JetBlue Airways NASDAQ: JBLU said third-quarter revenue outperformed its initial expectations as resilient demand and higher fares helped the carrier recapture more of its rising fuel costs. The company reported a year-over-year increase in revenue per available seat mile, or RASM, of 18.4%, and management forecast further acceleration in the fourth quarter.
Chief Executive Officer Joanna Geraghty said the airline achieved 87% fuel-cost recapture during the third quarter, above its initial expectation of 70% to 80%. While elevated fuel prices and a difficult summer operating environment weighed on results, JetBlue said it expanded adjusted operating margins year over year during the quarter and expects one to two percentage points of additional margin expansion in the fourth quarter.
“Our revenue initiatives are delivering, we are beginning to expand margins year over year, and the benefits of JetForward are compounding,” Geraghty said, referring to the company’s strategic plan. JetBlue reiterated its objective of reaching sustained operating profitability in 2027 and generating positive free cash flow and at least $1 in earnings per share in 2028.
Revenue momentum extends into fourth quarter
President Marty St. George said third-quarter RASM growth was roughly four percentage points above the midpoint of JetBlue’s original guidance. Higher yields, supported in part by investments in revenue-management technology, accounted for most of the outperformance, he said.
JetBlue said demand remained broad-based across peak and off-peak periods, and management reported no meaningful sign of fare elasticity despite higher prices. Both premium products and Mint posted double-digit RASM growth, while St. George called performance in the airline’s core economy cabin particularly encouraging.
The carrier expects fourth-quarter RASM to rise 18% to 22% from a year earlier, which would mark its fifth consecutive quarter of increasing year-over-year RASM growth. For the full year, JetBlue now expects RASM growth of 13.5% to 14.5%.
St. George said the strength of travel during September was a notable surprise. JetBlue’s average fare in September exceeded its average fare in July, an outcome he said had “never happened in the history of JetBlue.” The company said it had also reduced some fourth-quarter capacity that it viewed as less accretive under the current fuel environment.
JetBlue expects fourth-quarter capacity growth of 3% to 4% year over year and full-year growth of 1.5% to 6.5%. Growth is concentrated in Fort Lauderdale, while capacity in the rest of the network is flat to lower, according to management.
Fort Lauderdale expansion and BlueFirst rollout
Fort Lauderdale remained a major source of growth. JetBlue reported nearly 15% year-over-year RASM growth in the market during the third quarter despite capacity increasing more than 65%. The airline expects peak daily departures from Fort Lauderdale to exceed 150 this winter, up 39% from a year earlier, following the addition of 15 destinations and increased frequencies on other routes.
JetBlue expects its Fort Lauderdale seat share to reach about 37% in the fourth quarter, up 14 percentage points from the prior year. The carrier also launched service to two Colombian destinations, bringing its Fort Lauderdale international network to 18 destinations.
Management said the third quarter likely represented the peak year-over-year capacity growth rate in Fort Lauderdale. As growth moderates and new routes mature, JetBlue expects the market to support additional unit-revenue expansion.
The company’s new domestic first-class product, BlueFirst, is now on sale on more than 30 routes and will begin service Dec. 8 between Boston and Fort Lauderdale. JetBlue said about 35% of early BlueFirst bookings are award redemptions, while Mosaic members account for nearly one-quarter of booked seats. St. George said the early booking mix indicates that existing customers are adopting the product.
JetBlue expects BlueFirst to contribute nearly five points of RASM improvement at full run rate, with revenue and margin benefits building through 2028 and beyond. The majority of the fleet is expected to be reconfigured by the end of 2027, though full installation will extend into 2028 because of supply-chain constraints, management said.
Loyalty, Paisly and cost outlook
Loyalty revenue rose 20% during the quarter, its highest growth rate since 2023, JetBlue said. Premier Card acquisitions increased eightfold year over year, while co-brand acquisitions in Broward County increased 55%. The company also said TrueBlue redemptions on United flights under its Blue Sky collaboration have exceeded 1.1 billion points since the benefit launched in February.
Paisly, JetBlue’s travel-products platform, delivered its strongest financial result to date in the third quarter. Management said Paisly is on pace to produce nearly $100 million of operating income in 2026, with that contribution expected to nearly double by 2028 through the maturation of JetBlue offerings and planned products with United.
On costs, Chief Financial Officer Ursula Hurley said third-quarter cost per available seat mile excluding fuel, or CASM ex-fuel, increased 7% year over year, including roughly four points of pressure from summer operating disruptions. The company expects fourth-quarter CASM ex-fuel to range from down 1% to up 1% year over year and forecasts full-year growth of 3.5% to 4.5%.
JetBlue’s third-quarter fuel price was $3.91 per gallon, up 57% year over year. The company expects fourth-quarter fuel prices of approximately $4.64 per gallon, or 85% above the prior-year period. It now forecasts a full-year adjusted operating margin loss of 4.5% to 6.5%, with the revision primarily reflecting fuel costs that created 3.5 percentage points of pressure versus its July outlook.
Liquidity and financing plans
JetBlue ended the quarter with $2.2 billion of liquidity, including a $600 million undrawn credit facility, and approximately $7 billion in unencumbered assets. That total includes $2.8 billion in unencumbered aircraft and engines.
The company provided notice to draw an additional $250 million under an aircraft-backed financing accordion in the fourth quarter. Hurley said JetBlue is focused on aircraft financing in the near term but has other potential liquidity sources, including opportunities related to Paisly, venture investments and its co-brand card program.
Third-quarter capital expenditures totaled $189 million, below the company’s earlier outlook because an aircraft delivery and LaGuardia slot payments shifted into the fourth quarter. JetBlue maintained its full-year capital-expenditure forecast of about $850 million and said it expects annual capital spending to remain below $1 billion through the end of the decade.
About JetBlue Airways (NASDAQ:JBLU)
JetBlue Airways Corporation is a U.S.-based passenger airline that provides scheduled air transportation to destinations across the United States, the Caribbean, Latin America and select locations in Europe. The company operates primarily from focus cities including New York, Boston, Fort Lauderdale, Orlando and Los Angeles, with a network designed to connect major metropolitan areas and leisure destinations.
JetBlue offers multiple classes and service options, including standard economy seating, extra-legroom EvenMore seats and its premium Mint service on select routes.
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