JetBlue Airways
stock was flying higher Thursday after the low-cost carrier hiked its current quarter guidance on strong holiday travel demand.
It seems things aren’t nearly as bad as investors, or JetBlue itself, initially feared. The airline’s original guidance, issued on Halloween along with its third-quarter earnings, gave investors a serious fright. The stock had plunged more than 10% in response, touching a 12-year low at one point.
The stock has recovered since then, and the improved forecast announced Thursday is keeping the momentum going. JetBlue stock surged 13% in early trading Thursday; the shares have now climbed 45% from its 2023 low hit on Nov. 1.
The company now expects revenue to decline between 4% and 7% in the fourth quarter from the year-ago period. It had previously forecast a steeper drop of between 6.5% and 10.5%. Full-year revenue will now rise between 4% and 5%, up from a previous 3% to 5% outlook.
JetBlue still sees an adjusted loss in the current quarter, but a narrower one of 25 to 35 cents, an improvement on its initial 35 cents to 55 cents forecast.
Other airline stocks were lifted early Thursday.
Southwest Airlines
jumped 5.1%,
American Airlines
rose 3.6%,
Delta Air Lines
was up 3.4%, and
United Airlines
rose 1.5%.
“Demand for travel remains healthy. Since late October, close-in bookings have outperformed expectations for both holiday peak and non-holiday travel periods,” the company said in a filing.
Strong holiday demand isn’t much of a surprise—the Sunday after Thanksgiving was the busiest day in the U.S. aviation history. But JetBlue flagging better-than-expected non-holiday demand is more significant.
During earnings season, airlines noted an emerging trend of stronger-than-normal demand in peak periods and weaker nonpeak periods. If the latter doesn’t materialize, or isn’t as weak as feared, that will be a boon for the sector.
With the holiday travel season set to ramp up again later in the month, the picture is beginning to improve for airlines, after months of downward pressure.
Write to Callum Keown at callum.keown@barrons.com
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