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JetBlue Announces 7.7 Percent Operating Margin for Second Quarter 2006

JetBlue Announces 7.7 Percent Operating Margin for Second Quarter 2006

Old Jul 25, 06, 9:10 am
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Exclamation JetBlue Announces 7.7 Percent Operating Margin for Second Quarter 2006

JetBlue Announces 7.7 Percent Operating Margin for Second Quarter 2006

Low-Fare Airline's Return to Profitability Plan `On Track'
NEW YORK, Jul 25, 2006 (PRIMEZONE via COMTEX News Network) -- 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.

http://investor.jetblue.com/ireye/ir...item_id=885925
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Old Jul 25, 06, 11:40 am
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We're back!!

We recieved an awsome email from our Corporate Communications department that layed out exactly what we have saved and it is pretty impressive!
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Old Jul 25, 06, 1:54 pm
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Arrow JetBlue 2nd-quarter EPS flat; outlook disappoints

NEW YORK, July 25 (Reuters) - Discount airline JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) on Tuesday reported nearly flat earnings per share that beat Wall Street expectations, but a disappointing outlook sent its shares tumbling 5 percent.

The New York-based airline said net profit for the second quarter was $14 million, or 8 cents a share, compared with $13 million, or 8 cents a share, in the same period last year. The figures were well ahead of Wall Street expectations of 4 cents a share, according to Reuters Estimates.


But JetBlue said it only expected to break even for the third quarter and the full year, forecasting pretax profit margins of between a negative 1 and positive 1 percent.

The outlook, which is weaker than earlier comments, indicated the company is still struggling with costs aside from fuel.

"JetBlue's 'core' -- nonfuel -- guidance has been diminished," said J.P. Morgan analyst Jamie Baker in a note. "Fuel cannot be blamed and its valuation continues to stretch well beyond reasonable airline levels."

But Chief Executive David Neeleman said on a conference call that jet fuel prices were solely to blame for the softer guidance and the company's cost-cutting efforts were about 5 percent ahead of schedule.

JetBlue shares were down 61 cents at $11.63 at midday on Nasdaq. The fall erased about half of the gains since last week on the back of bullish expectations leading up to the earnings release. For the year, the stock is down about 20 percent.

After reporting its second consecutive quarterly loss in the first quarter, the 6-year-old airline embarked on a turnaround effort. Neeleman said the company is targeting savings and revenue enhancements of $70 million by the end of the year.

Part of the cost-cutting includes selling five aircraft and deferring delivery of others. Neeleman said two of the planes should be withdrawn from the company's fleet by September and the other three by October. He declined to comment on the proceeds from the sales.

The company is also shifting to shorter-haul flights because of fuel prices. JetBlue said it paid about $2.06 a gallon for jet fuel in the second quarter compared with $1.50 in the same period a year ago.

Its restructuring comes amid signs the airline industry is on the mend after years of losses. Southwest Airlines Inc. (LUV.N: Quote, Profile, Research), American Airlines parent AMR Corp. (AMR.N: Quote, Profile, Research) and United Airlines parent UAL Corp. (UAUA.O: Quote, Profile, Research) have all surprised investors with better-than-expected earnings.

Jet Blue said operating revenue rose 42 percent to $612 million as the company added flights and raised ticket prices at the expense of filling seats. JetBlue's load factor fell 5.5 points to 82.2 percent in the quarter.

Reuters
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Old Jul 25, 06, 2:54 pm
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Investors are sure to notice that ex-fuel CASM (unit costs) increased 9% year over year. That's a big jump in costs; of course, slower growth than originally planned will contribute to a big spike in unit costs, as the fixed costs are now spread over fewer ASMs than originally projected.
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Old Jul 25, 06, 3:00 pm
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tuolumne, you can post all the somewhat negative articles about jetBlue that you want; but what you simply don't understand is that a PROFIT is a PROFIT. It is nothing else. jetBlue was on an amazing streak of 18 consecutive quarters of profitability, while the industry combined lost tens of billions of dollars, and then they took a hit during Q4-05 and Q1-06, due to sky rocketing fuel prices, low airfares due to competition and the introduction of the E190. However, they realized their mistakes and corrected them and built better protection against the industry and economic woes.

jetBlue's Return To Profitability Plan has so far shown great results in its short existance, and things are destined to get better from here!

Remember, jetBlue has the VERY large, loyal customer base...the positive media and political attention...lower costs...CA$H in the bank...and everything else a great company needs to succeed. This, in addtion to reduced costs, improved revenue and new routes which should be lucrative, plus the selling of 5 existing A320s will most likely be a good road to success.

Those who try and skew the numbers against jetBlue are biased and simply wrong. Time will tell, as it is already begining to tell.

Congratulations on your return to profits, jetBlue! It's too bad Wall St. doesn't always see the bigger picture.

jetBlue crewmember....keep up the most amazing work! Your effort has and will continue to pay off. I'm proudly sticking with BLUE when it comes to domestic air travel...along with the countless others!
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Old Jul 25, 06, 3:29 pm
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With the selling off of 5 A320's, will B6 be cutting back service to A320 cities or is it that they just have 5 extras sitting around?
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Old Jul 25, 06, 3:31 pm
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Originally Posted by Seat13c
With the selling off of 5 A320's, will B6 be cutting back service to A320 cities or is it that they just have 5 extras sitting around?
Neither. AFAIK, B6 will sell those A320s as new ones arrive - the torrid expansion pace will be slowed, but no need to cut flights. New ones will continue to arrive, albeit at a slower pace than originally planned.
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Old Jul 25, 06, 8:07 pm
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Originally Posted by Seat13c
With the selling off of 5 A320's, will B6 be cutting back service to A320 cities or is it that they just have 5 extras sitting around?
From the call today they said the planes would exit the fleet once the busy season was over ... 2 in September and 3 in October. My guess is the planes would have been shifted elsewhere once the summer demand died down (fewer transcons, lower frequencies elsewhere, etc).

On a semi-related note ... There was a post floating around on A.net a little bit ago about B6 leasing (not selling) 5 planes to a German airline ... I was hoping they might delve into that on the call today but all the mentioned was the sale of the 5 planes ... but they did mention launching a "charter" division on the call ... maybe thats where the leasing would come from? *shrug*

Here is the article I mentioned: http://www.bloomberg.com/apps/news?p...&refer=germany

Originally Posted by bloomberg
Blue Wings hasn't chosen the engines for the planes. The carrier also plans to lease five A320s from JetBlue Airways in the U.S. to help it expand until the A320 deliveries start in 2009.
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Old Jul 25, 06, 10:13 pm
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We'ce known the Charter division was coming quite some time ago. It was something that we never really looked at when we where smaller because our aircraft where flying so much. Now that we've grown and have more aircraft we don't know what to do with them when the peak travel season trails off. Now we are going to start chartering out our aircraft during the down time to make some extra revenue instead of the aircraft just sitting idle or being placed on routes that don't need the extra capacity.
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Old Jul 26, 06, 3:36 pm
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So what does S&P do to reward Neeleman for the outstanding turnaround?

That's right - downgrade the debt ratings:

S&P downgrades ratings on JetBlue; outlook 'stable'

By Katherine Hunt
Last Update: 12:20 PM ET Jul 26, 2006

SAN FRANCISCO (MarketWatch) -- Standard & Poor's Ratings Services on Wednesday lowered its ratings on JetBlue Airways Corp., including taking the long-term corporate credit rating to B from B+ and the unsecured debt rating to CCC+ from B-, citing the carrier's weakened financial profile. All ratings were removed from creditwatch, where they were placed with negative implications on April 25. The outlook on the Forest Hills, N.Y.-based airline is stable. "Although JetBlue reported a $14 million profit in the second quarter of 2006, after two successive quarters of losses, the company is expected to continue to experience pressure on earnings due to continued high fuel prices," said S&P credit analyst Betsy Snyder in a statement. "As a result, its financial profile, which has weakened significantly from historically strong levels, is expected to recover only modestly over the near to intermediate term."
http://www.marketwatch.com/News/Stor...yhoo&dist=yhoo
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Old Jul 26, 06, 5:05 pm
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Originally Posted by jetBlueNYFL
tuolumne, you can post all the somewhat negative articles about jetBlue that you want; but what you simply don't understand is that a PROFIT is a PROFIT. It is nothing else. jetBlue was on an amazing streak of 18 consecutive quarters of profitability, while the industry combined lost tens of billions of dollars, and then they took a hit during Q4-05 and Q1-06, due to sky rocketing fuel prices, low airfares due to competition and the introduction of the E190. However, they realized their mistakes and corrected them and built better protection against the industry and economic woes.!
Yeah, right. Please read what I posted, I did, in no way, dispute the claim that Jet Blue made a profit. I simply posted an article that was taking into account JetBlue's remaining performance for the rest of the year.

Originally Posted by jetBlueNYFL
jetBlue's Return To Profitability Plan has so far shown great results in its short existance, and things are destined to get better from here!
And you know this how? You have a "good feeling" in your heart about it all?

I'm sorry, but that is hardly enough to be making such factual claims.

Originally Posted by jetBlueNYFL
Remember, jetBlue has the VERY large, loyal customer base...the positive media and political attention...lower costs...CA$H in the bank...and everything else a great company needs to succeed. This, in addtion to reduced costs, improved revenue and new routes which should be lucrative, plus the selling of 5 existing A320s will most likely be a good road to success.!
And Northwest, American, Delta, United, Southwest, Continental and US Airways don't have very large and loyal customer bases? Since when does that equate to uniqueness or give B6 an upper hand? Positive media attention? That has no impact on thier profitability. Lower costs? Last time I checked, the costs are as low as they are going to go. Cash in the bank? What airline doesn't have cash in the bank? Again, what? You can sit there and spin all you want; Everything you just listed is not unique to B6 and is occuring in the entire industry.



Originally Posted by jetBlueNYFL
Those who try and skew the numbers against jetBlue are biased and simply wrong. Time will tell, as it is already begining to tell.
This is the biggest load of BS I've read in a long time.

Originally Posted by jetBlueNYFL
Congratulations on your return to profits, jetBlue! It's too bad Wall St. doesn't always see the bigger picture.
The bigger picture? Last time I checked, WallStreet is already looking into Q3 and Q4 while you are sitting here getting all hot and heavy over their Q2 profit. Who's the real one not looking at the bigger picture?
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