JetBlue Airways Corp. experienced a significant decline in its stock prices after the airline forecasted higher costs for the year, exceeding Wall Street’s expectations. In a statement released on Tuesday, JetBlue indicated that unit costs in 2025 could increase by as much as 7% excluding fuel, driven by rising expenses related to employee compensation and aircraft maintenance. As a result, JetBlue’s shares plummeted by as much as 18% at the opening of the New York markets, marking the largest drop since August 12.
This outlook poses a challenge for Chief Executive Officer Joanna Geraghty, who is attempting to revitalize the airline following two unsuccessful attempts to expand its network through partnerships with other carriers. JetBlue is focused on reducing non-fuel unit costs per seat flown per mile, a key efficiency metric, and has already cut unprofitable routes while suspending or discontinuing some services to South America and Europe as part of a comprehensive network overhaul.
Citi analyst Stephen Trent noted that while the airline appears to be achieving gains in unit revenue, the increase in costs per seat mile, excluding fuel, is outpacing revenue growth. TD Cowen analyst Tom Fitzgerald added that cost pressures, excluding fuel, are expected to peak in the first quarter before easing later in the year.
Following setbacks, including federal court rulings that blocked its acquisition of Spirit Airlines and dismantled a joint venture with American Airlines, JetBlue has refocused its services on core markets in the northeastern and southeastern United States, as well as Puerto Rico. The airline reported a fourth-quarter loss of 21 cents per share, which was better than analysts had anticipated. Revenue reached $2.28 billion, slightly surpassing Wall Street’s expectations, particularly due to stronger-than-expected winter holiday travel in international and cross-country routes. In contrast, American Airlines recently cautioned about an unexpected loss this quarter, attributed in part to rising operating costs, while competitors United Airlines and Delta Air Lines provided more optimistic forecasts.