Just two months after JetBlue’s Vice President of Corporate Communications Todd Burke said the company could withstand the pressure of high fuel costs, the five-year-old low cost carrier reported that profits nose-dived more than 50 per cent.
During the third quarter, quarterly income stood at $2.7 million, down from the $8.1 million earned for the same period the year before.
This reflects a drop in share price of 2 per cent from the 7 cents it earned for the third quarter of 2004. According to an Associated Press (AP) report, analysts were expecting JetBlue to post a loss of around 1 cent per share.
Despite the bleak profits, operating revenue skyrocketed 40 per cent over the previous year, and stood at $453 million for the current quarter.
The AP report said this was better than analysts’ predictions of $451.6 million.
In an earlier interview with the Nassau Guardian, Mr Burke said that the company’s business model was designed to thrash out tough times like this.
But even the strongest of companies are now seeing that profits could have a hard climb over steep gas prices.
The airline has hedged up to 20 per cent of its oil which analysts argue gets more expensive as the price of a barrel of oil creeps upwards.
An active hurricane season has affected and could continue to have a negative effect on oil prices.
By: BARRY WILLIAMS, The Nassau Guardian
