JetBlue Sees Cooler Demand

Updated from 9:34 a.m. EDT

JetBlue(JBLU Quote - Cramer on JBLU - Stock Picks) recovered quickly from its mid-February weather and operational problems, but the low-fare carrier says it's facing weaker second-quarter demand.

"May and June bookings are showing signs of softening," said CEO David Neeleman on a conference call Tuesday. The trend could be cyclical, he suggested. "Sometimes you have a really good quarter, then people take a quarter off and pay off their credit cards, and they come back to you the next quarter," he said.

In the first quarter, JetBlue's passenger revenue per available seat mile grew 8.6%. March passenger RASM rose 17%, the carrier said, as Easter and Passover traffic shifted into the first quarter. As a result, April "will be kind of flat," Neeleman said. Second-quarter passenger RASM growth will be 6% to 8%.

A Valentine's Day storm resulted in about 1,200 canceled flights and cost JetBlue roughly $41 million, including $24 million for passenger vouchers and $17 million in lost revenue. But the carrier learned lessons that enabled it to avoid any meaningful financial impact from a storm the following month that resulted in about 480 cancellations.

In that case, JetBlue called off more first-day flights and flew 93% of its second-day flights. "As painful as the St. Valentines Day event was, we've learned a lot from it," Neeleman said. "We are a better airline and we're more capable of responding to similar situations."

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