JetBlue increases 3rd quarter net income

JetBlue Airways has reported its results for the third quarter 2014 (3Q14), featuring a net income of $79 million, which is 11.3% up on the airline’s third quarter 2013 net income (3Q13) of $71 million.

The 3Q14 operating income was $164 million, compared with $152 million in 3Q13. Pre-tax income was $132 million in 3Q14, up from $119 million in 3Q13.

"We are pleased to report record third quarter earnings," declared Dave Barger, JetBlue's chief executive officer. "We saw improved profitability across our network, reflecting the success of our efforts to differentiate our product and culture and maintain competitive costs. I would like to thank our 15,500 crewmembers for their dedication to running a safe airline and delivering outstanding service to our customers."

JetBlue reported record third quarter operating revenues of $1.5 billion. Yield per passenger mile in the 3Q14 was 13.96 cents, up 0.9% compared with 3Q13. Passenger revenue per available seat mile (PRASM) for 3Q14 increased 2.4% year over year to 12.03 cents and operating revenue per available seat mile (RASM) increased 1.4% year over year to 13.00 cents.

Operating expenses for the quarter increased 5.7%, or $75 million, over the prior year period. Interest expense for 3Q14 declined 7.8%, or $3 million, due to JetBlue's focus on debt reduction. JetBlue's operating expense per available seat mile (CASM) for 3Q14 increased 1.2% year over year to 11.61 cents. Excluding fuel and profit sharing, CASM increased 2.6% to 7.13 cents.

"Our record results reflect the strength of our underlying business as we continued to drive margin improvement across our network," noted Robin Hayes, JetBlue's president. "Our focus remains on improving results through ancillary revenue initiatives, cost control and profitable growth. We believe these efforts will drive improved returns for our shareholders."

JetBlue continued to hedge fuel to manage price volatility. In 3Q14 JetBlue had in place hedges for approximately 23% of its fuel consumption and managed approximately 7% of its fuel consumption using fixed forward price agreements (FFPs). This resulted in a realised fuel price of $3.05 per gallon, a 2.7% decrease over the 3Q13 realised fuel price of $3.14. JetBlue recorded $1 million in losses on fuel hedges that settled during the third quarter.

JetBlue has managed approximately 34% of its fourth quarter projected fuel requirements using a combination of FFPs, jet fuel swaps and caps. Based on the fuel curve as of 16 October, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $2.80 in 4Q14.

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