After an Omicron dip at the start of 2022, US airline JetBlue (JBLU) expects to return to profitability in the spring and anticipates a “very robust” summer peak period.
The arrival of the Omicron variation of COVID-19 has slowed JetBlue’s (JBLU) recovery, as it did for other airlines reporting financial results this week, notably Wizz and easyJet in Europe.
The rise in cases of the Omicron type was particularly problematic in the northeast of the United States, according to JetBlue (JBLU), resulting in booking cancellations and a reluctance to make new bookings during a season when many are generally made.
The low-cost carrier, like its North American competitors, had to cancel flights due to the illness, which caused additional staff members to call in sick.
“While Omicron has temporarily weighed on demand in the very near-term, we expect sequential month-on-month improvement through the quarter, ultimately returning to sustained profitability in the spring and beyond,” Robin Hayes, JetBlue’s (JBLU) chief executive officer, said in a statement on January 27, 2022.
JetBlue (JBLU) reported a 9.7% drop in sales and a GAAP pre-tax loss of $163 million in the fourth quarter of 2021, compared to a pre-tax profit of $220 million in the fourth quarter of 2019.
JetBlue (JBLU) would expect better revenue in the first quarter of 2022 than in the first quarter of 2019, according to Hayes, if it weren’t for Omicron. Instead, it expects sales to drop 11-16 percent in the first quarter compared to pre-pandemic levels.
“This sequential slowdown reflects the large negative impact from Omicron on Q1 demand,” Joanna Geraghty, President and Chief Operating Officer, explained. “However, trends have largely stabilized and are improving across all geographies.
We are seeing cases fall as quickly as the Omicron variant spread through the Northeast, and we predict sequential month-on-month recovery leading to a profitable Q2 and a very robust summer peak.
JetBlue (JBLU) expects capacity to be between -1 and +2% below pre-crisis levels in the first quarter. It aims to grow capacity by 11-15 percent in 2022 compared to 2019, however Geraghty noted this is still subject to change.
“We expect the demand recovery to regain steam following the temporary setback tied to the Omicron variant. We’ll continue to be nimble and react to the environment,” Geraghty concluded.