JetBlue (JBLU) April Traffic Improves, RASM Declines 12.5%

Low-cost carrier JetBlue Airways Corp. (NASDAQ:JBLU) witnessed an improvement in air traffic in the month of April this year. Traffic – measured in revenue passenger miles (RPMs) – was 3.76 billion, up 8.6% from 3.46 billion recorded a year ago. On a year-over-year basis, consolidated capacity or available seat miles (ASMs) soared 10.8% to 4.47 billion.

However, the load factor or percentage of seats filled by passengers decreased to 84.1% from 85.7% in Apr 2015. JetBlue’s preliminary revenue per available seat mile (RASM) in the month dropped roughly 12.5% on a year-over-year basis.

For the first four months of 2016, JetBlue generated RPMs of 14.77 billion (up 12.6% year over year) and ASMs of 17.5 billion (up 13.2%). However, the load factor declined 4 basis points to 84.2%.

J.D. Power and Associates, a global marketing services firm, has released its annual North American Airline Satisfaction Study wherein JetBlue has been ranked the best low-cost carrier for the 11th consecutive year. Meanwhile, its rival, Alaska Airlines Group, Inc. (NYSE:ALK) emerged as the top traditional airliner for the ninth consecutive year.

Recently, JetBlue has announced its plans to expand the premium “Mint” service. The transcontinental service will add destinations along the West Coast, including Los Angeles, San Francisco, San Diego and Seattle. JetBlue’s Mint service is highly popular and has been garnering incremental revenues. We remind investors that the company has lost the $4 billion Virgin America Inc. (NASDAQ:VA) deal, inclusive of debt and capitalized aircraft operating leases, to Alaska Air Group.

The company’s focus on route expansion in order to improve operations in its service areas by driving passenger count and boosting ancillary revenues bode well. Meanwhile, to enhance its network, the carrier plans to flag off an average of 140 daily flights from Fort Lauderdale-Hollywood International Airport (FLL).

We believe that the launch of these services, along with its latest request for 12 daily flight slots to Havana, will drive this Zacks Rank #3 (Hold) company’s revenues, going forward. A better ranked stock in the same category is Air France-KLM SA (OTC:AFLYY) .