JetBlue reports record Q3 earnings

JetBlue Airways (JBLU) announced record third-quarter earnings Thursday of $79 million, based on $1.5 billion in revenue from flying fuller planes with more paying passengers.

The New York airline's net income was 24 cents per diluted share for July, August and September. That compared to $71 million or 21 cents per share for the same period in 2013.

"Today, we are pleased to report record third quarter earnings," said Dave Barger, JetBlue's CEO. "We saw improved profitability across our network, reflecting the success of our efforts to differentiate our product and culture and maintain competitive costs."

The earnings gains were based on increasing both capacity and load factor. Revenue passenger miles grew 5.9% to 10.1 billion, with a capacity increase of 4.5%. The load factor — or the average portion of each plane carrying paying passengers — grew 1.2 points from last year to 86.2%.

"Our record results reflect the strength of our underlying business as we continued to drive margin improvement across our network,"

"Our focus remains on improving results through ancillary revenue initiatives, cost control and profitable growth," said Robin Hayes, JetBlue's president. "We believe these efforts will drive improved returns for our shareholders."

The stock opened up 2%, or 24 cents, to $11.43 in early trading by 10:30 a.m.

JetBlue serves primarily the East Coast and Caribbean, with 800 daily flights to 86 cities carrying 30 million passengers a year.

Executives praised Mint, a premium service with lie-flat seats aboard Airbus 321 planes from New York's John F. Kennedy airport to Los Angeles, which will expand Sunday to JFK to San Francisco.

"We are seeing strong demand for Mint," Barger said.

Mint fares began at $599, $799 and $999, with only the top price refundable. But given the strong demand, prices are edging up, with a $1,209 fully refundable fare.

"We truly believe we have a terrific product," said President Robin Hayes, who is slated to become CEO in February.

Executives were somewhat disappointed with Caribbean and Latin American performance, which includes Puerto Rico and the U.S. Virgin Islands, and added Lima this year, as capacity grew at JetBlue and other airlines.

JetBlue had 17% more capacity in the region than a year earlier, with competitors gaining 7%, but JetBlue continues to plan on growth there.

"We believe the Caribbean and Latin America will continue to be an important profit center for JetBlue," said Mark Powers, chief financial officer.

Part of the airline's success came from record ancillary revenue averaged $22 per customer, for services such as Even More Space for legroom and early boarding, even as Wall Street analysts have pushed JetBlue to start charging for checked luggage. Powers said Even More was on pace to generate $190 million for the year.