JetBlue Airways Corporation (NASDAQ: JBLU) stock plummeted 19% in the intraday trading Tuesday after the airline issued disappointing revenue forecasts for the current quarter and full year, citing weak travel demand, especially in Latin America.
JetBlue Airways (NASDAQ: JBLU) has announced lower-than-expected guidance for the second quarter, citing a slowdown in demand for Latin American travel as a primary factor.
The airline forecasts a potential second-quarter revenue decrease of up to 10.5% compared to the previous year, more than double the decline analysts polled by LSEG expected. The carrier projects a low-single-digit percent decrease in full-year revenue, down from its prior flat outlook, also missing estimates.
Joanna Geraghty, CEO of JetBlue, acknowledged that JetBlue had overestimated the demand for flights to Latin America. She noted that the significant capacity in the Latin region, which constitutes a substantial portion of JetBlue’s network, is likely to continue exerting pressure on revenue.
JetBlue President Marty St. George noted the airline initiated cost-cutting measures in the first quarter. These measures include significant network adjustments to shift resources from unprofitable routes to proven leisure markets where JetBlue has historically performed well.
In the first quarter, JetBlue incurred a loss of $716 million, with a significant portion attributable to one-time charges, including expenses related to terminating its planned $3.8 billion acquisition of rival Spirit Airlines (NYSE: SAVE). Last month, a court ruling blocked the proposed merger with Spirit Airlines, thwarting the deal due to concerns about potential ramifications for consumer choice within the low-priced airline market.
Excluding the one-time charges, JetBlue posted an adjusted net loss of $145 million or 43 cents per share, less severe than analysts had anticipated. Revenue for the quarter declined by 5.1% year-over-year to $2.21 billion, in line with estimates.
JetBlue (NASDAQ: JBLU) Stock Movement
As of this report, the price of JBLU stock stands at $6.10, showing an 18.77% decrease from the previous trading session. This week, it has undergone a 6.58% decline in value. Trading activity has seen 37,018,576 (37.01 million) shares change hands, well above the average daily volume of 15.20 million.
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