JetBlue pares third-quarter capacity forecast as disruptions mount

JetBlue Airways has lowered its third-quarter capacity growth forecast after severe weather and air traffic control disruptions hit operations across the northeastern United States, adding cost pressure as the carrier pursues its profitability turnaround.

The New York-based airline now expects available seat miles, a standard measure of capacity, to rise 1.5% to 3.5% from a year earlier in the quarter ending September 30. Its previous forecast, issued in late July, called for growth of 3% to 6%.

JetBlue also raised its estimate for non-fuel unit costs, forecasting cost per available seat mile excluding fuel to increase 6% to 8% year on year. That compares with its earlier projection of 2.5% to 4.5%, reflecting the financial impact of operational disruption and lower-than-planned flying.

Weather conditions were a major factor. JetBlue said the number of severe-weather days affecting its airports was more than 40% above the average of the previous three summers. Air traffic control-related cancellation rates also nearly doubled, with the airline particularly exposed because of its concentration in New York and other northeastern markets.

Higher fuel costs are adding another burden. JetBlue now expects its average fuel price for the third quarter to be about $3.96 a gallon, compared with the $3.49 forecast it gave in July. Elevated energy prices have complicated efforts by US airlines to protect margins during a period of strong passenger demand.

The revised cost and capacity outlook contrasted with a stronger revenue forecast. JetBlue lifted its projection for revenue per available seat mile to growth of 17% to 20% from a year earlier, up from the previous range of 12.5% to 16.5%. The airline cited sustained demand, improved pricing and progress in commercial initiatives.

The combination indicates that JetBlue is generating more revenue from each unit of capacity while facing heavier expenses to operate its network. That balance is important to management’s JetForward programme, which is designed to restore sustained profitability through network changes, cost controls and higher-value products.

JetBlue shares came under pressure following the update, with investors weighing the improved revenue outlook against weaker capacity growth and higher operating costs. The stock had already closed at $4.38 on Wednesday, down 3.1% for the session and well below its 52-week high of $6.62 reached in August.

The airline entered the quarter expecting operating momentum to improve after reporting second-quarter revenue of about $2.7 billion, up 14.5% year on year. Revenue per available seat mile increased 10.9% during that period, while system capacity rose 3.2%.

Second-quarter results also showed the tension between demand and input costs. JetBlue said its average fuel price was $4.23 a gallon, 76% higher than a year earlier, even as it recaptured nearly half of the fuel burden through pricing. Premium revenue per available seat mile rose about 13%, while Main Cabin unit revenue increased 11%.

Chief executive Joanna Geraghty said after the second-quarter results that JetBlue was strengthening the foundation for a more profitable business. The company also set a long-term target of at least $1 in earnings per share for 2028, supported by initiatives intended to generate approximately $1.2 billion in annual incremental earnings before interest and taxes by the end of that year.

JetBlue’s network structure makes disruptions in the Northeast especially significant. The airline has previously warned that air traffic control staffing shortages in the Northeast and Florida can force capacity reductions and increase delays and cancellations. Federal Aviation Administration slot relief in New York has provided airlines with some flexibility to reduce schedules without losing valuable operating rights.

The carrier’s turnaround has required it to manage factors outside its control alongside internal restructuring. Fuel volatility, grounded aircraft linked to Pratt & Whitney engine inspections and congested northeastern airspace have all affected planning, while management has been shifting flying towards markets where it sees stronger returns.