JetBlue Posts Loss on Higher Fuel Costs

JetBlue Airways Corp. on Wednesday posted a wider fourth-quarter loss than Wall Street expected as increased revenue could not offset the effect of sharply higher fuel costs. The airline also forecast losses for the first quarter and all of 2006.

The weak results and outlook sent shares tumbling. Its shares shed $1.86, or 14%, to $11.18.

JetBlue’s fourth-quarter loss was $42.4 million, or 25 cents a share, reversing a year-earlier profit of $1.5 million, or a penny a share.

The results include $6.9 million in stock-compensation costs and a $6.1-million charge for development costs related to a discarded maintenance and inventory tracking system.

Excluding those items, the loss would have been $32 million, or 19 cents a share. Analysts had predicted a loss of 14 cents a share, according to Thomson Financial.

Revenue at the Forest Hills, N.Y.-based company jumped 34% to $446 million from $332.8 million a year earlier.

“We are very disappointed in our performance this quarter as we continued to feel the effects of record-high fuel prices and a tough revenue environment, compounded by the impact of Hurricane Wilma and the residual effects of hurricanes Katrina and Rita,” JetBlue Chief Executive David Neeleman said.

The company paid 50% more for jet fuel during the quarter.

Earlier last month, low-cost rival Southwest Airlines Co. reported that its fourth-quarter profit surged 54% to $86 million, or 10 cents a share. Southwest reaped the benefits of options that locked in prices on most of its jet fuel needs through 2009, softening the blow of higher fuel costs.

As a result of that hedging, Southwest paid about $1.20 a gallon instead of the full price, about $2 a gallon, for fuel in the fourth quarter -- far less than what JetBlue spent.

“It would be nice to have hedges like Southwest,” said Neeleman in a conference call Wednesday. “But frankly we don’t. So we need to see what we can do to get fares up a little bit.”

Neeleman suggested that the company needed to increase its average fare $5 to $10 to help recoup higher fuel costs and return the airline to profitability.