JetBlue forecasts full-year revenue below Street estimates, shares fall

(Reuters) -JetBlue Airways forecast a bigger-than-expected fall in 2024 revenue amid a moderation in domestic travel demand ahead of the upcoming U.S. elections, sending its shares down 14% in early trading on Tuesday.

Election-related uncertainty is expected to weigh on travel demand as consumers prefer to be home and hold off on major discretionary spending.

JetBlue expects to see a one percentage point headwind to its fourth-quarter revenue per available seat mile, a proxy for pricing power, due to the election.

It also expects to shave a percentage point from its unit revenue for the fourth quarter due to Hurricane Milton that caused widespread damage across Florida.

The New York-based carrier expects its 2024 revenue to fall between 4% and 5%, compared with analysts’ average expectation of a 3.6% fall, according to data compiled by LSEG.

The airline is also facing higher operating costs as ongoing inspections of Pratt & Whitney’s Geared Turbofan engines have grounded a number of its aircraft.

JetBlue, however, managed to report a smaller-than-expected third-quarter loss on Tuesday, owing to improved demand and pricing in the quarter.

During the U.S. summer travel season, an oversupply of airline seats led to discounted fares as carriers tried to fill planes, which negatively impacted their earnings. Since then, U.S. airlines have reduced their capacity.

JetBlue has taken measures to improve its financial position following the fallout of its proposed $3.8 billion merger with ultra-low-cost carrier Spirit Airlines (NYSE:SAVE) in March.

JetBlue has deferred deliveries of 44 new jets from Airbus, reducing planned capital expenditures between 2025 and 2029 by about $3 billion.

The airline reported an adjusted loss of 16 cents per share, compared with estimates of a 25 cents loss.