JetBlue warns of ‘deteriorating’ consumer confidence

JetBlue has warned that consumer confidence is deteriorating despite reducing first quarter losses.

The US low cost carrier cut capacity by more than 4% in the first three months of the year.

The airline posted a quarterly loss of $208 million compared with a loss of $716 million in the equivalent period last year. Operating revenue fell by 3.1% to $2.1 billion.

The New York-based airline’s president Marty St George said: "In the first quarter we saw booking strength from January deteriorate into February and worsen into March.

"We expect softened demand for off-peak travel to continue into the second quarter, where the booking curve is more exposed to macro uncertainty and deteriorating consumer confidence.” 

He insisted that the airline was committed to its ‘JetForward’ efficiency plan, unveiled last September, and was “encouraged by the resiliency of premium, international, and loyalty revenues - core components of our long-term strategy”.

The carrier, which runs a number of transatlantic routes to the UK, was focused on “successfully managing what we can control," according to chief executive Joanna Geraghty. 

"We also acted urgently to manage near-term revenue uncertainty,” she said while detailing first quarter results. 

“We were the first carrier to make meaningful capacity adjustments, swiftly moving to better match supply with demand. 

“As we continue to monitor the evolving macro backdrop, we are evaluating all levers available to us to boost profitability and preserve cash, including additional capacity reductions, targeted cost savings, and further evaluation of our fleet retirement schedule. 

“Given the macroeconomic uncertainty, we are not re-affirming our prior full-year guidance.”

She pointed to an improvement in on-time performance over the last three quarters, resulting in “significant increases in customer satisfaction and cost savings”. 

JetBlue took “prudent decisions” to raise $3.2 billion in capital  and manage upcoming capital expenditures such as a $3 billion aircraft deferral in the past 16 months and remains “well positioned to manage through a range of economic outcomes”. 

In addition to current liquidity levels, the company has more than $5 billion in unencumbered assets, consisting primarily of aircraft, engines, airport slots, gates and routes.

Chief financial officer Ursula Hurley said: ”We’ve already taken a number of steps to build a more resilient financial foundation, and we continue to evaluate all avenues to improve our financial results. 

"We remain confident JetForward will drive enduring structural changes on our path to sustained profitability, and we saw encouraging progress in the first quarter."