JetBlue Airways investors have been heavily focused on the carrier’s failed merger with Spirit Airlines. However, the upcoming earnings report from JetBlue will shed light on the airline’s future without this growth opportunity.
Both JetBlue and Spirit have appealed a court ruling blocking the merger, but JetBlue hinted that the merger agreement may be terminated soon. On the other hand, Spirit argued against the termination, claiming it has no basis.
While the chances of a deal and the creation of the fifth-largest U.S. airline are rapidly diminishing, the market eagerly awaits any updates from JetBlue. The company’s earnings report will not only provide insights but also showcase the challenges that new CEO Joanna Geraghty will face after taking over from Robin Hayes.
In the post-pandemic world, low-cost carriers like JetBlue have encountered greater difficulties compared to legacy carriers such as United Airlines Holdings, Delta Air Lines, and American Airlines Group. Rising costs have put pressure on profit margins, and consumers have shown a preference for premium travel in recent years. Furthermore, lack of significant international exposure has been a disadvantage for discount carriers, unlike larger airlines who benefited from their global presence.
While JetBlue does have a growing international presence, it has struggled to generate quarterly profits. Analysts predict a fourth-quarter loss per share of 27 cents on revenue of $2.3 billion for JetBlue. This would mark the third quarterly loss out of four in 2023, with expectations for losses to continue this year. The estimated full-year loss per share for 2023 is 62 cents, compared to an estimated loss per share of 55 cents for 2024.
Although JetBlue’s stock has remained relatively unchanged in 2024, it has experienced significant volatility and has dropped over 30% in the past year.
Investors are hopeful for positive surprises amidst strong demand for holiday travel and a potential rebound in 2024 if corporate recovery persists.