JetBlue Airways Corp. reported a narrower than expected first-quarter loss as slower growth helped the discount airline keep a lid on its costs despite skyrocketing fuel prices.
JetBlue, based in Forest Hills, New York, said Tuesday it lost $8 million (5.03 million), or 4 cents a share, during the first three months of 2008, an improvement from the loss of $22 million, or 12 cents a share, a year earlier.
Revenue rose to $816 million (513.27 million) from $608 million in the first quarter of 2007, a 34 percent increase.
Analysts polled by Thomson Financial had expected a loss of 7 cents a share on revenue of $786 million (494.4 million).
JetBlue also said it would charge passengers $20 (12.58) to check a second bag, following the lead of many other airlines which have imposed new bag-check fees. Airlines are scrambling to raise new revenue to counteract the effects of $118 oil.
"JetBlue is not immune to the unprecedented rise in fuel prices, and we are taking steps to respond to this environment," said Dave Barger, JetBlue's chief executive, in a statement.
Barger also said the airline will cut its capacity growth to between 3 percent and 5 percent this year from a previous plan to grow by 5 percent to 8 percent.
Barger has made slower growth a hallmark of his plan to reinvigorate JetBlue, which he took over last year after a February ice storm forced the cancellation of thousands of flights and cost founder and then-Chief Executive David Neeleman his job. Neeleman remained as chairman, but recently said he would not stand for re-election due to his involvement in setting up a new airline in Brazil.
Barger has said he thinks part of the reason JetBlue faced operational problems last year was that the airline had grown too fast.
Still, JetBlue continues to grow while many larger airlines are cutting the number of seats they fly domestically, where profit margins are not as strong as on international routes.
JetBlue's unit costs _ or what it pays to fly one seat one mile _ rose 12.8 percent in the first quarter compared to last year, more than the company forecast earlier in the year. But excluding fuel expenses, unit costs fell by 0.2 percent. Unit revenue rose by 16.5 percent.
Looking forward, JetBlue said unit revenue would increase by 8 percent to 10 percent in the second quarter, while unit costs will jump by 22 percent to 24 percent.
Excluding fuel expenses, costs will increase by 6 percent to 8 percent. JetBlue expects to generate an operating margin of between 1 percent and 3 percent in the second quarter, and a pretax margin of between negative 1 percent and negative 3 percent.
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