Jetblue nasdaq Jblu Shares Take a Hit As Q1 2024 Outlook Dampens Investor Sentiment

JetBlue (NASDAQ: JBLU) Shares Take a Hit as Q1 2024 Outlook Dampens Investor Sentiment

JetBlue Airways Corporation (NASDAQ: JBLU) stock fell nearly 5% on Tuesday after the airline issued a grim outlook for the first quarter of 2024.

JetBlue Airways (JBLU) announced on Tuesday that it is considering additional cost reductions in response to a projected decline in first-quarter revenue, indicative of a potential weakening in domestic demand.

The company is grappling with engine issues linked to Pratt and Whitney’s Geared Turbofan engines used in multiple JetBlue aircraft. Currently, seven of their planes are out of service, and this number is expected to rise to between 13 and 15 by the end of 2024.

The airline industry faces pressure from rising costs and declining domestic travel demand, raising concerns about overall profitability. Smaller airlines also encounter challenges competing on pricing against larger carriers.

JetBlue foresees a decline in first-quarter revenue of between 9% and 5%, while it projects the full-year revenue to remain unchanged from the previous year.

However, the company posted a lower-than-expected loss of 19 cents per share, compared to the 28 cents loss forecasted by analysts, as per LSEG data.

JetBlue also announced its plan to shift underperforming capacity towards premium leisure and high-demand markets.

JetBlue (NASDAQ: JBLU) Stock Reaction

JBLU stock dropped 4.73% on Tuesday. The traders had exchanged hands with 29,675,405 (29.67 million) shares compared to the average daily trading volume of 18.23 million.