JetBlue TrueBlue - April '09 numbers reported

They actually look pretty good. LFs are holding strong (up 1.1%) and RASM was up 5% over April '08. There was a 4% drop in ASMs which reflects the move towards fewer transcon flights.

JETBLUE AIRWAYS TRAFFIC RESULTS

April 2009 April 2008 % Change
Revenue passenger miles (000) 2,222,990 2,283,623 (2.7)%
Available seat miles (000) 2,757,046 2,872,250 (4.0)%
Load factor 80.6% 79.5% 1.1 pts.
Revenue passengers 1,954,278 1,938,296 0.8%
Departures 18,336 18,022 1.7%
Average stage length 1,069 1,126 (5.1)%

Y-T-D 2009 Y-T-D 2008 % Change
Revenue passenger miles (000) 8,262,496 8,846,877 (6.6)%
Available seat miles (000) 10,699,535 11,267,287 (5.0)%
Load factor 77.2% 78.5% (1.3) pts.
Revenue passengers 7,245,158 7,456,394 (2.8)%
Departures 71,350 70,287 1.5%
Average stage length 1,066 1,130 (5.7)%



If they can keep this up (and fuel costs down) jetBlue should be able to turn a profit in Q2, just like they did in Q1.

If they can keep this up (and fuel costs down) jetBlue should be able to turn a profit in Q2, just like they did in Q1.

Perhaps a good idea to lock-in fuel costs now.

Perhaps a good idea to lock-in fuel costs now.

The key to such a transaction is finding someone else on the other side willing to make the same bet as you. In other words they need to find someone to sell them the hedges that they want to buy. I don't know that there is much of a market out there for hedges at today's current prices, though I haven't looked (nor do I know where to look).

It wouldn't be a bad idea as they'd know with some certainty what the prices would be, but they have to find someone willing to sell.

The key to such a transaction is finding someone else on the other side willing to make the same bet as you. In other words they need to find someone to sell them the hedges that they want to buy. I don't know that there is much of a market out there for hedges at today's current prices, though I haven't looked (nor do I know where to look).

It wouldn't be a bad idea as they'd know with some certainty what the prices would be, but they have to find someone willing to sell.

B6 could buy future contracts on the NYMEX.

http://www.nymex.com/GE_spec.aspx
http://www.nymex.com/lsco_fut_cso.aspx

B6 could buy future contracts on the NYMEX.

http://www.nymex.com/GE_spec.aspx
http://www.nymex.com/lsco_fut_cso.aspx

The NYMEX is an exchange. They would still need someone to sell them the futures in the volumes they wish to purchase.

jetBlue is 8% hedged through the rest of 2009 (http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=1279777&highlight=) and projects a cost/gallon of $1.90 over the course of the year. The spot price today is ~$1.41 (http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm). So someone would have to bet that the fuel prices are going to drop even more from where they are and take that bet with jetBlue on the other side.

Plus, jetBlue would have to put up a lot of cash to cover the hedges and cash is a rather precious commodity in the airline industry right now. They already have $63MM tied up with hedging contracts; that's about 10% of their free cash position right now. I don't know how much more they'll be able to tie up in hedges.