JetBlue Airways
investors have long been distracted by the carrier’s now-unlikely merger with
Spirit Airlines.
But the low-cost carrier’s earnings early Tuesday will provide insight into the airline’s future without the Spirit growth opportunity.
The two carriers have appealed a court ruling blocking the deal, but
JetBlue
said Friday that the merger agreement may be terminable this week. Spirit said there is no basis for terminating the merger.
Regardless, the slim chances of a deal—and the creation of the fifth-largest U.S. airline—are fading fast. It goes without saying that any further updates from JetBlue when it reports earnings will be closely watched.
But the results will also be significant in highlighting the job facing new JetBlue CEO Joanna Geraghty when she takes over from Robin Hayes on Thursday.
Low-cost carriers have found the postpandemic world tougher-going than the legacy carriers—
United Airlines Holdings,
Delta Air Lines
and
American Airlines Group
—as cost pressures have hit margins and consumers have typically been happier to spend more on premium travel in recent years. The discount carriers also don’t have much international exposure, which helped the larger carriers last year in particular.
JetBlue does have a growing international presence, but it has still found quarterly profit hard to come by. Analysts are expecting JetBlue to post a fourth-quarter loss per share of 27 cents on revenue of $2.3 billion, according to those surveyed by FactSet.
That would be three quarterly losses out of four in 2023—analysts expect the same this year, and a greater full-year loss per share of 62 cents, compared with an estimated 2023 loss per share of 55 cents.
The stock is largely flat so far in 2024, although it’s taken a turbulent path to get there, and is down more than 30% over the past 12 months.
Investors will be hoping for an upside surprise amid strong holiday travel demand, and potentially a decent start to 2024 if the corporate recovery has continued.
Write to Callum Keown at callum.keown@barrons.com
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