JetBlue Announces Fourth Quarter 2021 Results

·14 min read

NEW YORK, January 27, 2022--(BUSINESS WIRE)--JetBlue Airways Corporation (NASDAQ: JBLU) today reported its results for the fourth quarter of 2021:

  • Reported GAAP loss per share of ($0.40) in the fourth quarter of 2021 compared to diluted earnings per share of $0.56 in the fourth quarter of 2019. Adjusted loss per share was ($0.36)(1) in the fourth quarter of 2021 versus adjusted diluted earnings per share of $0.56(1) in the fourth quarter of 2019.

  • GAAP pre-tax loss of ($163) million in the fourth quarter of 2021, compared to a pre-tax income of $220 million in the fourth quarter of 2019. Excluding one-time items, adjusted pre-tax loss of ($145) million(1) in the fourth quarter of 2021 versus adjusted pre-tax income of $221 million(1) in the fourth quarter of 2019.

Operational and Financial Highlights from the Fourth Quarter

  • Capacity declined by 5.4% year over two, in-line with our planning assumption of a 4% to 7% decline, year over two.

  • Revenue declined 9.7% year over two, compared to our planning assumption of an 8% to 13% decline year over two. This was within the range of our initial assumptions despite a late quarter impact from the Omicron wave, driven by strong holiday peaks.

  • Operating expenses per available seat mile increased 14.4% year over two. Operating expenses per available seat mile, excluding fuel and special items (CASM ex-fuel) (1) increased 16.3%(1) year over two. Consistent with the industry, our cost performance was impacted by incremental incentives and premium pay tied to the Omicron surge in case counts and the resulting operational impact, worth approximately two points of CASM ex-fuel in the quarter.

  • Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Special Items (Adjusted EBITDA) in the fourth quarter of 2021 was $31 million(1), towards the better end of our planning assumption range of ($50) to $50 million.

Balance Sheet and Liquidity

  • As of December 31, 2021, JetBlue’s adjusted debt to capital ratio was 53%(1).

  • JetBlue ended the fourth quarter of 2021 with approximately $2.8 billion in unrestricted cash, cash equivalents, and short-term investments, or 35% of 2019 revenue. This excludes our $550 million undrawn revolving credit facility.

  • JetBlue paid down approximately $100 million in regularly scheduled debt and finance lease obligations, and prepaid approximately $20 million in bank loans.

Fuel Expense and Hedging

  • The realized fuel price in the fourth quarter 2021 was $2.37 per gallon, a 14.2% increase versus fourth quarter 2019 realized fuel price of $2.07.

  • As of January 27, 2022, JetBlue has not entered into forward fuel derivative contracts to hedge its fuel consumption for the first quarter of 2022. Based on the forward curve as of January 14, 2022, JetBlue expects an average all-in price per gallon of fuel of $2.59 in the first quarter of 2022.

Northeast Alliance Expected to Deliver Competition and Customer Choice

  • Since the Northeast Alliance with American (NEA) was implemented in February 2021, JetBlue and American have collectively grown more quickly than the two largest competitors across New York and Boston. The airlines have launched the first phase of reciprocal loyalty benefits, are investing in a seamless travel experience and are now codesharing on 185 routes. Additionally, JetBlue will be fully operating out of LaGuardia’s (LGA) Terminal B when completed in summer 2022, providing easy connections for customers traveling on the Northeast Alliance.

  • JetBlue plans to launch two new BlueCities this summer – Asheville (AVL) and Vancouver (YVR). As part of our 2022 growth plans, JetBlue and American plan to offer up to 300 daily departures at JFK Airport, 195 of those operated by JetBlue – more flights than ever before. At LGA, JetBlue plans to operate approximately 50 of nearly 200 daily departures with American, more than tripling our 2019 flight count.

Paving a Path Towards Value Creation

"While Omicron has temporarily weighed on demand in the very near-term, we expect sequential month-on-month improvement through the quarter, ultimately returning to sustained profitability in the spring and beyond. Furthermore, were it not for Omicron, we believe we would have generated higher revenue this quarter than in the first quarter of 2019," said Robin Hayes, JetBlue’s Chief Executive Officer.

"I firmly believe that 2022 will prove to be a transformational year for JetBlue's structural profitability, as we look to restore our earnings power and create value for our stakeholders. And we plan to achieve this by pulling meaningful commercial levers, keeping our relentless focus on costs, and maintaining our measured approach to capital allocation."

Revenue and Capacity

"The surge in case counts disproportionately impacted the Northeast, hitting New York particularly hard, driving increased Customer cancellations and bookings softness during the most significant revenue weeks of the quarter, and also led to some Crew-related cancellations. Despite all of these challenges, our underlying revenue performance was very strong, which keeps us optimistic about the future as we continue to ramp up hiring efforts towards a fully staffed operation," said Joanna Geraghty, JetBlue’s President and Chief Operating Officer.

"For the first quarter of 2022, we expect revenue to decrease between 11% and 16% year over three. This sequential slowdown reflects the large negative impact from Omicron on Q1 demand. However, trends have largely stabilized and are improving across all geographies. As quickly as the Omicron variant swept through the Northeast, we are seeing cases rapidly decline and we expect sequential month-on-month improvement leading to a profitable Q2 and a very strong summer peak.

For the first quarter of 2022, we expect capacity to range between (1%) and 2% year over three. For the full-year 2022, we are planning to grow capacity between 11% and 15% versus 2019 as we bring aircraft utilization back towards pre-pandemic levels, while retaining flexibility. We expect the demand recovery to regain steam following the temporary setback tied to the Omicron variant. We’ll continue to be nimble and react to the environment."

Financial Performance and Outlook

"We’re confident that we’re on a path to sequential pre-tax margin improvement with sustained profitability in the spring and beyond. We expect to achieve greater operating leverage as we grow revenue while continuing to improve our unit cost performance," said Ursula Hurley, JetBlue’s Chief Financial Officer.

"For the first quarter of 2022, we estimate CASM ex-fuel(2) will increase between 13% to 15% year over three. For the full-year 2022, we expect CASM ex-fuel(2) to increase in the range of 1% to 5% versus 2019. We expect elevated unit costs in the first half, followed by a meaningful improvement in the second half of the year as we plan for our network, operation, and aircraft utilization to settle into a ‘new normal’ with optimal staffing levels, along with the ramp of our planned cost initiatives.

For the full-year, we have repaid a total of approximately $1.9 billion of debt. Our balance sheet continues to be among the strongest in the industry, and we’ll continue our balanced approach to capital allocation to drive shareholder value."

Earnings Call Details

JetBlue will conduct a conference call to discuss its quarterly earnings today, January 27, 2022 at 10:00 a.m. Eastern Time. A live broadcast of the conference call will also be available via the internet at http://investor.jetblue.com. The webcast replay and presentation materials will be archived on the company’s website.

For further details see the Fourth Quarter 2021 Earnings Presentation available via the internet at http://investor.jetblue.com.

About JetBlue

JetBlue is New York's Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando and San Juan. JetBlue carries customers across the U.S., Caribbean and Latin America, and between New York and London. For more information, visit jetblue.com.

Notes

(1)

Non-GAAP financial measure; Note A provides a reconciliation of non-GAAP financial measures used in this release and explains the reasons management believes that presentation of these non-GAAP financial measure provides useful information to investors regarding JetBlue's financial condition and results of operations.

(2)

With respect to JetBlue’s CASM ex-fuel guidance, JetBlue is unable to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors. Accordingly, a reconciliation to CASM is not available without unreasonable effort.

Forward-Looking Statements

This Earnings Release (or otherwise made by JetBlue or on JetBlue’s behalf) contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. When used in this document and in documents incorporated herein by reference, the words "expects," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook," "may," "will," "should," "seeks," "targets" and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the coronavirus ("COVID-19") pandemic, and the outbreak of any other disease or similar public health threat that affects travel demand or behavior; restrictions on our business related to the financing we accepted under various federal government support programs such as the Coronavirus Aid, Relief, and Economic Security Act, the Consolidated Appropriations Act, and the American Rescue Plan Act; our significant fixed obligations and substantial indebtedness; risk associated with execution of our strategic operating plans in the near-term and long-term; the recording of a material impairment loss of tangible or intangible assets; our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our reliance on high daily aircraft utilization; our ability to implement our growth strategy; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on a limited number of suppliers, including for aircraft, aircraft engines and parts and vulnerability to delays by those suppliers; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; the outcome of the lawsuit filed by the Department of Justice and certain state Attorneys General against us related to our Northeast Alliance entered into with American Airlines, our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional domestic or foreign government regulation, including new or increased tariffs; changes in our industry due to other airlines' financial condition; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; adverse weather conditions or natural disasters; and external geopolitical events and conditions. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base our expectations may change prior to the end of each quarter or year.

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this Earnings Release, could cause our results to differ materially from those expressed in the forward-looking statements. In light of these risks and uncertainties, the forward-looking events discussed in this Earnings Release might not occur. Our forward-looking statements speak only as of the date of this Earnings Release. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

This Earnings Release also includes certain "non-GAAP financial measures" as defined under the Exchange Act and in accordance with Regulation G. We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP within this Earnings Release.

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)

Three Months Ended

Twelve Months Ended

December 31,

Percent

December 31,

Percent

2021

2020

Change

2021

2020

Change

OPERATING REVENUES

Passenger

$

1,695

$

606

179.6

$

5,609

$

2,733

105.3

Other

139

55

152.3

428

224

91.4

Total operating revenues

1,834

661

177.3

6,037

2,957

104.2

OPERATING EXPENSES

Aircraft fuel and related taxes

463

134

244.7

1,436

631

127.7

Salaries, wages and benefits

640

472

35.8

2,358

2,032

16.1

Landing fees and other rents

157

100

56.4

628

358

75.2

Depreciation and amortization

142

128

10.7

540

535

0.9

Aircraft rent

24

25

(3.5

)

99

85

17.2

Sales and marketing

54

26

102.0

183

110

66.0

Maintenance, materials and repairs

153

97

58.0

626

441

42.0

Other operating expenses

312

202

54.7

1,080

762

41.8

Special items

8

(69

)

NM

(833

)

(283

)

194.8

Total operating expenses

1,953

1,115

75.1

6,117

4,671

31.0

OPERATING (LOSS)

(119

)

(454

)

(73.8

)

(80

)

(1,714

)

(95.3

)

Operating margin

-6.5

%

-68.7

%

62.2

pts.

-1.3

%

-58.0

%

56.7

pts.

OTHER INCOME (EXPENSE)

Interest expense

(39

)

(59

)

(33.8

)

(192

)

(179

)

7.2

Capitalized interest

3

3

(0.7

)

12

13

(6.8

)

Gain (Loss) on equity investments

(10

)

-

NM

44

-

NM

Interest income and other

2

(2

)

NM

(47

)

(13

)

267.5

Total other income (expense)

(44

)

(58

)

(24.9

)

(183

)

(179

)

2.0

(LOSS) BEFORE INCOME TAXES

(163

)

(512

)

(68.2

)

(263

)

(1,893

)

(86.1

)

Pre-tax margin

-8.9

%

-77.5

%

68.6

pts

-4.4

%

-64.0

%

59.6

pts

Income tax (benefit)

(34

)

(139

)

(75.6

)

(81

)

(539

)

(85.1

)

NET (LOSS)

$

(129

)

$

(373

)

(65.4

)

$

(182

)

$

(1,354

)

(86.5

)

(LOSS) PER COMMON SHARE:

Basic

$

(0.40

)

$

(1.31

)

$

(0.57

)

$

(4.88

)

Diluted

$

(0.40

)

$

(1.31

)

$

(0.57

)

$

(4.88

)

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic

319.6

284.1

318.0

277.5

Diluted

319.6

284.1

318.0

277.5

JETBLUE AIRWAYS CORPORATION

COMPARATIVE OPERATING STATISTICS

(unaudited)

Three Months Ended

Twelve Months Ended

December 31,

Percent

December 31,

Percent

2021

2020

Change

2021

2020

Change

Revenue passengers (thousands)

8,617

3,356

156.7

30,094

14,274

110.8

Revenue passenger miles (millions)

11,628

4,446

161.6

41,152

18,598

121.3

Available seat miles (ASMs) (millions)

15,211

8,480

79.4

54,113

32,689

65.5

Load factor

76.4

%

52.4

%

24.0

pts.

76.0

%

56.9

%

19.1

pts.

Aircraft utilization (hours per day)

9.5

5.3

77.3

8.5

5.4

57.4

Average fare

$

196.76

$

180.54

9.0

$

186.39

$

191.42

(2.6

)

Yield per passenger mile (cents)

14.58

13.63

7.0

13.63

14.69

(7.2

)

Passenger revenue per ASM (cents)

11.15

7.15

55.9

10.37

8.36

24.0

Revenue per ASM (cents)

12.06

7.80

54.6

11.16

9.04

23.4

Operating expense per ASM (cents)

12.84

13.16

(2.4

)

11.30

14.29

(20.9

)

Operating expense per ASM, excluding fuel (cents)(1)

9.66

12.31

(21.5

)

10.11

13.12

(22.9

)

...

Departures

76,165

40,321

88.9

264,385