NEW YORK — NEW YORK (AP) — JetBlue Airways reported a $25 million profit for the second quarter, and executives on Tuesday described a strategy of cutting costs to rebuild the business, sending the company’s shares sharply higher.
The small profit was down 82% from a year ago, but it was a surprise to analysts who expected the New York-based airline to post a loss for the April-through-June quarter, which includes a big chunk of the peak summer travel season.
JetBlue announced that it would delay plans to buy about $3 billion worth of Airbus jetliners through 2029 as it cuts costs and hopes to generate gross profit of between $800 million and $900 million by 2027.
The shares rose 18% in late-morning trading, although they remain down two-thirds from their peak in 2021.
JetBlue has struggled as many of its planes have been grounded by the removal and inspection of Pratt & Whitney engines.
“We are working with Pratt on reaching a settlement that we believe reflects the extent of the impact to JetBlue, but it is definitely a frustrating situation,” CEO Joanna Geraghty said on a call with analysts.
Even with the money-making second quarter, JetBlue has lost $3 billion and not posted a full-year profit since the start of 2020. Courts struck down a partnership with American Airlines in the Northeast and a bid by the previous CEO to buy Spirit Airlines.
JetBlue is under new leadership, with Geraghty, who took over as CEO in February, and two new board members who were appointed after financier Carl Icahn took a large stake in the company.
The airline is starting to cut money-losing routes, including leaving several cities, while increasing its focus on leisure travelers in the Northeast, Florida and Puerto Rico. Executives said other changes were coming.
JetBlue said its profit, excluding one-time items, worked out to 8 cents per share. Analysts expected an adjusted loss of 10 cents per share, according to a FactSet survey.
Sales fell 7% to $2.43 billion, beating analysts’ forecast of $2.40 billion.
JetBlue forecast a continued decline in revenue and passenger-carrying capacity while costs other than fuel keep rising in the July-through-September quarter, compared with a year ago.
JetBlue Airways Corp. surprised investors and analysts on Tuesday by reporting an unexpected profit for the second quarter of 2021. The airline, like many others in the industry, has been hit hard by the COVID-19 pandemic, but managed to turn a profit thanks to cost-cutting measures and increased demand for air travel.
In a statement released alongside its earnings report, JetBlue announced that it would be delaying the delivery of 13 new Airbus A220-300 aircraft in an effort to further reduce costs and aid in its recovery from the pandemic. The airline had previously planned to take delivery of these new planes in 2022 and 2023, but will now push back the deliveries to 2025 and 2026.
The decision to delay new plane deliveries comes as JetBlue continues to navigate the challenges posed by the ongoing pandemic. The airline has been forced to cut capacity and reduce its workforce in order to stay afloat, but these efforts have begun to pay off as demand for air travel slowly returns.
JetBlue’s unexpected profit in the second quarter is a positive sign for the airline and the industry as a whole. The company reported a net income of $64 million, or $0.40 per share, compared to a loss of $320 million, or $1.18 per share, in the same period last year. Revenue also increased by 79% year-over-year to $1.49 billion.
In addition to delaying new plane deliveries, JetBlue has also been focused on expanding its route network and improving its customer experience. The airline recently announced plans to launch new routes to London from both New York and Boston, marking its first foray into transatlantic travel.
Overall, JetBlue’s unexpected profit and cost-cutting efforts are a positive sign for the airline’s recovery from the pandemic. By delaying new plane deliveries and focusing on reducing costs, JetBlue is positioning itself for long-term success in a post-pandemic world.
