JetBlue Airways has faced a significant setback in its efforts to regain profitability, as its stock value plummeted by over 9% in premarket trading on Tuesday. The downturn was triggered by a revised revenue forecast for 2024, which fell short of expectations. The airline now anticipates a revenue decline of up to 10.5% in the second quarter, double the drop predicted by analysts. For the full year, JetBlue has revised its sales projection to a low single-digit drop, a departure from the flat sales estimate made in its January report.
In an attempt to reduce costs, JetBlue has been eliminating unprofitable routes and focusing on destinations with steady demand and high sales for premium seats. The carrier recently terminated its merger agreement with budget carrier Spirit Airlines after a judge blocked the $3.8 billion deal on antitrust grounds.
The updated outlook highlights a growing divide between JetBlue and its major rivals, such as Delta and United, which boast extensive international networks and have projected profits, strong revenue, and record demand for the summer season. CEO Joanna Geraghty acknowledged the challenges in an earnings release, stating that elevated capacity in Latin America, a significant portion of JetBlue’s network, will likely continue to impact revenue.
Despite the setbacks, Geraghty expressed confidence that the airline’s refocused standalone strategy will ultimately lead to a return to profitability.
