NEW YORK—(BUSINESS WIRE)—JetBlue Airways Corporation (NASDAQ:JBLU) today reported its results for the third quarter 2016:

Operating income of $354 million in the third quarter, an increase of 1% over the third quarter of 2015.
Pre-tax income of $330 million in the third quarter, an increase of 2.6% over the third quarter of 2015.
Net income of $199 million, or $0.58 per diluted share. This compares to JetBlue’s third quarter 2015 net income of $198 million, or $0.58 per diluted share.

Financial Performance

JetBlue reported third quarter operating revenues of $1.7 billion. Revenue passenger miles for the third quarter increased 7.6% to 11.9 billion on a capacity increase of 6.3%, resulting in a third quarter load factor of 86.3%, a 1 point increase year over year.

Yield per passenger mile in the third quarter was 13.20 cents, down 5.9% compared to the third quarter of 2015. Passenger revenue per available seat mile (PRASM) for the third quarter 2016 decreased 4.7% year over year to 11.39 cents and operating revenue per available seat mile (RASM) decreased 3.5% year over year to 12.55 cents.

Compared with last year, operating expenses for the quarter increased 3%, or $42 million. Interest expense for the quarter declined 10.2%, or $4 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the third quarter decreased 3% year over year to 9.99 cents. Excluding fuel and profit sharing, third quarter CASM1 increased 3.1% to 7.53 cents.

“I would like to thank our nearly 20,000 crewmembers for going above and beyond expectations this quarter once again. They are truly JetBlue’s greatest asset and what makes our unique model so successful. I am particularly pleased with how they handled Hurricane Matthew and helped our Customers travel safely to their destination as fast as possible” said Robin Hayes, JetBlue’s President and CEO.

Fuel Expense and Hedging

In the third quarter JetBlue had hedges in place for approximately 24% of its fuel consumption. The realized fuel price in the quarter was $1.48 per gallon, a 20% decrease versus third quarter 2015 realized fuel price of $1.85.

JetBlue has hedged approximately 25% of its fourth quarter 2016 projected fuel consumption using jet fuel swaps. Based on the fuel curve as of October 14th, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.63 in the fourth quarter.

Liquidity and Cash Flow

JetBlue ended the quarter with $1.5 billion in unrestricted cash and short term investments, or about 22% of trailing twelve month revenue. In addition, JetBlue maintains approximately $600 million in undrawn lines of credit.

During the third quarter, JetBlue repaid $61 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $306 million in regularly scheduled debt and capital lease obligations and plans to buy out the leases on at least four A320 aircraft during the fourth quarter.

“I am honored to have been part of the JetBlue family for over 10 years and proud to have worked alongside our crewmembers who are among the best I’ve seen during my years in the airline industry. JetBlue is financially strong, its leadership bench deep and its future bright” said Mark Powers, JetBlue’s Chief Financial Officer.

Fourth Quarter and Full Year Outlook

For the fourth quarter of 2016, year over year CASM excluding fuel and profit sharing is expected to grow between 4.5% and 6.5%, including a negative impact from hurricane Matthew of approximately half a point. For the full year 2016, JetBlue expects year over year CASM excluding fuel and profit sharing to grow between 0.0% and 1.5%, consistent with prior guidance.

In the fourth quarter 2016, capacity is expected to increase between 3.0% and 5.0%, including a negative impact from hurricane Matthew of approximately half a point. For the full year 2016, JetBlue expects capacity to increase between 8.5% and 9.0%.

JetBlue will conduct a conference call to discuss its quarterly earnings today, October 25, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.