The Long Island City, NY-based carrier, JetBlue Airways CorporationJBLU posted a significant rise in air traffic for the month of Jan 2017. Traffic - measured in revenue passenger miles (RPMs) - came in at 3.86 billion, up 8.6% year over year.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) expanded 7.7% to 4.64 billion. Load factor or percentage of seats filled by passengers increased 70 basis points to 83.3% in the month. Load factor increased as traffic growth outpaced capacity expansion in January. The low-cost carrier registered a completion factor (system wide) of 97.9% for the month with 72.8% flights on schedule.
Operating revenue per available seat mile (RASM: a key measure of unit revenues) decreased approximately 8.5 % on a year-over-year basis. Holiday placement hurt the metric to the tune of approximately five points. Also, winter storm Jonas contributed to the significant decline in RASM for the month. JetBlue had anticipated the decline in the metric and consequently predicted a decline in RASM in the band of 8-9% in January, while releasing its fourth-quarter results last month.
JetBlue Airways shares displayed significant pricing weaknesses in the last one month, mainly due to the lackluster RASM guidance for January. With the prediction coming true, shares do not seem to be in for a respite. In the last one month, the company's shares declined 9%, while the Zacks categorized Transportation- Airline industry gained 1.2%.
Zacks Rank & Key Picks
JetBlue Airways carries a Zacks Rank #3 (Hold). Investors interested in the airline space may consider stocks like Alaska Air Group ALK , Copa Holdings CPA and Delta Air Lines DAL . All three stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .
Copa Holdings has a solid history with respect to earnings per share, having outshined the Zacks Consensus Estimate in each of the last four quarters by an average of 38.6%.
Alaska Air Group too has reported better-than-expected earnings in each of the last four quarters with an average beat of 5.5%. The average earnings suprise at Delta Air Lines over the last four quarters was 2.22%. This Atlanta-GA based airline behemoth has outpaced the Zacks Consensus Estimate for earnings in three of the last four quarters.
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