The Main Squawk: JetBlue is raising its third-quarter revenue forecast
Thanks to a stronger summer travel season and more robust operational performance than originally planned, the Queens-based carrier announced Thursday that it could see a modest gain in revenue of up to 1% compared to Q3 2023. It added that while a drop in revenue of up to 2.5% couldn’t be ruled out, this revised forecast was, in other words, better than its original estimate of a 1.5% and 5.5% decline for the quarter.
JetBlue has a few people it would like to thank for helping it squeeze a little more revenue out of the summer flying season: 1) CrowdStrike, for rolling out an update that would negatively impact operations at virtually all of the Major carriers in the U.S.; 2) Delta, for taking forever to get back on its feet; and 3) its employees, for maintaining a sound operation throughout the CrowdStrike outage—not that it will ensure any of them a greater profit sharing check.
Unlike its peers, the Airline performed well throughout the CrowdStrike outage. While other airlines were fighting off blue screens of death, JetBlue saw a large chunk of passengers move their reservations to the carrier with success. Who would have thought that a global IT crisis was exactly what the Airline needed to earn some profit?
Shares were up 4.6% at the end of last week following Thursday’s announcement.
JetBlue may benefit from Wall Street’s perception of Carl Icahn, the activist investor who has a near 10% stake in the carrier. On Friday, The New York Times ran a spot on state of the 88-year-old’s company which appears to be falling under “intense scrutiny” from his own investors.
Icahn Enterprises LP, the vessel which Mr. Icahn uses to launch his attacks, is down 50% over past year, losing nearly $15 billion in value since Q3 2023.
“There’s a confidence game and he’s lost the confidence of investors.”
Don Bilson, who focuses on activist investing at Gordon Haskett Research Advisors
If the value of Mr. Icahn’s company continues to erode, and if investors continue to lose strength in the once powerful “agent of change,” it’s possible he may need to sell off part of his stake in the Airline to recoup some cash. This could be a great thing for JetBlue, but it’s entirely dependent on how much further the investor is willing to watch the value of his shares decline.
Airfare prices are expected to drop in the coming weeks as the summer travel season comes to an end and the winter travel season debuts on October 27. While we all benefited from sky-high airfare and passengers who were willing to pay it, the realignment of these prices was only a matter of time.
Since the pandemic, the cost of travel was up 7% to 17% from what it was before the start of Covid. (Granted, the Consumer Price Index which tracks these prices also includes costs like hotels, meals, and rental cars, but it’s a good gauge nonetheless.)
Although these prices remain high today, airline executives across the industry believe the traveling public finally kicked the “post-pandemic travel itch.” Moving forward, they expect to sell fewer tickets at today’s prices.
For pilots, this isn’t a bad thing. Our earnings, and our qualities of life, benefit most when our employers operate an efficient schedule. As airfare declines over the next few months, airlines will be cutting capacity, allowing them to more appropriately utilize aircraft throughout their networks.
In other words, adios to those 100-mile narrowbody legs.
Newark suffered from an intermittent radar outage over Labor Day weekend, triggering rolling delays throughout one of the busiest holidays of the year.
In July, the FAA broke up the New York Terminal Radar Control (N90) facility on Long Island by physically moving the air traffic controllers responsible for shepherding traffic in and out of Newark to Philadelphia. The FAA’s way-of-thinking is that new hires will be more likely to work in the City of Brotherly Love as opposed to Long Island.
Not surprisingly, the move came with some glitches.
Since the inception of the idea to move the sector to Philadelphia, the FAA planned to forward radar scope data over landlines from Long Island instead of connecting the sector directly to the Newark radar antennas. The mistake, however, is that the FAA underestimated the amount of bandwidth being sent over these lines, resulting in intermittent radar outages twice in the past week.
American’s former Chief Commercial Officer is beginning to share his thoughts on his separation from the Fort Worth-based airline. Vasu Raja left the Company in May 2024 with a severance package that ties him over into the new year. While he’s almost certainly beholden to some type of non-disclosure agreement, he’s speaking out just four months after his termination.
In an interview with Skift last month, he highlighted the obvious changes that are occurring within the airline industry, which is perhaps why American CEO Robert Isom listened to his disciples and decided to show him the door.
Mr. Raja said that there was “a lot I would do differently,” while failing to provide the interviewer with the actual things he would do differently. He claimed there is room for new airlines in certain U.S. markets, that New York was a confirmed shit-show, and that the keys to the Airline’s success may rest upon the AAdvantage program.
Air France asked a New York-JFK Tower controller the one thing you don’t ask a controller.
American is being kicked off the S&P 500 and will be replaced by a series of technology companies. It will move to the S&P MidCap 400 at the end of the month.
Chicago-ORD was recently named airport with the most non-stop destinations (if you don’t count the flights that divert to Milwaukee).
Delta is cutting its daytime service from New York-JFK to Paris. Meanwhile, the Atlanta-based carrier is shoring up attorneys to fight CrowdStrike.
EasyJet pilots will apparently work with Virgin Atlantic in a “pilot exchange program,” which is kind of like a “student exchange program” with Airbus A350s.
Flair Airlines says it isn’t their problem if the guy next to you is manspreading.
JetBlue is beginning essential air service between Boston and Presque Isle, Maine.
The U.S. Department of Transportation is launching a probe into frequent flier programs at American, Delta, Southwest, and United.
United flight attendants voted to authorize a strike. Meanwhile, the Airline resumed service from Los Angeles-LAX to Shanghai after shutting it down at the start of the pandemic.
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