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JetBlue Posts $347 Million First Quarter Loss, But Sees Stronger Days Ahead

JetBlue Posts $347 Million First Quarter Loss, But Sees Stronger Days Ahead
Joe Cortez

As the COVID-19 pandemic continues to be contained, JetBlue believes they are seeing the light at the end of a long, dark tunnel. The airline posted a GAAP pre-tax loss of $347 million to open 2021, but expects that number to get closer to profitability as the year continues.

Even though JetBlue posted another quarter of losses, executives at the airline believe the hardest part is coming to an end. In an update to investors, the airline posted a GAAP pre-tax loss of $347 million, but is optimistic their recovery plan will bring them back to profitability.

Action Plan Calls for Reduced Losses, Increased Revenue from Loyalty Plan

As the demand for travel continues to rise, the airline believes that profits will continue to grow throughout the year. For the second quarter of 2021, JetBlue projects their revenue will only decline between 30 and 35 percent compared to the same period compared to 2019, which is a vast improvement compared to all of 2020.

Chart courtesy: JetBlue

Looking ahead, the TrueBlue loyalty program will play a key part towards a return to profitability. Earlier in 2020, the airline issued a RFP for a new co-brand credit card partner. Both current partner Barclays and potential new partner Goldman Sachs have reportedly submitted bids for the business. Once complete, leaders for the airline believe the RFP completion “will help us close the gap in loyalty revenue to our peers over the next few years.”

If the airline needs additional liquidity, JetBlue could draw upon the loyalty program similar to their competition. Instead of drawing an additional $1.8 billion in loans from the CARES Act, leaders believe they could get financing from TrueBlue.

“Our loyalty program remains our most valuable unencumbered asset,” Steve Priest, chief financial officer of JetBlue, said during the investor call as quoted by a Seeking Alpha transcript. “In the event we need additional liquidity, we believe we can act as attractive and competitive financing in various markets.”

JetBlue Report Follows Season of Growth Announcements

Although JetBlue posted another quarter of losses, the New York-based carrier is preparing for growth. In addition to launching their first Airbus A220 flight, the airline will fly their first route across the Canadian Border with new service from the East Coast to Vancouver.

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