(Bloomberg) -- JetBlue Airways Corp. shares soared after the carrier boosted its forecast for fourth-quarter results, citing higher-than-expected bookings in November and December as well as lower costs tied in part to falling fuel prices.
The airline now expects revenue in the three months ending December to be 2% to 5% lower than in the same period last year, compared with the previous estimate of a 3% to 7% drop, the carrier said in a regulatory filing Wednesday. JetBlue cited a faster bounce back in sales following the presidential election and bookings for December travel that both exceeded prior estimates.
JetBlue’s stock jumped as much as 14% at 9:59 a.m. in New York. Shares of other carriers including Frontier Group Holdings Inc., Southwest Airlines Co. and United Airlines Holdings Inc. also rose.
The improved outlook suggests initiatives by new Chief Executive Officer Joanna Geraghty to overhaul the airline may be gaining traction. Lower fuel prices and the benefits of improved flight operations over the Thanksgiving holiday imply a fourth-quarter loss of 12 cents to 30 cents a share, according to Savanthi Syth, a Raymond James analyst. That compares with a 41-cent average loss from analyst estimates compiled by Bloomberg.
JetBlue has said it will pull back to core markets in the northeast and southeast US and Puerto Rico to reduce expenses and boost sales in the wake of a failed expansion. The carrier was dealt back-to-back setbacks when federal courts blocked its planned acquisition of Spirit Airlines Inc. and broke up a joint venture with American Airlines Group Inc.
The updated guidance “certainly reflects a tilt in the right direction, with both revenue and cost trends going in the right direction,” Stephen Trent, a Citi analyst, said in a report.
Revenue for the full year will be down as much as 4.5% from 2023, JetBlue said, compared with a prior forecast for a decline of as much as 5%.
Non-fuel unit costs for the fourth quarter will increase 12.5% to 14.5% year over year, compared with an earlier outlook for a jump of as much as 15%, JetBlue said. The carrier also expects average jet fuel prices below its earlier forecasts for the current quarter and the full year.
--With assistance from Siddharth Philip.
(Updates with share move, analyst commentary from first paragraph,)
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