DALLAS – JetBlue Airways said Tuesday that it lost $255 million in the first quarter, and widespread flight cancellations in April plus the need to hire and train more pilots will delay the company's return to profitability.
New York-based JetBlue said it would further reduce its schedule this summer to limit delays and cancellations.
The company's shares fell 11.4% to close at $11.57, barely above their 12-month low.
Like other airlines that have reported financial results this month, JetBlue said demand for tickets is strong and fares are rising — the average first-quarter fare was 31% higher than a year ago — as consumers continued to return to travel after two years of pandemic.
But JetBlue struggled in April, canceling 10% of its flights. The company blamed its problems on an increase in pilots leaving, bad weather in Florida and New York, air-traffic control delays and other factors.
The pilots' union has heaped some of the blame on the airline's chief of systems operations. A union official said the airline's reputation has suffered as customers endure canceled flights and the airline mishandles pilot scheduling.
CEO Robin Hayes said JetBlue is a victim of a pilot shortage affecting the entire industry.
“We continue to experience elevated levels of pilot attrition and training pressure,” he told analysts.
Hayes said JetBlue will further trim planned growth in its summer schedule “to get the operation back on track,” and that will delay JetBlue’s return to profitability until the second half of this year. JetBlue previously said it would cut its May schedule by up to 10%.
On the call with management, analysts peppered JetBlue executives about the operational problems and rising costs.
“While we’ve been willing to look through a quarter or two of operational strain in the past, our confidence in management’s ability to wrestle (non-fuel costs) back under control is low,” JPMorgan analyst Jamie Baker said in a note to clients. He lowered his rating on JetBlue's stock from “overweight,” or buy, to “underweight.”
The airline said its adjusted loss was 80 cents per share, slightly better than the loss of 85 cents per share forecast by analysts in a FactSet survey. Revenue more than doubled from a year earlier, to $1.74 billion.
However, fuel spending nearly tripled, and labor costs rose by one-third from the same quarter last year.
JetBlue offered this month to buy Spirit Airlines for $3.6 billion to gain more heft, which it said it needed to better compete with American, Delta, United and Southwest. Hayes declined to answer questions Tuesday about the bid, which seeks to top an earlier offer by Frontier Airlines.