Major U.S. airlines said revenues were still improving, but discount carrier JetBlue Airways pointed to weaker-than-expected holiday revenue, sending its shares down more than 6 percent Wednesday.
JetBlue cut its fourth-quarter revenue outlook, saying higher yields had not materialized as it had planned.
"We had planned on the peaks being slightly stronger than maybe what the peaks are turning out to be," JetBlue Chief Financial Officer Ed Barnes said during a presentation at the Hudson Securities airline conference.
Other airlines said they were not seeing the revenue picture JetBlue outlined. Analysts said the JetBlue issue was company-specific and not suggestive of a wider industry problem.
JetBlue "added too much capacity and tried to raise prices in an environment where their customer is the leisure customer and pushed back," said Helane Becker, an analyst with Dahlman Rose & Co.
Avondale Partners analyst Bob McAdoo said JetBlue gave revenue forecasts that were not very good and had to correct them.
"I'm not sure that there's anything going wrong," McAdoo said. JetBlue was "just too optimistic."
JetBlue cut its fourth-quarter forecasts for two performance measures: passenger revenue per available seat mile and revenue per available seat mile.
The carrier forecast a rise of 10 to 12 percent in passenger revenue per available seat mile, compared with a prior view of 12 to 15 percent. It said revenue per available seat mile would probably rise 8 to 10 percent, down from the previous view of 10 to 13 percent.
JETBLUE VIEW NOT SHARED
U.S. airlines have posted improved financial results this year after travel demand diminished in the economic downturn.
Delta Air Lines Inc, the second-biggest airline behind United Continental Holdings, said Wednesday it expected a profit in the fourth quarter.
"Our load factors (percentage of seats filled) are holding up," Delta Chief Financial Officer Hank Halter told the Hudson Securities conference. "Our demand for Thanksgiving holiday was strong and it was up year over year, and we're expecting similar going forward."
Bella Goren, chief financial officer of American parent AMR Corp, said advance bookings through the remainder of the year looked strong. Southwest Airlines Co noted strong bookings for December and added it expected "another solid revenue improvement" in the fourth quarter.
The airlines also said they were keeping an eye on fuel prices as U.S. crude reached a 26-month high earlier this week.
Delta said it would continue to retire less fuel-efficient planes from its fleet next year, and Southwest said it was adjusting its fuel-hedge program to provide protection in 2011 and beyond. AMR cited its plans to add newer aircraft with better fuel savings.
"While serious, the specter of higher fuel costs is not the threat it was a couple of years ago," AMR's Goren said.
JetBlue shares were down 6.2 percent at $6.53 in afternoon trading, while Delta fell 1.1 percent to $12.97 and AMR declined 4 percent to $7.65. United Continental Holdings was off 2.2 percent at $25.20, and Southwest shed 1.8 percent to $12.72. The Arca Airline index was off 1.5 percent.
© 2023 Thomson/Reuters. All rights reserved.