JetBlue's Q3 Loss Widens to $257 Million as Fuel Bill Jumps 61%

JetBlue Airways posted a net loss of $257 million for the third quarter, up from a $143 million loss a year earlier, as its fuel bill surged 61% to $868 million.

The New York-based carrier reported the results Monday, one day after its shares fell to a new low. The airline is trying to reassure investors that its multiyear turnaround plan is working despite mounting cost pressure.

"Resilient demand and strong yields drove revenue well ahead of our initial expectations, allowing us to recapture more of the increase in fuel costs than we initially expected," CEO Joanna Geraghty said in the earnings release. "That momentum has carried into the fourth quarter, and Fort Lauderdale continues to deliver exceptional results even as we significantly grow capacity."

How did JetBlue's numbers compare with Wall Street estimates?

The results landed close to, but short of, analyst forecasts compiled by LSEG:

• Loss per share: 60 cents adjusted, versus a loss of 55 cents expected
• Revenue: $2.81 billion, versus $2.82 billion expected

Revenue missed by roughly $10 million. The adjusted per-share loss came in 5 cents wider than consensus. On the top line, though, demand held firmer than the airline itself had projected.

What is JetBlue's financial cushion?

The carrier said it ended the quarter with $2.2 billion in liquidity. Its unencumbered asset base now stands at $7 billion, including $2.8 billion in aircraft and engines.

That balance sheet matters now more than usual. A group of JetBlue's senior creditors is working with restructuring adviser PJT Partners, the Wall Street Journal reported Friday. JetBlue executives will face analysts' questions about the company's long-term health on an earnings call Tuesday at 10 a.m. ET.

In plain terms: JetBlue has breathing room, but its lenders are already positioning for the downside.

Can the turnaround plan fix the margins?

JetBlue last posted an annual profit in 2019. Its multiyear turnaround plan includes cutting unprofitable flying and boosting revenue through premium products, such as a new domestic first class section that recently went on sale.

Demand is not the problem. JetBlue said travel demand has remained strong even as fares climbed more than 20% this year. Fuel costs, not soft passengers, are squeezing the industry across the board.

Competition is the other pressure point. JetBlue tried to acquire now-defunct Spirit Airlines, but a federal judge blocked the deal as anticompetitive. A judge also rejected a regional partnership between JetBlue and American Airlines in the congested Northeast U.S., despite the carriers' argument that it would help them compete. JetBlue has since struck a partnership with United Airlines.

The takeaway: demand is stronger than expected and Geraghty says margins are improving, but with losses widening, creditors circling and the stock at a fresh low, Tuesday's analyst call will test whether investors buy the recovery story.