Back in July, I pondered whether the airlines' June operating metrics portended a sea change (or perhaps a sky change?) in the industry. Legacy carriers from UAL
Low-cost carrier JetBlue
Operating revenue grew at a 22% clip over the prior year. Top-line growth has always been JetBlue's strong suit -- as of June 30, sales at the dynamic discounter had compounded at a 41% five-year annual rate.
The bigger sticking point in recent years has been profitability, but there's good news on that front as well. JetBlue flew roughly 2% fuller flights, even with an 11% boost in the number of seats available. Because revenue per passenger per mile rose more rapidly than expenses on the same basis, the operating margin experienced a big improvement. Net income handily beat expectations, too -- a welcome change from breakeven results in the prior year.
Still, I wouldn't say it's all blue skies for JetBlue at this point. The company carries a substantial debt load, and it's just not the nimble young upstart it once promised to be. Virgin America has hit the scene, and I expect it to be an able competitor. That's the last thing JetBlue needs while it's just regaining its footing.
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