JetBlue Airways Corporation (NASDAQ: JBLU) today reported its
results for the first quarter 2021:
- Reported GAAP loss per share of ($0.78) in the first quarter of
2021 compared to a diluted earnings per share of $0.14 in the first
quarter of 2019. Adjusted loss per share was ($1.48)(1) in the
first quarter of 2021 versus adjusted diluted earnings per share of
$0.16(1) in the first quarter of 2019. Note A to this earnings
release includes the GAAP to Non-GAAP reconciliation between
reported and adjusted diluted earnings per share.
- GAAP pre-tax loss of ($347) million in the first quarter of
2021, compared to a pre-tax income of $58 million in the first
quarter of 2019. Excluding one-time items, adjusted pre-tax loss of
($636) million(1) in the first quarter of 2021 versus adjusted
pre-tax income of $70 million(1) in the first quarter of 2019.
Operational Highlights from the First
Quarter
- First quarter 2021 revenue declined 61% year over two as a
result of the impact of COVID-19. The decline is on the lower end
of our prior expectations for the quarter of a 61 to 64% decline
year over two, and represents a six-point sequential improvement
quarter over quarter, mainly driven by sustained momentum in
booking trends for leisure travel beginning in mid-February.
- Reduced first quarter 2021 capacity by 41% year over two, in
line with our original planning assumption, as a result of actions
taken to capture improving demand, manage cash burn and protect
liquidity.
- Operating expenses declined 43% year over two. Excluding
special items, adjusted operating expenses declined 26%(1) year
over two, which is better than our planning assumption of a
decrease of 25% year over two, despite higher fuel prices. The
results were driven by capacity reductions and initiatives taken to
reduce variable and fixed costs.
- Resulting primarily from the actions taken, JetBlue’s Adjusted
Earnings Before Interest, Taxes, Depreciation, Amortization and
Special Items (Adjusted EBITDA) in the first quarter of 2021 was
($458) million(1), better than the ($490) to ($540) million range
previously expected.
Balance Sheet and Liquidity
- JetBlue ended the first quarter of 2021 with approximately $3.2
billion in unrestricted cash, cash equivalents, and short-term
investments, or 40% of 2019 revenue.
- JetBlue repaid $94 million in regularly scheduled debt and
finance lease obligations and repaid the fully drawn $550 million
revolving credit facility during the first quarter of 2021.
- JetBlue has taken the following measures in the first quarter
to manage liquidity:
- Raised approximately $750 million with a convertible debt
offering transaction.
- Continued to achieve significant savings through aggressive
capacity management and executing actions to manage our fixed and
variable cost structure.
- Redeployed assets to capture short-term, tactical cash
generation opportunities and make long term network investments in
our focus cities.
Fuel Expense and Hedging
The realized fuel price in the first quarter 2021 was $1.72 per
gallon, a 16% decline versus first quarter 2019 realized fuel price
of $2.05.
As of April 27 2021, JetBlue has not entered into forward fuel
derivative contracts to hedge its fuel consumption for the second
quarter of 2021. Based on the forward curve as of April 16th,
JetBlue expects an average all-in price per gallon of fuel of $1.87
in the second quarter of 2021.
Our Recovery Plan and Actions Taken to
Position JetBlue for Future Success
“Although our EPS remains in negative territory, we have seen
meaningful progress in the demand recovery, and have started to
gain momentum from the groundwork we have laid to emerge from the
crisis as a stronger JetBlue,” said Robin Hayes, JetBlue’s Chief
Executive Officer.
“Looking back to our work from 2020, I could not be more
confident in our future. Our teams continue executing our
comprehensive recovery plan, reducing our cash burn, rebuilding our
margins, and repairing our balance sheet. We have seen positive
cash from operations for March, and this milestone is our first
step towards achieving positive EBITDA and returning to
profitability.”
Action Plan, Revenue and
Capacity
“While we initially anticipated trends improving during the
quarter, we saw a bigger than expected step up in demand for
leisure travel beginning in mid-February,” said Joanna Geraghty,
JetBlue’s President and Chief Operating Officer.
“For the second quarter of 2021, our planning assumption for
revenue is a decline of between (30%) and (35%) year over two, the
largest sequential improvement in our revenue since the start of
the pandemic. We expect unit revenue to significantly improve,
driven by both increasing load factors and improving yields.
“During the pandemic we have been focused on balancing supply
and demand, managing our capacity to maximize revenue and rebuild
our margins. For the second quarter of 2021, our planning
assumption is for capacity to decline approximately (15%) year over
two, given the strong sequential improvement in demand.”
Financial Performance and
Outlook
“In March we reached breakeven cash from operations and our
first quarter Adjusted EBITDA(1) was ahead of the range we
anticipated, a result of improving revenue trends and continuing to
successfully manage our cost structure, despite increasing fuel
prices,” said Steve Priest, JetBlue’s Chief Financial Officer.
“For the second quarter, we estimate EBITDA will range between
($100) and ($200) million (2), reflecting an acceleration of
demand, partly offset by cost pressures from fuel prices, and
airport rents and landing fees. On an EBITDA basis, we believe we
will reach breakeven in the third quarter, and expect to remain in
positive territory through the end of the year.
“Since the start of the pandemic, we have gone deep on our cost
structure with a focus on our fixed cost base, adding to the
continued momentum from our Structural Cost Program. We expect to
achieve better than 2019 CASM ex-fuel in 2022, providing a path to
expand our EBITDA and ultimately, our pre-tax margins.
“Going forward, as we produce positive cash from operations, we
plan to prioritize paying down high cost debt. We also intend to
continue to take a strategic and measured approach to return to
investment grade metrics and a debt to cap ratio between 30% and
40%.”
Earnings Call Details
JetBlue will conduct a conference call to discuss its quarterly
earnings today, April 27, 2021 at 10:00 a.m. Eastern Time. A live
broadcast of the conference call will also be available via the
internet at http://investor.jetblue.com. The webcast replay and
presentation materials will be archived on the company’s
website.
For further details see the First Quarter 2021 Earnings
Presentation available via the internet at
http://investor.jetblue.com.
About JetBlue
JetBlue is New York’s Hometown Airline®, and a leading carrier
in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San
Juan. JetBlue carries customers across the U.S., Caribbean, and
Latin America. For more information, visit jetblue.com.
Notes
(1)
Non-GAAP financial measure; Note
A provides a reconciliation of non-GAAP financial measures used in
this release and explains the reasons management believes that
presentation of these non-GAAP financial measure provides useful
information to investors regarding the JetBlue’s financial
condition and results of operations.
(2)
The Company has not reconciled
its Adjusted EBITDA planning assumptions to net income because net
income (loss) is not accessible on a forward-looking basis. Items
that impact net income (loss) are out of the Company’s control
and/or cannot be reasonably predicted. Accordingly, a
reconciliation to net income (loss) is not available without
unreasonable effort.
Forward-Looking Statements
Forward-Looking Information Statements in this Earnings Release
(or otherwise made by JetBlue or on JetBlue’s behalf) contain
various forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, or the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, which represent our management’s
beliefs and assumptions concerning future events. These statements
are intended to qualify for the “safe harbor” from liability
established by the Private Securities Litigation Reform Act of
1995. When used in this Earnings Release, the words “expects,”
“plans,” “anticipates,” “indicates,” “believes,” “forecast,”
“guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets”
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements involve risks,
uncertainties, and assumptions, and are based on information
currently available to us. Actual results may differ materially
from those expressed in the forward-looking statements due to many
factors, including, without limitation, the coronavirus
("COVID-19") pandemic and the outbreak of any other disease or
similar public health threat that affects travel demand or
behavior; restrictions on our business related to the financing we
accepted under various federal government support programs such as
the CARES Act, and the Consolidated Appropriations Act, 2021; our
significant fixed obligations and substantial indebtedness; risk
associated with execution of our strategic operating plans in the
near-term and long-term; the recording of a material impairment
loss of tangible or intangible assets; our extremely competitive
industry; volatility in financial and credit markets which could
affect our ability to obtain debt and/or lease financing or to
raise funds through debt or equity issuances; volatility in fuel
prices, maintenance costs and interest rates; our reliance on high
daily aircraft utilization; our ability to implement our growth
strategy; our ability to attract and retain qualified personnel and
maintain our culture as we grow; our reliance on a limited number
of suppliers, including for aircraft, aircraft engines and parts
and vulnerability to delays by those suppliers; our dependence on
the New York and Boston metropolitan markets and the effect of
increased congestion in these markets; our reliance on automated
systems and technology; our being subject to potential
unionization, work stoppages, slowdowns or increased labor costs;
our presence in some international emerging markets that may
experience political or economic instability or may subject us to
legal risk; reputational and business risk from information
security breaches or cyber-attacks; changes in or additional
domestic or foreign government regulation, including new or
increased tariffs; changes in our industry due to other airlines’
financial condition; acts of war or terrorism; global economic
conditions or an economic downturn leading to a continuing or
accelerated decrease in demand for air travel; adverse weather
conditions or natural disasters; and external geopolitical events
and conditions. It is routine for our internal projections and
expectations to change as the year or each quarter in the year
progresses, and therefore it should be clearly understood that the
internal projections, beliefs, and assumptions upon which we base
our expectations may change prior to the end of each quarter or
year.
Given the risks and uncertainties surrounding forward-looking
statements, you should not place undue reliance on these
statements. Further information concerning these and other factors
is contained in the Company’s Securities and Exchange Commission
filings, including but not limited to, the Company’s 2020 Annual
Report on Form 10-K and its Quarterly Reports on Form 10-Q. In
light of these risks and uncertainties, the forward-looking events
discussed in this presentation might not occur. Our forward-looking
statements speak only as of the date of this presentation. Other
than as required by law, we undertake no obligation to update or
revise forward-looking statements, whether as a result of new
information, future events, or otherwise.
This Earnings Release also includes certain “non-GAAP financial
measures” as defined under the Exchange Act and in accordance with
Regulation G. We have included reconciliations of these non-GAAP
financial measures to the most directly comparable financial
measures calculated and provided in accordance with U.S. GAAP
within this release.
JETBLUE AIRWAYS CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS (in millions, except per share amounts)
(unaudited)
Three Months Ended March
31,
Percent Change
2021
2020
2019
1Q21 vs. 1Q20
1Q21 vs. 1Q19
OPERATING REVENUES Passenger
$
670
$
1,511
$
1,802
(55.7
)
(62.9
)
Other
63
77
69
(18.0
)
(9.2
)
Total operating revenues
733
1,588
$
1,871
(53.9
)
(60.9
)
OPERATING EXPENSES Aircraft fuel and related taxes
193
365
437
(47.0
)
(55.7
)
Salaries, wages and benefits
521
601
575
(13.2
)
(9.4
)
Landing fees and other rents
115
112
115
3.0
(0.4
)
Depreciation and amortization
125
139
124
(10.4
)
0.4
Aircraft rent
25
21
25
14.9
(1.7
)
Sales and marketing
23
53
66
(57.2
)
(65.8
)
Maintenance, materials and repairs
104
160
155
(34.9
)
(32.9
)
Other operating expenses
210
269
286
(22.1
)
(26.6
)
Special items
(289
)
202
12
(242.6
)
(2,585.5
)
Total operating expenses
1,027
1,922
1,795
(46.6
)
(42.8
)
OPERATING (LOSS) INCOME
(294
)
(334
)
76
(11.9
)
(487.8
)
Operating margin
-40.2
%
-21.0
%
4.1
%
(19.2
)
pts.
(44.3
)
pts.
OTHER INCOME (EXPENSE) Interest expense
(58
)
(25
)
(20
)
129.4
190.8
Capitalized interest
3
3
3
(7.8
)
11.7
Interest income and other
2
2
(1
)
26.9
(367.0
)
Total other income (expense)
(53
)
(20
)
(18
)
(162.6
)
191.4
(LOSS) INCOME BEFORE INCOME TAXES
(347
)
(354
)
58
(2.1
)
(698.0
)
Pre-tax margin
-47.3
%
-22.3
%
3.1
%
(25.0
)
pts.
(50.4
)
pts. Income tax (benefit) expense
(100
)
(86
)
16
16.2
(710.5
)
NET (LOSS) INCOME
$
(247
)
$
(268
)
$
42
(8.0
)
(693.1
)
(LOSS) EARNINGS PER COMMON SHARE: Basic
$
(0.78
)
$
(0.97
)
$
0.14
Diluted
$
(0.78
)
$
(0.97
)
$
0.14
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic
316.3
277.2
305.3
Diluted
316.3
277.2
306.9
JETBLUE AIRWAYS CORPORATION COMPARATIVE OPERATING
STATISTICS (unaudited)
Three Months Ended March
31,
Percent Change
2021
2020
2019
1Q21 vs. 1Q20
1Q21 vs. 1Q19
Revenue passengers (thousands)
4,463
8,150
10,165
(45.2
)
(56.1
)
Revenue passenger miles (millions)
5,808
10,392
12,734
(44.1
)
(54.4
)
Available seat miles (ASMs) (millions)
9,090
14,891
15,437
(39.0
)
(41.1
)
Load factor
63.9
%
69.8
%
82.5
%
(5.9
)
pts.
(18.6
)
Aircraft utilization (hours per day)
5.9
10.6
11.8
(44.3
)
(50.0
)
Average fare
$
149.97
$
185.44
$
177.24
(19.1
)
(15.4
)
Yield per passenger mile (cents)
11.52
14.54
14.15
(20.8
)
(18.6
)
Passenger revenue per ASM (cents)
7.36
10.15
11.67
(27.5
)
(36.9
)
Revenue per ASM (cents)
8.06
10.67
12.12
(24.5
)
(33.5
)
Operating expense per ASM (cents)
11.30
12.91
11.63
(12.5
)
(2.9
)
Operating expense per ASM, excluding fuel (cents)(1)
12.25
9.01
8.66
36.0
41.4
Departures
44,049
83,295
89,236
(47.1
)
(50.6
)
Average stage length (miles)
1,277
1,160
1,153
10.1
10.8
Average number of operating aircraft during period
266.0
259.1
252.9
2.7
5.2
Average fuel cost per gallon, including fuel taxes
$
1.72
$
1.86
$
2.05
(7.4
)
(16.0
)
Fuel gallons consumed (millions)
112
197
213
(42.8
)
(47.3
)
Average number of full-time equivalent crewmembers
14,493
18,698
18,292
(1) Refer to Note A at the end of our Earnings Release for more
information on this non-GAAP financial measure. Operating expense
per available seat mile, excluding fuel (“CASM Ex-Fuel”) excludes
fuel and related taxes, other non-airline operating expenses, and
special items.
JETBLUE AIRWAYS CORPORATION SELECTED
CONSOLIDATED BALANCE SHEET DATA (in millions)
March 31,
December 31,
December 31,
2021
2020
2019
(unaudited) Cash and cash equivalents
$
2,358
$
1,918
$
959
Total investment securities
867
1,137
372
Total assets
13,660
13,406
11,918
Total debt
5,082
4,863
2,334
Stockholders’ equity
3,714
3,951
4,799
Note A – Non-GAAP Financial Measures
JetBlue uses non-GAAP financial measures in this Earnings
Release. Non-GAAP financial measures are financial measures that
are derived from the consolidated financial statements, but that
are not presented in accordance with generally accepted accounting
principles in the United States, or GAAP. We believe these non-GAAP
financial measures provide a meaningful comparison of our results
to others in the airline industry, and our prior year and year over
two results. Investors should consider these non-GAAP financial
measures in addition to, and not as a substitute for, our financial
performance measures prepared in accordance with GAAP. Further, our
non-GAAP information may be different from the non-GAAP information
provided by other companies. The information below provides an
explanation of each non-GAAP financial measure and shows a
reconciliation of non-GAAP financial measures used in this Earnings
Release to the most directly comparable GAAP financial
measures.
Operating expense per available seat mile, excluding fuel and
related taxes, other non-airline operating expenses, and special
items (“CASM Ex-Fuel”)
Operating expenses per available seat mile, or CASM, is a common
metric used in the airline industry. We exclude aircraft fuel and
related taxes, operating expenses related to other non-airline
businesses, such as JetBlue Technology Ventures and JetBlue Travel
Products, and special items from operating expenses to determine
CASM ex-fuel, which is a non-GAAP financial measure.
In the first quarter of 2021, special items include
contra-expenses recognized on the utilization of payroll support
grants received under the Consolidated Appropriations Act, 2021,
and contra-expenses recognized on the Employee Retention Credits
provided by the CARES Act.
Special items in the first quarter of 2020 include the
impairment charge of our Embraer E190 fleet resulting from the
decline in demand caused by the coronavirus ("COVID-19")
pandemic.
Special items for the first quarter of 2019 include one-time
costs related to the Embraer E190 fleet transition as well as
one-time costs related to the implementation of our pilots’
collective bargaining agreement.
We believe that CASM ex-fuel is useful for investors because it
provides investors the ability to measure financial performance
excluding items beyond our control, such as fuel costs, which are
subject to many economic and political factors, or not related to
the generation of an available seat mile, such as operating expense
related to certain non-airline businesses. We believe this non-GAAP
measure is more indicative of our ability to manage airline costs
and is more comparable to measures reported by other major
airlines.
NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING
EXPENSE PER ASM, EXCLUDING FUEL ($ in millions, per ASM data
in cents) (unaudited)
Three Months Ended March
31,
2021
2020
2019
$
per ASM
$
per ASM
$
per ASM
Total operating expenses
$
1,027
$
11.30
$
1,922
$
12.91
$
1,795
$
11.63
Less: Aircraft fuel and related taxes
193
2.13
365
2.45
437
2.83
Other non-airline expenses
10
0.10
14
0.09
9
0.06
Special items
(289
)
(3.18
)
202
1.36
12
0.08
Operating expenses, excluding fuel
$
1,113
$
12.25
$
1,341
$
9.01
$
1,337
$
8.66
Operating expense, (loss) income before taxes, net (loss)
income and (loss) earnings per share, excluding special
items
Our GAAP results in the applicable periods were impacted by
charges that are deemed special items.
In the first quarter of 2021, special items include
contra-expenses recognized on the utilization of payroll support
grants received under the Consolidated Appropriations Act, 2021,
and contra-expenses recognized on the Employee Retention Credits
provided by the CARES Act.
Special items in the first quarter of 2020 include the
impairment charge of our Embraer E190 fleet resulting from the
decline in demand caused by the COVID-19 pandemic.
Special items for the first quarter of 2019 include one-time
costs related to the Embraer E190 fleet transition as well as
one-time costs related to the implementation of our pilots’
collective bargaining agreement.
We believe the impact of these items distort our overall trends
and that our metrics are more comparable with the presentation of
our results excluding the impact of these items. The table below
provides a reconciliation of our GAAP reported amounts to the
non-GAAP amounts excluding the impact of these items.
NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING
EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS)
EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS (in millions,
except per share amounts) (unaudited)
Three Months Ended March
31,
2021
2020
2019
Total operating revenues
$
733
$
1,588
$
1,871
Total operating expenses
$
1,027
$
1,922
$
1,795
Less: Special items
(289
)
202
12
Total operating expenses excluding special items
$
1,316
$
1,720
$
1,783
Operating (loss) income
$
(294
)
$
(334
)
$
76
Add back: Special items
(289
)
202
12
Operating (loss) income excluding special items
$
(583
)
$
(132
)
$
88
Operating margin excluding special items
-79.6
%
-8.3
%
4.7
%
(Loss) income before income taxes
$
(347
)
$
(354
)
$
58
Add back: Special items
(289
)
202
12
(Loss) income before income taxes excluding special items
$
(636
)
$
(152
)
$
70
Pre-tax margin excluding special items
-86.7
%
-9.5
%
3.7
%
Net (loss) income
$
(247
)
$
(268
)
$
42
Add back: Special items
(289
)
202
12
Less: Income tax (expense) benefit related to special items
(69
)
50
3
Net (loss) income excluding special items
$
(467
)
$
(116
)
$
51
(Loss) Earnings Per Common Share: Basic
$
(0.78
)
$
(0.97
)
$
0.14
Add back: Special items, net of tax
(0.70
)
0.55
0.02
Basic excluding special items
$
(1.48
)
$
(0.42
)
$
0.16
Diluted
$
(0.78
)
$
(0.97
)
$
0.14
Add back: Special items, net of tax
(0.70
)
0.55
0.02
Diluted excluding special items
$
(1.48
)
$
(0.42
)
$
0.16
Adjusted Earnings before interest, taxes, depreciation,
amortization, and special Items
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) is a non-GAAP financial measure. We further adjusted
EBITDA to account for the impact of special items which are unusual
or infrequent in nature.
In the first quarter of 2021, special items include
contra-expenses recognized on the utilization of payroll support
grants received under the Consolidated Appropriations Act, 2021,
and contra-expenses recognized on the Employee Retention Credits
provided by the CARES Act.
Special items in the first quarter of 2020 include the
impairment charge of our Embraer E190 fleet resulting from the
decline in demand caused by the COVID-19 pandemic.
Special items for the first quarter of 2019 include one-time
costs related to the Embraer E190 fleet transition as well as
one-time costs related to the implementation of our pilots’
collective bargaining agreement.
We believe this measure allows investors to better understand
the financial performance of the company by presenting earnings
from our business operations without including the effects of
capital structure, tax rates, depreciation, amortization, and
special items.
NON-GAAP FINANCIAL MEASURE EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AMORTIZATION, AND SPECIAL ITEMS (in
millions) (unaudited)
Three Months Ended March
31,
2021
2020
2019
Net (loss) income
$
(247
)
$
(268
)
$
42
Less: Interest (expense)
(58
)
(25
)
(20
)
Capitalized interest
3
3
3
Interest income and other
2
2
(1
)
Add back: Income tax (benefit) expense
(100
)
(86
)
16
Depreciation and amortization
125
139
124
Earnings before interest, taxes, depreciation, and amortization
$
(169
)
$
(195
)
$
200
Add back: Special items
(289
)
202
12
Earnings before interest, taxes, depreciation, amortization, and
special items
$
(458
)
$
7
$
212
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427005362/en/
JetBlue Investor Relations Tel: +1 718 709 2202
ir@jetblue.com
JetBlue Corporate Communications Tel: +1 718 709 3089
corpcomm@jetblue.com
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