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JetBlue Airways (JBLU+3.44%) shares sank about 20% Tuesday morning after warning of rising costs that could weigh on its 2025 performance.
The New York-based carrier said in its fourth-quarter earnings report Tuesday that it expects cost per available seat mile — how much it costs the airline to operate one seat for every mile of a flight — excluding fuel to rise between 5% and 7% on an annual basis this year.
Meanwhile, it projects revenue per available seat mile — how much the airline makes for every seat per mile — to grow between 3% and 6% for the year. For the first quarter of 2025, JetBlue estimated revenue could come in anywhere from 0.5% lower to 3.5% higher from a year ago.
“We expect to reach positive operating margin in 2025 by building on the progress we made in 2024, delivering on our revenue and reliability initiatives as part of JetForward, and continuing our cost control efforts,” said Ursula Hurley, JetBlue’s chief financial officer, in a statement.
JetBlue’s shares traded at $6.40 as of mid-morning Tuesday, bringing the company’s market capitalization to $2.2 billion.
Since the failure of its attempted merger with now-bankrupt Spirit Airlines, JetBlue has embarked on efforts to turn around its business, including cutting some routes and offering more high-end options for flyers.
Earlier this month, JetBlue became the first-ever airline to be penalized for frequent runway tardiness, agreeing to pay the Department of Transportation $2 million as punishment.
“Looking ahead to 2025, we are laser-focused on executing JetForward and building on the momentum from 2024,” said Joanna Geraghty, JetBlue’s chief executive officer. “While this year will not come without its challenges, our strategy is in place to tackle those obstacles head-on. With a healthy revenue backdrop, continued cost control and incremental earnings from JetForward, we believe we are well-positioned to deliver on our goal of achieving a positive operating margin for the full year.”
The company had a fourth-quarter net loss of $44 million, and a 5.1% year-over-year decline in capacity.