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JetBlue Posts Wider-than-Expected Loss as Air Travel Stifled

JetBlue Airways reports a first-quarter revenue miss as the coronavirus pandemic continues to stifle air travel.
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JetBlue Airways  (JBLU) - Get Free Report reported a wider-than-expected first-quarter loss Thursday, as the budget air carrier saw demand plummet in the face of the coronavirus pandemic.

Shares of the Long Island City, New York-based company were rising 2.9% to $8.25.

JetBlue reported a net loss of $268 million, or 97 cents a share, down from net income of $42 million, or 14 cents a share, a year ago. Adjusted losses came to 42 cents a share, above the 30-cent loss expected by analysts polled by FactSet. 

Revenue totaled $1.59 billion, down 15.1% from a year ago, missing FactSet's call for $1.7 billion in revenue

Revenue suffered a 52% decline in March due to the impact of the coronavirus outbreak, resulting in lower demand volumes and "a very challenging fare environment following a very solid start to the year," the company said.

Load factor fell 69.8% from 82.5%, as traffic dropped 18.4% and capacity fell 3.5%; capacity in March alone fell 19%.

JetBlue said it expects to reduce its daily cash burn from an average of $18 million in the second half of March to just below $10 million in May, excluding the CARES Act support of about $5 million per day through the end of the third quarter.

The air carrier said it had reached an agreement with the Treasury Department to receive $936 million under the Payroll Support Program of the CARES Act, consisting of $685 million in grants and $251 million in an unsecured term loan.

JetBlue recently asked for permission to stop flights at 16 airports, including Atlanta, Chicago, and Dallas, saying continued flights to those spots would “significantly harm” the company’s liquidity.

In addition, the air carrier said it revised its order book with Airbus to save $1.1 billion in aircraft spending through 2022.

U.S. airlines collectively have been burning more than $10 billion in cash a month and averaging fewer than two dozen passengers per domestic flight, due to the pandemic, Airlines for America's chief executive, Nicholas Calio told a Senate committee Wednesday. 

Billionaire investor Warren Buffett recently said the nearly $8 billion he'd invested in the country's four largest airline stocks had been a "mistake," telling investors at Berkshire Hathaway's  (BRK.A) - Get Free Report  (BRK.B) - Get Free Report annual meeting that the airline business has "changed in a very major way" that will leave carriers with fewer passengers and "too many planes."

JetBlue is doing a flyover through New York City tonight at 7 pm.