-Eye Service, with a Shut-Eye Kit(tm) designed exclusively for JetBlue by Bliss Spa and other special amenities including a "good morning" hot towel service. With JetBlue, all seats are assigned, all travel is ticketless, all fares are one-way, and an overnight stay is never required. For information or reservations call 1-800-JETBLUE (1-800-538-2583) or visit www.jetblue.com.
The JetBlue logo is available at http://www.primezone.com/newsroom/prs/?pkgid=795
(a) DIRECTV(r) service is not available on flights outside the continental United States; however, where applicable FOX InFlight is offered complimentary on these routes. FOX InFlight is a trademark of Twentieth Century Fox Film Corporation. JetBlue's in-flight entertainment is powered by LiveTV, a wholly owned subsidiary of JetBlue.
This press release contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward looking statements due to many factors, including, without limitation, our extremely competitive industry; increases in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy, including the integration of the EMBRAER 190 aircraft into our operations; our significant fixed obligations; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market; our reliance on automated systems and technology; our reliance on a limited number of suppliers; changes in or additional government regulation; changes in our industry due to other airlines' financial condition; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to, the Company's 2005 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------- Percent ---------------- Percent
2006 2005 Change 2006 2005 Change
------- ------- ------- ------- ------- -------
OPERATING
REVENUES
Passenger $ 579 $ 411 40.7 $ 1,042 $ 768 35.6
Other 33 18 80.9 60 34 74.3
------- ------- ------- -------
Total operating
revenues 612 429 42.4 1,102 802 37.3
OPERATING
EXPENSES
Salaries, wages
and benefits 134 106 27.1 266 204 30.6
Aircraft fuel 192 111 72.4 352 198 78.0
Landing fees
and other
rents 37 27 39.0 75 53 41.6
Depreciation
and
amortization 37 27 40.8 71 51 39.9
Aircraft rent 25 18 35.4 47 36 30.3
Sales and
marketing 30 20 45.4 50 39 25.8
Maintenance
materials and
repairs 23 14 66.6 44 28 61.0
Other operating
expenses 87 66 30.9 175 128 35.9
------- ------- ------- -------
Total operating
expenses 565 389 45.2 1,080 737 46.5
------- ------- ------- -------
OPERATING INCOME
(LOSS) 47 40 15.5 22 65 (67.1)
Operating
margin 7.7% 9.4% (1.7)pts 2.0% 8.1% (6.1)pts
OTHER INCOME
(EXPENSE)
Interest
expense (42) (25) 64.7 (79) (46) 72.2
Capitalized
interest 7 4 73.4 12 8 58.7
Interest income
and other 13 5 160.6 23 8 186.6
------- ------- ------- -------
Total other
income
(expense) (22) (16) 32.8 (44) (30) 45.0
------- ------- ------- -------
INCOME (LOSS)
BEFORE INCOME
TAXES 25 24 (22) 35
Income tax
expense
(benefit) 11 11 (4) 16
------- ------- ------- -------
NET INCOME $ 14 $ 13 $ (18) $ 19
======= ======= ======= =======
EARNINGS (LOSS)
PER COMMON
SHARE:
Basic $ 0.08 $ 0.08 $ (0.10) $ 0.12
======= ======= ======= =======
Diluted $ 0.08 $ 0.08 $ (0.10) $ 0.12
======= ======= ======= =======
Weighted average
shares out-
standing
(thousands):
Basic 174,771 157,402 174,013 156,947
Diluted 180,841 180,901 174,013 165,665
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
Three Months Ended Six Months Ended
June 30, June 30,
---------------- Percent ---------------- Percent
2006 2005 Change 2006 2005 Change
------- ------- ------- ------- ------- ------
Revenue
passengers
(thousands) 4,525 3,696 22.4 8,860 7,096 24.9
Revenue
passenger
miles (millions) 5,924 5,125 15.6 11,460 9,559 19.9
Available seat
miles (ASMs)
(millions) 7,202 5,846 23.2 13,779 11,015 25.1
Load factor 82.2% 87.7% (5.5)pts 83.2% 86.8% (3.6)pts
Breakeven load
factor(a) 79.5% 82.0% (2.5)pts 85.4% 82.5% 2.9 pts
Aircraft
utilization
(hours per day) 13.0 13.7 (5.6) 12.9 13.5 (4.3)
Average fare $127.87 $111.26 14.9 $117.59 $108.25 8.6
Yield per
passenger mile
(cents) 9.77 8.02 21.7 9.09 8.04 13.1
Passenger
revenue per
ASM (cents) 8.03 7.03 14.2 7.56 6.97 8.4
Operating
revenue per
ASM (cents) 8.48 7.34 15.6 7.99 7.28 9.7
Operating
expense per
ASM (cents) 7.83 6.65 17.8 7.84 6.69 17.1
Operating
expense per
ASM, excluding
fuel (cents) 5.17 4.74 9.0 5.28 4.89 7.9
Airline
operating
expense per
ASM (cents)(a) 7.77 6.58 18.1 7.76 6.63 17.2
Departures 37,688 27,382 37.6 72,105 53,019 36.0
Average stage
length (miles) 1,253 1,369 (8.4) 1,249 1,332 (6.2)
Average number
of operating
aircraft during
period 102.6 74.3 38.1 99.1 72.6 36.5
Average fuel
cost per
gallon $ 2.06 $ 1.50 37.8 $ 1.97 $ 1.41 39.7
Fuel gallons
consumed
(millions) 93 75 25.1 179 141 27.4
Percent of
sales through
jetBlue.com
during period 79.5% 77.4% 2.1 pts 80.8% 76.9% 3.9 pts
Full-time
equivalent
employees at
period end(a) -- -- -- 9,337 7,284 28.2
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
June 30, December 31,
2006 2005
------- --------
Cash, cash equivalents and
investment securities $ 468 $ 484
Total assets 4,306 3,892
Total debt 2,518 2,326
Stockholders' equity 918 911
NON-GAAP FINANCIAL MEASURES (b)
(in millions)
Three Months Six Months
Ended Ended
June 30, 2006 June 30, 2006
------------- -------------
Fuel Neutral Operating Expenses
to Prior Period
Operating expenses as reported $ 565 $ 1,080
Less: Reported aircraft fuel (192) (352)
Add: Aircraft fuel at prior period
cost per gallon 139 252
Profit sharing impact 12 12
------- -------
Fuel neutral operating expenses 524 992
Fuel neutral operating margin 14.4% 10.0%
Fuel neutral operating expense
per ASM (cents) 7.26 7.20
(a) Excludes operating expenses and employees of LiveTV, LLC,
which are unrelated to our airline operations
(b) In management's view, comparative analysis of period-to-period
operating results can be enhanced by excluding the significant
volatility in the price of aircraft fuel, which is subject to
many economic and political factors that are beyond our control,
in addition to the impact of hedging activities. We believe that
the presentation of these non-GAAP financial measures is useful
to management and investors because it is more indicative of our
ability to manage our costs and also assists in understanding the
significant impact that fuel prices have had, and continue to
have, on our operations. Investors should consider these non-GAAP
financial measures in addition to, and not as a substitute for,
our financial performance measures prepared in accordance with
GAAP.