(Reuters) – JetBlue Airways Inc said on Monday it expected a smaller decline in second-quarter revenue than previously expected due to strong travel demand, sending its shares up 2.3 percent in premarket trading.
Major U.S. airlines are expecting record passenger numbers this summer, but demand imbalances have created overcapacity on some routes and hurt some airlines' pricing power.
JetBlue now expects second-quarter revenue to fall 6.5% to 9.5%, down from a previous forecast of a decline of 6.5% to 10.5%.
“Improved operational performance in the second quarter drove strong cost execution, supported by recent trends in jet fuel prices which declined throughout the quarter,” the airline said in a regulatory filing.
The New York-based airline has been struggling with rising operating costs after ongoing inspections of Pratt & Whitney geared turbofan (GTF) engines led to the grounding of several aircraft.
JetBlue has scaled back some of its unprofitable routes and markets and shifted resources to better-performing areas.
The airline also lowered its fuel cost forecast on Monday, now expecting to spend $2.85 to $2.95 a gallon. The airline had previously forecast fuel costs in the range of $2.98 to $3.13 a gallon.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Shilpi Majumdar)
