JetBlue’s Q2’16 Earnings Preview: Capacity Expansion And Mint Services To Drive Results
Key Trends:
- JetBlue revised its capacity guidance for the full year from 8.5% – 10.5% to 8.0% – 9.5% to manage its declining unit revenues and increasing fuel cost. Yet, its capacity growth still remains fairly high as compared to the peers. However, the growth in revenues due to capacity expansion is expected to be offset by the impact of its declining PRASM.
- The airline is expanding its premium seat offering, “Mint,” domestically in Fort Lauderdale, Los Angeles, San Diego, and internationally in Aruba, Barbados, and St. Maarten. Since the premium Mint service yields higher margins compared to its regular seats, this expansion is likely to boost the airline’s revenues and margins over the next few quarters.
- Crude oil prices have improved more than 35% in the last three months due to production cuts in the U.S., geopolitical disturbances in Venezuala and Nigeria, and a wild-fire in Alberta, Canada. This is expected to cause the airline’s fuel price to exceed its guidance for the quarter, in turn pulling down the carrier’s operating margins.
- The company is concentrating on cutting its non-fuel expenditure by promoting operational expertise, to offset higher fuel costs.
See Our Complete Analysis For JetBlue here
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Have more questions about JetBlue Corporation (NYSE:JBLU)? See the links below:
- What Impact Will Crude Oil Prices Have On JetBlue’s Enterprise Value?
- How Are US Air Fares Correlated To Crude Oil Prices?
- Rapid Capacity Growth And Lower Fuel Costs Drive JetBlue’s 1Q’16 Results
- How Has JetBlue Utilized Its Cash Flows Over The Last Three Years?
- How Has JetBlue’s Revenue And EBITDA Grown Over The Last Five Years?
- What Will Drive JetBlue’s Revenue And EBITDA In The Next Five Years?
- How Would JetBlue’s Equity Value Be Impacted If Crude Oil Prices Reach $100 Per Barrel By 2018?
- How Much Value Will JetBlue’s International Operations Contribute To Its Revenue By 2020?
- How Will JetBlue’s Equity Value Be Impacted If Crude Oil Prices Average At $50 Per Barrel In 2018?
- Capacity Expansions And Fuel Cost Savings Drive JetBlue’s Earnings in 2015
- How Did The Oil Slump Impact JetBlue’s Operating Margins In 2015?
- What Is JetBlue’s Fundamental Value Based On 2016 Expected Numbers?
- How Has JetBlue’s Revenue And EBITDA Composition Changed Over The Last Five Years?
- What Is JetBlue’s Revenue And EBITDA Breakdown?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for JetBlue Corporation
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