JetBlue 1st quarter profits take 53% nosedive

JetBlue Airways Corp.'s first-quarter profit fell 53 percent, which the airline blamed on higher maintenance spending and weaker travel demand in the Northeast over a February holiday.
                

Profit fell short of Wall Street expectations, and JetBlue shares fell 33 cents, or 4.6 percent, to close at $6.85. The shares are still up 20 percent so far this year, however.

                
Airline stocks have rallied as carriers have reported full planes and investors wait for mergers to improve the companies' ability to raise fares.
                
JetBlue said Thursday that net income totaled $14 million, or 5 cents per share, down from $30 million, or 9 cents per share, a year earlier. Analysts expected 10 cents per share, on average.
                
The average fare rose about 2 percent to $162.53 each way, up from $159.93 a year ago. That helped boost revenue by 8 percent to $1.3 billion from $1.2 billion. Analysts expected $1.29 billion, according to a FactSet survey.
                
Higher revenue was offset by an 11 percent increase in operating costs. Maintenance costs jumped nearly 30 percent to $114 million as JetBlue spent more than it expected for work on General Electric engines on its 100-seat Embraer 190 jets. Fuel costs rose 8 percent to $467 million, and labor expenses went up about 10 percent to $280 million.
                

CEO Dave Barger said the first-quarter results were "solid" but below those of a year ago, mostly due to a weak President's Day travel holiday in the Northeast after Hurricane Sandy. The New York-based airline expects costs per mile to rise during 2013 partly because of higher maintenance spending.

                
While other airlines have been contracting to reduce costs and push up fares, JetBlue has expanded aggressively. The company said that it expects passenger-carrying capacity to grow between 6.5 and 8.5 percent in the second quarter and between 6 and 8 percent for all of 2013.
                
In an interview, Barger joined other airline executives in criticizing Congress, the White House and the Federal Aviation Administration for allowing furloughs of air traffic controllers to cause widespread delays at many airports this week.
                
Momentum gathered Thursday for a bill in Congress to roll back budget cuts for the FAA. Barger said Congress should remain in session until it passes the measure.
                
"They should delay their recess," he said. "And if they don't, their flights should be delayed so they can experience what we're experiencing."

(Associated Press)