JetBlue Loss Narrower Than Expected

JetBlue (JBLU Quote) lost $8 million in the first quarter and said it will slow capacity growth when the summer travel season ends.

The loss was equal to 4 cents a share, 3 cents better than what analysts had estimated. Revenue rose 34.2% to $816 million and exceeded the consensus forecast of $786 million.

In the same quarter a year earlier, the carrier lost $22 million, or 12 cents a share.

"We continue to see healthy demand throughout our network, and we are encouraged with the industry's more disciplined approach to capacity," said CEO Dave Barger, in a prepared statement. "However, JetBlue is not immune to the unprecedented rise in fuel prices, and we are taking steps to respond to this environment."

Shares of JetBlue were up 3% early Tuesday.

Barger said 2008 capacity will now grow by 3% to 5%. Additionally, the carrier said that starting June 1, it will join in an industry trend, charging $20 for a second checked bag.

For the quarter, passenger revenue per available seat mile grew by 16.5%, as yield rose 20.2%. Capacity increased by 13.9%, while load factor declined by 2.4 points to 78.2%.

On the expense side, cost per available seat mile grew by 12.8%. Excluding fuel, CASM decreased by 0.2% to 5.84 cents.

Looking ahead, JetBlue said it expects passenger RASM to rise by 8% to 10% this year, while CASM, excluding fuel, will grow by 6% to 8%. During the second quarter, the carrier's pretax margin will be between negative 3% and negative 1%.

This is the second busy week for quarterly results from the airline sector. Also Tuesday, AirTran (AAI Quote) had a wider-than-expected loss and said it will slow capacity growth. UAL (UAUA Quote), the owner of United, missed analysts' bottom-line expectations.

Later this week, Delta (DAL Quote) and Northwest (NWA Quote), who plan to merge, will post their numbers. Continental (CAL Quote), Southwest (LUV Quote) and AMR (AMR Quote), the parent of American Airlines, reported last week.