JetBlue (JBLU) crashes to $4.50 a share

JetBlue Airways Corporation (NASDAQ:JBLU) fell 8% today after reporting losing $8 million in Q1 2008 which is an improvement from the loss of $22 million a year earlier. Gotta love the airline business and the price of jet fuel, go JetBlue.

Let's review the numbers: 

Revenue rose to $816 million from $608 million in the first quarter of 2007, a 34%increase. Analysts polled by Thomson Financial had expected a loss of 7 cents a share on revenue of $786 million.

JetBlue said unit revenue would increase by 8 to 10% in the second quarter, while unit costs will jump by 22 to 24%. 

JetBlue's unit costs - or what it pays to fly one seat one mile - rose 12.8 percent in the first quarter compared to last year, more than the company forecast earlier in the year. But excluding fuel expenses, unit costs fell by 0.2 percent. Unit revenue rose by 16.5 percent.

For 2008 as a whole, the company expects unit revenue to grow between 12 percent and 14 percent, while unit costs will grow between 20 percent and 22 percent.

JetBlue will now charge passengers $20 to check a second bag, following the lead of many other airlines which have imposed new bag-check fees. Last month, JetBlue said it would charge passengers an extra $10 to $20 for additional legroom in certain rows of each plane.

Every airline right now is facing a tough battle with operating costs thanks to jet fuel. Jet fuel prices pushed past a new record in the past week, hitting $3.685 a gallon in New York and soaring on other world markets as air carriers moved to hike fuel surcharges again.

Prices in New York ended the second week at $3.647 a gallon after slipping back slightly from the all-time high, but that still meant jet fuel prices have grown by nearly $1 a gallon since the start of 2008. The New York price last week was just short of $2 a gallon higher than jet fuel cost at the start of 2007, less than 16 months ago.

Fellow Masters, we could be at a bottom for JBLU shares today but until the airline consolidation battle plays out, we are staying clear of all airline stocks.

Happy Trading.

SOURCE: Forbes.com