AirTran, JetBlue Clipped by Fuel Costs
Excluding special items related to fuel hedging, AirTran lost $61.9 million or 53 cents a share in the third quarter. Analysts surveyed by Thomson Reuters had estimated a loss of 39 cents. Revenue rose 10.6% to $673 million. Analysts had expected $676 million.
Including items, AirTran lost $107.1 million or 91 cents a share. In the same quarter a year earlier, it reported net income of $10.6 million or 11 cents a share. AirTran said fuel costs rose by $149 million from a year earlier.
JetBlue said it lost $4 million or 2 cents a share. Analysts had estimated a loss of 4 cents a share. Revenue rose 17.9% to $902 million. Analysts had estimated $899 million. In the same quarter a year earlier, JetBlue earned $23 million or 12 cents a share.On an earnings conference call, AirTran CEO Bob Fornaro said "no major airline in North America has faced the same headwinds as AirTran." The carrier has not been cushioned from the domestic downturn by international routes, he said, and it has been more sensitive to oil price increases because oil accounts for 51% of its costs, the highest percentage among major carriers. In the current quarter, revenue per available seat mile (RASM) is expected to increase by 7% to 9%, as capacity falls by 6% to 7%. A late Thanksgiving hurts November bookings, but December is "well ahead of last year," Fornaro said. With industry-low cost per available seat mile excluding fuel of 5.88 cents, "We are well-positioned to return to profitability in the coming quarters," Fornaro said. Meanwhile, at JetBlue, "We see continued strength in our bookings in the near term," said CEO Dave Barger, in a prepared statement. During the quarter, RASM grew by 20.8% as capacity fell by 2.4%. CASM excluding fuel rose by 13.8% to 5.96 cents. At Alaska (ALK), net income excluding special items was $39.9 million or $1.10 a share. Analysts surveyed by Thomson Reuters had estimated 93 cents. Revenue rose by about 1% to $1.1 billion, slightly ahead of estimates. A year earlier, Alaska earned $78.8 million or $1.93 a share. Including special items associated with fuel hedging, Alaska lost $86.5 million or $2.40 a share, reversing a year-ago gain of $81.8 million or $2.01 a share. Increased oil prices added costs of $110 million, the company said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV