JetBlue’s fourth-quarter profit jumped sharply on higher fares, but January storms will hurt first-quarter results, at a time when the company is facing rising costs for pilots.
The airline said Wednesday that this month’s storms in the Northeast reduced first-quarter revenue by about $45 million, and operating income by $30 million. The storms led JetBlue to cancel about 1,800 flights and briefly suspend operations at four airports in New York and Boston.
Company executives partly blamed new federal rules limiting working hours and requiring more rest for pilots. On a conference call with analysts, executives said Wednesday that the new rules will require JetBlue to hire about 5 percent more pilots.
JetBlue also expects to spend $145 million, over the next three years, to raise pilots’ pay by 20 percent, the largest piece in rising non-fuel costs for the airline. The airline has about 2,500 pilots; unlike peers at bigger airlines, they are not represented by a union.
Net income in the fourth quarter was $47 million, or 14 cents per share, compared with $1 million, or less than a penny per share, a year earlier.
Revenue rose 14.4 percent to $1.37 billion, while operating expenses rose 8.7 percent.
Analysts expected the airline to earn 13 cents per share on revenue of $1.34 billion, according to a survey by FactSet.
Bigger airlines, including American, United, Delta and Southwest have all reported better-than-expected fourth-quarter earnings as they pushed ticket prices higher. The average fare on JetBlue rose 8.9 percent to $168.94 each way — an increase of nearly $14 — and passenger traffic grew 7.1 percent.
That increase in flying wasn’t enough to offset the airline’s aggressive expansion, however, and the average flight was slightly less full than in the same period of 2012.
JetBlue’s president, Robin Hayes, said that the revenue outlook for the first quarter appeared strong, particularly in New York, Fort Lauderdale, Fla., the Caribbean and Latin America.
Hayes said that JetBlue is also bidding for takeoff and landing slots that American Airlines is giving up at Washington’s Reagan National Airport. The carrier had tried to get slots at New York’s LaGuardia Airport, but those went to Southwest and Virgin America, Hayes said.
American agreed last year to give up slots at those crowded airports in exchange for the U.S. Justice Department dropping its opposition to American’s merger with US Airways.