JetBlue Faces Problem With Rising Costs: How the Spirit Merger Won’t Help
JetBlue Airways posted blockbuster revenues second quarter. Total revenue, as well as unit revenue, rose to historic levels amid strong travel demand across its network.
"I'm pleased to see record demand to travel with JetBlue and the solid underlying momentum in our recovery," JetBlue CEO Robin Hayes said Tuesday during the airline's second-quarter results call. That strength has continued into the third quarter, and is expected to keep the pace this fall as well, he added.
But the New York-based carrier still lost $151 million during a quarter when many — though not all — of its competitors made money. And it had the second worst operating margin of U.S. airlines that have reported results at negative 2.8 percent. Why? Costs.
Expenses jumped nearly 38 percent compared to 2019 to $2.56 billion, on a revenue increase of 16 percent to $2.45 billion in the second quarter. While fuel was the single largest contributor — up 88 percent to $910 million — JetBlue saw labor, airport, and other expenses also rise more than 20 percent. Unit costs excluding fuel rose 14.5 percent on a 13.5 percent increase in unit revenues.
Yes, these increases came amid a historic run up in oil prices following Russia's invasion of Ukraine in February. All airlines, except thos