JetBlue Posts Q1 2018 Results
JetBlue Airways Corp. reported its results for the first quarter 2018.
In a release on April 24, the Company noted highlights:
-Diluted earnings per share of $0.27. This compares to JetBlue's first quarter 2017 diluted earnings per share of $0.24 cents.
-Pre-tax income of $110 million, a decrease of 9.2 percent from the first quarter of 2017.
-Pre-tax margin of 6.3 percent, a 1.3 point decrease year over year.
Highlights from the First Quarter 2018
-First quarter 2018 revenue per available seat mile (RASM) growth of 6.1 percent, year over year, including the net benefit from Holiday calendar placement.
-Operating expenses per available seat mile, excluding fuel (CASM ex-fuel) of 3.1 percent, within the initial guidance range, despite a lower completion factor and offset by timing of maintenance expenses.
-JetBlue signed a multi-year agreement with Pratt & Whitney for the purchase and maintenance of GTF engines, as work on the Structural Cost Program continues.
Key Guidance for the Second Quarter and Full Year 2018:
-Capacity is expected to increase between 5.0 percent and 7.0 percent year over year in the second quarter 2018. For the full year 2018, JetBlue expects capacity to increase between 6.5 percent and 8.5 percent.
-RASM growth is expected to range between (3.0) percent and 0 percent for the second quarter 2018 compared to the same period in 2017.
-CASM Ex-Fuel is expected to grow between 2.0 percent and 4.0 percent for the second quarter of 2018. For the full year 2018, JetBlue expects year over year CASM Ex-Fuel to be between (1.0) percent and 1.0 percent.
"I'd like to thank our nearly 22,000 Crewmembers, who again did an exceptional job safely managing through the many snow storms that hit the Northeast during the first quarter, and into early April. Our strong RASM performance was driven by our revenue management initiatives, ongoing ancillary growth, and strong demand across our network. In addition, CASM ex-fuel growth was within our quarterly guidance, despite pressures from lower completion factor" said Robin Hayes, JetBlue's President and CEO.
This quarter JetBlue achieved an important milestone in its Structural Cost Program, with a new engine purchase and maintenance agreement with Pratt & Whitney. In addition, JetBlue continued to make capital-light investments to support a broad digital transformation strategy, and further grow its ancillary revenues. These are part of JetBlue's commercial and cost initiatives as it makes progress toward its goal of achieving superior margins.
Revenue Performance and Outlook
The Company noted, first quarter RASM growth exceeded expectations at 6.1 percent, above JetBlue's guidance range from early March of 3.5 percent to 5.5 percent. Lower completion factor resulted in capacity growth below the low-end of the guidance range from January.
JetBlue's Latin and Caribbean region was the brightest spot in its network during the first quarter, with leisure travel exceeding expectations. Growth remains targeted to Boston and Fort Lauderdale and skewed towards adding frequencies on existing routes. JetBlue continues to build relevance for its leisure and business customers, underpinning solid RASM growth and supporting its margin commitments.
"Since the end of 2017 demand has strengthened across our network, and we saw further close-in strength to end the quarter," said Marty St. George, JetBlue's EVP Commercial and Planning.
Cost Performance, Outlook and Balance sheet
JetBlue's solid revenue performance and cost management efforts were partially offset by increasing fuel prices. The company's focus on costs and the timing of certain expenses resulted in CASM ex-fuel within the guidance from January. JetBlue continues to expect its CASM ex-fuel growth to inflect during the second half of the year, driven by progress in its Structural Cost Program.
"We are delighted with having closed a 15-year deal for the purchase and maintenance of NEO engines. A minor portion of the expected savings from this agreement is included in our 3-year program, and most of the run rate savings will extend well beyond 2020. Our continued focus on costs and our recent accomplishment give us confidence that we will achieve our CASM ex-fuel commitments from 2018 to 2020," said Steve Priest, JetBlue's EVP Chief Financial Officer.
JetBlue also continued to maintain a balanced approach to capital allocation, which included debt repayment, one aircraft lease buy-out and $125 million in share repurchases in the quarter.
Capital Allocation and Liquidity
JetBlue ended the quarter with approximately $779 million in unrestricted cash and short term investments, or about 11 percent of trailing twelve month revenue. In addition, JetBlue maintains approximately $625 million in undrawn lines of credit.
During the first quarter, JetBlue repaid $58 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $65 million in regularly scheduled debt and capital lease obligations in the second quarter and approximately $197 million for the full year 2018.
Fuel Expense and Hedging
The realized fuel price in the quarter was $2.09 per gallon, a 23.8 percent increase versus first quarter 2017 realized fuel price of $1.69.
JetBlue does not presently have any forward fuel derivative contracts to hedge its fuel consumption. Based on the fuel curve as of April 13th, JetBlue expects an average price per gallon of fuel of $2.23 in the second quarter of 2018.
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THE DAILY VIEW
Gilt and Sarah Jessica Parker Unveil SJP by Sarah Jessica Parker Bridal Collection for Spring
Sarah Jessica Parker, in partnership with Gilt, kicked off the exclusive launch of SJP by Sarah Jessica Parker Bridal, Gilt’s first foray into bridal ready-to-wear that would have Carrie Bradshaw swooning.
The collection includes dresses, skirts, bodysuits and other pieces, ranging in price from $295 to $2,395 and from sizes 0 to 14.
"Collaborating with Gilt on my first bridal ready-to-wear collection was an opportunity I couldn't pass up," said Sarah Jessica Parker. "The team there is brilliant and allowed me to be imaginative and take risks as I was designing for the non-traditional bride. It has been quite fun to play around with colors, fabrics and details to create unique pieces for all kinds of brides." The collection, comprised of ten styles, is inspired by Parker's vision of a modern, non-traditional bride, and is designed to dress a woman for a variety of wedding milestone moments; from her bridal shower through her wedding reception. Styles offered are a unique mix of classic dresses and gowns, modern bodysuits, full skirts, and a jumpsuit. The color palette includes traditional bridal white, sleek black, plus pops of blush, poppy, light gray and blue.
Designed in collaboration with Gilt, the collection was produced in New York City utilizing fabrics like cashmere and stretch crepe sourced from Spain, Italy and France.
The pieces all feature carefully curated details like elegant bows, sophisticated cutouts, feathers, intricate embroidery and beautiful hand-stitched beading.
The actress and style icon is no stranger to chic bridal wear. Carrie Badshaw, famously played by Parker, took part in an elaborate bridal photo shoot in Sex and the City: The Movie. The shoot featured gowns from designers like Christian Lacroix and Lanvin. Parker famously wore a black wedding gown for her own wedding to Matthew Broderick in 1997.
"Not only is Sarah Jessica Parker's style known around the world, her point of view is one-of-a-kind," says Tom Ott, Chief Merchant of Gilt. "Sarah Jessica brings her impeccable taste and fashion sensibility to life in this collection. We think our customers will be delighted with the offering which is stylish and well-priced in the bridal category."
As part of the bridal launch, Gilt will also offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear line, each of which are complementary to the bridal collection.
To correspond with the bridal collection launch, Gilt City will present offers from some of Sarah Jessica Parker's favorite places in New York City.
The offers were each chosen as a way to help brides plan for and celebrate the big day with highlights including, Leather Spa, Lars Nord Studio Tailoring, Mah-Ze-Dahr Bakery, among others.
Tea Forté Introduces ‘Matcha’ Collection
Convenience meets tradition in Tea Forté’s new Ceremonial Matcha Bowl Set and the Matcha Single Steeps.
The company said its spring harvested, shade grown, stone ground, organic matcha tea is best served in a centuries-old Japanese tea ceremony called chanoyu: a preparation technique known for its centering meditative qualities.
"The launch of Tea Forté's Matcha collection represents our continued commitment to wellness and cultivating all the potential mental and physical health benefits of tea," says Tea Forté CEO Michael Gebrael. "In addition to our high quality Pure Matcha, we've also blended four distinct flavored Matcha varieties. Prepackaged in pouches measured out for a single serving, our Single Steeps Matcha is ideal for the office, travel, or to keep with you for a boost anytime."
Tea Forté noted its handcrafted ceremonial tea bowl, handmade bamboo whisk and measuring ladle “encourages serene enjoyment of our premium Kosher, gluten-free and vegan matcha blends.” These include: Pure Matcha, Chocolate Matcha, Coconut Matcha, Ginger Matcha, and Chai Matcha.
According to a release, in addition to its distinctive taste, matcha is prized for its health benefits. Steeped green tea contains only the antioxidants that can be extracted in water, while with matcha, the whole leaf is consumed.
Available now in select stores and online at teaforte.com.
Expedia.com has released a year-end look at U.S. traveler behavior and trends for 2017, analyzing data to identify the most in-demand destinations, hotels, activities and more.
Among other insights, the roundup revealed:
- Labor Day was the busiest weekend for car rental
- Disney Theme Parks topped the list of things to do
- The average hotel stay was two nights
- Top destinations based on 2017 air travel included major global cities like New York, London and Bangkok
- Popular tourist destinations included Orlando, Cancun and Las Vegas