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JetBlue’s (JBLU) Traffic and Capacity Grow in September


JetBlue Airways Corporation JBLU recently posted its traffic update for September, which reflects a significant increase in the metric. Revenue passenger miles (RPMs) – a measure of traffic – climbed 10.8% on a year-over-year basis to 3.43 billion. Average seat miles (ASMs) – a measure of capacity – rose 7.9% to 4.13 billion in Sep 2016.

Load factor (percentage of seats filled by passengers) expanded 210 basis points to 83.2% in the month as traffic growth outpaced capacity expansion.

The number of departures during Sep 2016 grew 6.4%. The low-cost carrier registered a completion factor of 99.5%, with 78.7% of its flights on schedule. JetBlue’s preliminary revenue per available seat mile (RASM) dropped roughly 2% year over year in September. For the first nine months of 2016, JetBlue witnessed a 10.5% increase in RPMs to 34.43 billion and a 10.3% rise in ASMs to 40.42 billion, both on a year-over-year basis. Load factor improved 10 basis points to 85.2% in the period.

The company reiterated its third-quarter guidance and continues to expect RASM for the quarter to decline 3–4% year over year.

New Routes

JetBlue also entered into some important strategic agreements in September. These include the code share agreement with Cape Air and a remarkable renewable jet fuel purchase agreement with SG Preston. The company also announced new non-stop flight services between Orlando and Los Angeles.

However, this Zacks Rank #3 (Hold) carrier continues to face tough competition from peers like SkyWest Inc. SKYW, Alaska Air Group, Inc. ALK and Southwest Airlines Co. LUV. We wait to see how JetBlue performs when it releases third-quarter earnings results on Oct 25, 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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