JetBlue forecasts improved second-quarter revenue on healthy travel demand

(Reuters) – JetBlue Airways on Monday forecast a smaller drop in second-quarter revenue than it had previously forecast due to healthy travel demand, sending its shares up 2.3% in premarket trading.

Major U.S. carriers expect record passenger numbers for the summer season but uneven demand on certain routes has led to overcapacity and is hurting pricing power for a few airlines.

JetBlue now expects its second-quarter revenue to fall between 6.5% and 9.5%, compared with its previous forecast of a 6.5% to 10.5% decrease.

“Better operational performance is driving solid cost execution in the second quarter, and is further supported by recent trends in jet fuel prices, which have declined over the quarter,” the airline said in a regulatory filing.

The New York-based carrier has been grappling with higher operating costs as ongoing inspections of Pratt & Whitney’s Geared Turbofan (GTF) engines have led to the grounding of several of its aircraft.

JetBlue had cut some of its routes and markets that were unprofitable and moved resources to better-performing regions.

The airline also lowered its fuel cost forecast on Monday and now expects to spend $2.85 to $2.95 per gallon. It earlier forecast fuel expenditure in the range of $2.98 to $3.13 per gallon.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Shilpi Majumdar)