reported a pretax $49 million loss in the fourth quarter due to fuel-hedging losses and a charge but saw its revenue increase.
Operating revenue rose 10% to $811 million. Analysts polled by Thomson Reuters expected revenue of $807.8 million.
The airline hedged approximately 24% of its fuel consumption during the fourth quarter, resulting in a fuel price of $2.67 per gallon, a 14% increase over the year-ago quarter's price of $2.34. JetBlue recorded $58 million in losses on fuel hedges that settled during the fourth quarter. The airline also took a $53 million charge over the valuation of its auction rate securities, which fell in value as the credit crisis deepened.
As of Dec. 31, JetBlue had hedged approximately 8% of its projected fuel requirements for 2009. JetBlue expects an average price per gallon of fuel, including the impact of hedges, of $2.07 in the first quarter and $1.99 for the full year 2009.
"We expect lower fuel prices will provide significant savings to JetBlue in 2009," said Ed Barnes, JetBlue's CFO.
Operating revenue for the fourth quarter totaled $811 million, an increase of 9.8% over the fourth quarter of 2007. For the full year, operating revenue totaled $3.39 billion, an increase of 19.2% over 2007.
For the fourth quarter, revenue passenger miles decreased 5% year over year to 5.9 billion on a capacity decrease of 7.4%, resulting in a fourth quarter load factor of 78.6%, an increase of 2 points year over year.
Yield per passenger mile in the fourth quarter was 12.23 cents, up 12.3% compared to the fourth quarter of 2007. Passenger revenue per available seat mile (PRASM) for the fourth quarter 2008 increased 15.3% year over year to 9.62 cents. For the full year 2008, PRASM increased 14.0% year over year.
"While we are disappointed to report a loss, I am very proud of what JetBlue accomplished in 2008," said Dave Barger, CEO. "Against the backdrop of record fuel prices and unprecedented economic challenges, we effectively managed our capacity and strengthened our network.
Excluding the charge, the airline said it would have reported pretax income of $4 million, compared with a pretax loss of $3 million in the 2007 fourth-quarter.
JetBlue said it is evaluating the tax position of the special charge and will not report net income for the fourth quarter until mid-February.
For the full year, JetBlue reported a pretax loss of $76 million, compared with pretax income of $41 million a year earlier. Without the debt writedown in 2008, the company would have reported a pretax loss of $23 million.
JetBlue also announced Thursday that it would introduce service from New York to Los Angeles International Airport starting June 18. JetBlue will kick off its LAX service from the airport's Terminal 6 with two daily nonstop flights to New York's John F. Kennedy International Airport and two daily flights to Boston's Logan International Airport.
Most airlines reporting quarterly results -- including
today -- took losses on fuel hedging
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