JetBlue Airways said it returned to profitability in the second quarter and report an operating margin of 10.1%, its highest operating margin since the third quarter of 2007.

Published: 23 Jul 2010

JetBlue Airways said it returned to profitability in the second quarter and report an operating margin of 10.1%, its highest operating margin since the third quarter of 2007.

The airline reported net income of $30 million. That’s $10 million better than a year ago.

The airline posted record operating income of $94 million, compared with $76 million in the second quarter of 2009. It delivered a 9.4% operating margin for the same period last year.

JetBlue ended the second quarter with approximately $1.0 billion in unrestricted cash and short term investments, essentially unchanged from the end of the first quarter, said Dave Barger, JetBlue's CEO.

Revenue Environment

The airline mentioned that it is being encouraged by the strengthening revenue environment as it continues to develop additional revenue streams with Sabre.

“The Sabre platform is allowing us to better scale our business including more seamless integration with airline partners and better connectivity to global distribution systems. While we began to realise some benefits of this more robust system back in February, we continue to see even more revenue growth as we add functionality to the Sabre platform,” said Barger. He shared this during Q2 2010 Earnings Call (transcript on Seeking Alpha).

Citing an example, he said, “We recently added several classes to our fare structure, enhancing our pricing and revenue management capabilities. In addition to improved revenue management capabilities, Sabre has enabled us to expand our ancillary revenue initiatives as well.”

He also referred to the pricing structure of the airline’s Even More Legroom or EML product. “Now we’re able to offer 11 price points for EML based on customer demand on a particular route rather than length of haul,” said Barger. “This initiative is on track to generate an incremental $10 million in the second half of this year. Improving economic conditions are clearly having a positive impact on demand for air travel, its total revenues were up 16.4% versus last year and unit revenues for the quarter were up 10.4%.”