Storms, fuel costs to take toll on JetBlue
JetBlue Airways Corp., a low-fare carrier flying mainly on the East Coast, said third-quarter profit will be lower than it expected because of hurricanes that forced flight cancellations in Florida and high fuel costs.
The earnings will be "significantly lower than our previous estimates," New York-based JetBlue said on its website. The carrier didn't provide figures.
The average estimate was 19 cents a share in a Thomson Financial survey of analysts, and net income was $29 million, or 26 cents, a year earlier.
JetBlue canceled 262 flights when Hurricane Frances hit Florida last weekend. AirTran Holdings Inc., an Orlando, Fla.-based low-fare carrier, Tuesday forecast a loss for the quarter because of the two hurricanes in the past month and fuel costs.
Jet-fuel prices have risen 64 percent in the past year.
"Both of those airlines are very concentrated in the Eastern corridor, particularly from the upper Northeast down to the Southern markets, and they are going to pay the price for it," said analyst Darren Bagwell at Thrivent Financial in Appleton, Wis., which held about 45,000 JetBlue shares as of June.
JetBlue shares rose 7 cents to close at $23.14 in Nasdaq Composite trading. AirTran, which released its forecast after the close of trading Tuesday, fell 85 cents, or 7 percent, to $11.29 on the New York Stock Exchange.
AirTran shares probably fell as much as they did because of Delta Air Lines Inc.'s announcement that it would increase flights out of Atlanta, where it competes directly with AirTran, Bagwell said.
Atlanta-based Delta also said it would cut as many as 7,000 jobs as part of a plan to reduce costs.
AirTran "could have made more inroads in Atlanta if Delta had cut back," he said. "That's not good news for them."
Delta yesterday said the two hurricanes cost it about $25 million.
Hurricane Frances followed Hurricane Charley, which came ashore on Florida's western coast Aug. 13 and moved through the state's center, causing about $6.8 billion in insured losses.
