JetBlue (JBLU) reported a wider-than-expected third-quarter loss on Monday and cut its full-year margin outlook, but the stock jumped as demand remained strong.
JetBlue’s adjusted loss per share was $0.60 vs. the $0.55 analysts expected per Bloomberg consensus. Revenue rose 21.1% year over year to $2.81 billion.
The airline now expects an adjusted operating margin of (4.5)% to (6.5)% for 2026. That’s worse than its previous forecast of (2)% to (5)%, and the midpoint (5.8)% missed analysts’ expectations.
2.8350 +0.4650 (+19.62%)
As of 12:22:09 PM EDT. Market Open.
But JetBlue shares still rose in early trading on Tuesday after the airline said demand remains strong and has carried into the fourth quarter.
“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 a statement. “That momentum has carried into the fourth quarter, and Fort Lauderdale continues to deliver exceptional results even as we significantly grow capacity.”
Unit revenue (revenue per available seat mile, or what the airline earns for flying one seat one mile) rose 18.4%. Unit costs excluding fuel rose 7%.
Meanwhile, JetBlue paid an average of $3.91 a gallon, up 57.4%, which pushed fuel expense up 61% to $868 million. It expects to pay $4.64 a gallon in the fourth quarter.
The results arrive as bondholders grow nervous. Senior creditors are working with restructuring adviser PJT Partners and law firm Akin, the Wall Street Journal reported.
Creditors who hire advisers are usually organizing ahead of possible talks with the borrower, but it doesn’t necessarily mean a restructuring is underway.
Much of JetBlue’s debt is secured by its aircraft and its TrueBlue loyalty program. Total debt stood at $8.39 billion at the end of September, and the airline expects about $590 million in interest expense this year.
JetBlue ended the quarter with $2.2 billion in liquidity, including a $600 million undrawn credit facility. It expects $250 million in aircraft-backed financing to be funded in the fourth quarter, and it has about $7 billion in assets that aren’t pledged as collateral.
“We believe we have the liquidity and financing options to create a strong bridge to at least $1 EPS,” CFO Ursula Hurley said.
Recall that Spirit Airlines shut down this year following repeated bankruptcy filings; the company was poised to merge with JetBlue, but a federal court sided with the Biden administration in blocking the merger.
Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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