JetBlue, United, US Airways announce latest losses

A Newsday.com report from the US says that despite an increase in the number of people flying this year, more airlines, including discounter JetBlue Airways, have reported steep losses Tuesday in the latest quarter, blaming soaring fuel prices for the turbulence.

JetBlue said it lost $7 million in the second quarter, compared with profits of $21 million in the same period last year.

Among major carriers, United Airlines Tuesday posted the biggest loss – $2.73 billion. And, USAirways Group said it lost $567 million in the quarter.

JetBlue said it does not expect to grow next year and will defer acquiring some new jets.

The airline said it sees little letup in the storm clouds caused by rising fuel prices that have affected nearly every carrier in the industry, which is going through its most severe downward spiral in decades.

“Revenue gains are clearly not keeping pace with the extraordinary increase in the price of jet fuel,” JetBlue chief executive Dave Barger said in a statement before markets opened for trading.

As a result, Barger said, JetBlue, once among the highest flyers in the airline industry, will suspend its near-term growth plans beginning in September, after the busy summer travel season.

Barger said JetBlue expects its capacity – seats and planes – to be down about 10 percent year over year “and we currently do not plan to grow in 2009,” he added.

JetBlue chief financial officer Ed Barnes said in a statement, “We believe slower growth, combined with our rigorous cost control and aggressive revenue focus, will further strengthen our liquidity position, which is essential in this environment.”

JetBlue said that it will defer buying 10 Embraer 190 aircraft, the newest type plane in its fleet.  The 10 E190s had been scheduled for delivery between 2009 and 2011.  They are now set for delivery in 2014 and 2015.

JetBlue also said that effective Sept. 3, it will discontinue operations in Ontario, Calif.

But all was not totally bleak. JetBlue said operating revenues in the quarter totaled $859 million, a 17.7 percent increase over the $730 million in the second quarter of 2007.

JetBlue said it lost 3 cents a share, compared with a gain of 11 cents in the similar period last year.

But the airline beat expectations by analysts, who were expecting a loss of 7 cents in the second quarter.

Robert W. Mann Jr., an independent airline analyst and consultant in Port Washington, said JetBlue was able to beat per-share estimates because it had locked in more of its fuel costs than analysts had expected. Airlines alter their fuel hedging positions as prices change.

Mann said he expects JetBlue and other airlines to continue trimming costs, because Congress is not expected to approve any special rescue package for the industry this year.

“It’s getting late” in the Bush administration, Mann said, so airlines are pretty much stuck with the costs.”

“Every passenger who booked 3 or 4 months ago, when fuel costs weren’t as high as now, is being carried as a loss,” Mann said, adding that he was talking about all airlines, not just JetBlue.

US Airways, which has cut jobs and instituted charges for drinks and checked bags, said high fuels prices were at the heart of problems. During the second quarter, US Airways spent $1.1 billion on fuel and related costs, an increase of 65 percent, the company said.

Despite its huge loss, United Airlines parent UAL Corp. stock soared after it announced it would cut 7,000 more jobs and have more cash due to a new credit-card agreement with JPMorgan Chase & Co.

Airlines plan to cut capacity in the fall to save costs. The job reductions represent about 13 percent of UAL’s employees, and push the total to about 26,000 across the U.S. industry.

“Everybody has scheduled an emergency room visit,” Mann said. “We’re going to see if the ER docs can do their job and if the patients can last that long.”

Last week, American Airlines and Delta Air Lines, each posted losses of more than $1 billion in the second quarter. Each blamed fuel costs that have risen about 80 percent this year.

While the losses were steep, analysts said they had been expecting even worse at American and Delta. Nonetheless, most analysts said they expect matters to get worse for the industry before they get better.

The U.S Transportation Department, in its latest report, said the number of domestic and international passengers on airlines during the first four months of this year grew to 244.2 million, .04 percent higher than in the same period in 2007.

The Air Transport Association, the Washington, D.C. based organization that represents major carriers, said airlines have seen costs grow this year at the fastest pace since 1980.

A Report by The Mole from newsday.com