JetBlue stock plummeted Tuesday following the release of a 2025 outlook that disappointed investors. The stock was down more than 28% in midafternoon trading.
JetBlue, which is working through a cost-cutting and service evolution plan that it calls JetForward, expects an adjusted operating margin this year of between zero and 1%. Costs per available seat mile, excluding fuel, are expected to be up 5% to 7% year over year, while the carrier said it expects its revenue per available seat mile to be up 3% to 6%.
The airline is planning to hold its capacity for the year at the 2024 level after having reduced capacity in the fourth quarter by 5.1% compared with 2023.
Signs of progress
JetBlue presented the JetForward plan this summer with goals of driving $800 million to $900 million in additional earnings through 2027 and of bringing it back to profitability this year. The airline said Tuesday that revenue initiatives, including changes to its route network and the introduction of charges for preferred seat assignments, drove $395 million in additional revenue last year. JetBlue also touted a six-point improvement in its on-time percentage in 2024.
The carrier's operating margin for the fourth quarter was in the black at 0.7%, though interest expense drove the airline's net results to a loss of $44 million. For 2024 overall, JetBlue suffered net losses of $795 million with an operating margin of negative-7.4%.
JetBlue has struggled over the past two years along with several other discount U.S. carriers as consumer preferences have tilted toward more premium service.
In response, the airline announced plans to introduce its first lounges this year and to introduce domestic first class next year, along with other product changes.