JetBlue has today published its results for the final quarter of 2020, as well as the headline figures for the entire year. Overall, the airline lost more than $1.3 billion over the course of the year, but there were some bright spots in the report. Daily cash burn has reduced significantly, now down to under $7 million a day, and cost-cutting coupled with cash-raising has seen the airline finish the year with more than $3 billion in the bank.
JetBlue’s billion-dollar year
JetBlue’s fourth quarter and full-year 2020 results are out, and they make for fairly painful reading. Overall, the airline posted a pre-tax loss of $512 million on the quarter and a total loss across the year of $1.36 billion. That’s in stark contrast to the $569 million profit that it made in 2019.
Revenue for the airline declined by 67% year on year in Q4, 2020, due to the ongoing impacts of COVID-19. Although this was still a disappointing result, JetBlue noted that it was actually better than its forecasted expectations of revenue being down 70%. The airline said that quarter over quarter, its revenue had steadily increased over the year, thanks in part to some good demand in October and better volumes in the second half of December.
Year over year, capacity of aircraft flying in Q4 was down 47%, which was about what JetBlue was expecting to fly. The airline achieved a reduction in operating expenses of 38% year on year, driven by not only less flying but also a form push towards improvements in operations and management of external spending.
The airline finished 2020 with around $3.1 billion in the bank, and despite the challenging operational environment, said it had managed to repay $100 million in lease and finance obligations during the quarter. In order to manage its liquidity going forward, JetBlue raised more than $700 million through sale and leaseback as well as equity offerings and drove down its spending with an aggressive cost reduction plan.
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A year like no other
CEO of JetBlue, Robin Hayes, remains ‘cautiously optimistic’ about the rest of 2021 and said he was proud of what his team achieved in 2020. Stating that he ‘could not be more confident in our future,’ he commented,
“2020 was a year like no other, as the COVID-19 pandemic challenged our industry in ways we have never seen before. The very foundation of our business model – our culture, our passion for customer service, and our focus on safety – continue to guide us as we march towards recovery.
“As we moved through 2020, we meaningfully reduced our cash burn, and are starting to shift our focus to rebuilding our margins. We remain cautiously optimistic that demand trends will improve later this year. More importantly, this crisis has made us a more agile, creative and resilient airline, and we believe our initiatives will allow us to emerge with structurally better margins.”
JetBlue’s cost-cutting activities had allowed it to achieve better than expected reductions in cash burn. In the fourth quarter, its average daily cash burn reduced to $6.7 million a day, which was at the lower end of its projected $6 to $8 million daily burn rate. The airline’s filing stated that starting this month, it would no longer report daily cash burn but would rather return to the more traditional metric of EBITDA. Steve Priest, JetBlue’s Chief Financial Officer, commented,
“We estimate our EBITDA in the first quarter will range between negative $525 and $625 million, reflecting similar revenue trends to the fourth quarter, but also manifesting recent cost pressure from rents and landing fees, as well as fuel prices.”
President Joanna Geraghty further noted that, for the first quarter of 2021, the airline expected to see a revenue decline of between 65 and 70% compared to 2019. Nevertheless, she remains confident that the impetus to travel is there and says the airline is working to help its guests navigate the ever-changing rules and requirements more easily.