JetBlue bucks the trend, remains profitable

LONGVIEW, Wash. (Dow Jones/AP) — While major U.S. airlines suffer, discount carrier JetBlue Airways Corp. posted a profitable first quarter Thursday and talked about plans to add flights and capacity throughout the year.

The New York-based carrier defied a weak domestic fare environment, high fuel prices, bad weather and the Iraq war in the first quarter to post earnings that beat Wall Street expectations.

On a conference call with analysts, CEO and Utah native David Neeleman said the carrier will continue to add flight frequencies in its current markets. It also plans to add one more new city this year to the two it has already announced, Atlanta and San Diego. Neeleman did not say what new city JetBlue plans to add.

The CEO said he is "very pleased" so far with the results he is seeing on JetBlue's new San Diego schedule, and he's looking forward to seeing results from the upcoming Atlanta service.

"We have a long list of markets we'd like to serve, and because of changes in the market, we can't get to our list as quickly as we hoped," Neeleman said.

Earlier Thursday, JetBlue reported net income of $17.35 million, or 25 cents a share, on revenue of $217.1 million. That compares with net income of $13 million, or 23 cents per diluted share, on revenue of $133.4 million in the prior first quarter.

The discount airline beat the expectations of analysts surveyed by Thomson Financial First Call, who had forecast, on average, 22 cents a share.

Enabling JetBlue to add to its flight capacity will be 65 new A320 aircraft the company ordered from Airbus on Thursday. JetBlue also announced an option for 50 more Airbus planes. The deliveries will run through 2011. JetBlue flies only Airbus A320 planes.

Neeleman told analysts it may seem odd to order aircraft in a down market, but doing so ensures timely deliveries when the market recovers.

He declined to comment on the price paid for the aircraft, but he said adding all JetBlue's current and future planes together makes the airline Airbus' largest A320 customer.

"We deserve to have a good price, and Airbus was cooperative," Neeleman said.

JetBlue faces increasing competition in the discount market from Song, the new discount service operated by Delta Air Lines.

Neeleman told analysts that JetBlue already faced competition from Delta using 757s in the Florida market in the first quarter and performed well.

"Our results in the first quarter reflect that we were able to take that additional capacity," Neeleman said.

JetBlue has expanded its own capacity to Florida and runs 42 flights daily from New York's JFK International Airport to the state. JetBlue is evaluating its flight levels in that market.

Shares in JetBlue rose $1.27, or 4.2 percent, to close Thursday at $31.44 on the Nasdaq Stock Market.