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JetBlue Airways shares surged nearly 19% in early trading Tuesday after the New York carrier offered an outlook that helped calm investors. The rebound followed a fall to a new low Monday as concerns mounted over the airline’s sustained losses and financial health.

The carrier reported a net loss of $257 million for the three months ended Sept. 30, widening from a $143 million loss one year earlier. Its fuel bill climbed 61% to $868 million, adding pressure to an airline already working through a multiyear turnaround plan.

Still, JetBlue said resilient travel demand and higher fares helped offset some of the increased fuel expense. Average fares rose more than 19% to $245.11 during the third quarter, compared with $205.67 in the year earlier period.

“Resilient demand and strong yields drove revenue well ahead of our initial expectations, allowing us to recapture more of the increase in fuel costs than we initially expected,” CEO Joanna Geraghty said in an earnings release. “That momentum has carried into the fourth quarter, and Fort Lauderdale continues to deliver exceptional results even as we significantly grow capacity.”

JetBlue projected that revenue per available seat mile could rise as much as 22% in the fourth quarter. The closely watched measure tracks how much operating revenue an airline generates for every seat flown one mile.

For the full year, JetBlue expects revenue per available seat mile to increase between 13.5% and 14.5%. That outlook, combined with the carrier’s comments about demand, offered investors some encouragement despite the larger quarterly loss.

The company ended the quarter with $2.2 billion in liquidity, according to its report. JetBlue also said its unencumbered asset base had reached $7 billion, including $2.8 billion in aircraft and engines.

Debt remains substantial. JetBlue reported total debt of $8.4 billion as of Sept. 30 in its earnings filing Monday, leaving investors focused on whether the carrier can control costs and return to sustained profitability.

JetBlue executives were scheduled to hold an earnings call Tuesday at 10 a.m. ET. Analysts were expected to question management about the airline’s long term health and its continued losses.

A group of JetBlue’s senior creditors is reportedly working with restructuring adviser PJT Partners, according to a Friday report from The Wall Street Journal. The report added another layer of scrutiny before the company released its quarterly results and outlook.

On an adjusted basis, JetBlue recorded a loss of 60 cents per share, compared with a loss of 55 cents expected by Wall Street analysts surveyed by LSEG. Revenue reached $2.81 billion, narrowly below the $2.82 billion estimate.

JetBlue last recorded an annual profit in 2019. Its current turnaround plan seeks to reduce costs while increasing revenue through investments in premium seating, including a new domestic first class section that recently went on sale.

Fuel expenses have weighed on profits across the airline industry, and JetBlue has not escaped that pressure. Even so, the carrier said travel demand remained strong despite fares that have risen more than 20% this year.

The airline has also faced competition from larger rivals. Its attempt to acquire the now defunct Spirit Airlines was blocked by a federal judge, who ruled that the proposed transaction was anticompetitive.

A judge separately blocked a regional partnership between JetBlue and American Airlines. The two carriers had argued that the arrangement would help them compete more effectively against other airlines in the congested Northeast United States.

JetBlue now has a partnership with United Airlines. At the same time, management continues to emphasize cost discipline, capital management, premium revenue and its available financing options as it works toward its financial goals.

“Importantly, we believe we have the liquidity and financing options to create a strong bridge to at least $1 EPS and positive free cash flow in 2028,” CFO Ursula Hurley said in a statement. “We remain focused on disciplined cost execution and capital management as we work toward sustained profitability and positive free cash flow.”

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.