unaligned

JetBlue Airways forecast a bigger-than-expected fall in 2024 revenue amid a moderation in domestic travel demand ahead of the upcoming U.S. elections, sending its shares down 4.5% before the bell on Tuesday. Election-related uncertainty is expected to weigh on travel demand as consumers prefer to be home and hold off on major discretionary spending. JetBlue expects to see a one percentage point headwind to its Q4 revenue per available seat mile, a proxy for pricing power, due to the election. It also expects to shave a percentage point from its unit revenue for Q4 due to Hurricane Milton that caused widespread damage across Florida. The New York-based carrier expects its 2024 revenue to fall between 4% and 5%, compared with analysts’ average expectation of a 3.6% fall, according to data compiled by LSEG. The airline is also facing higher operating costs as ongoing inspections of Pratt & Whitney’s Geared Turbofan engines have grounded a number of its aircraft. JetBlue, however, managed to report a smaller-than-expected Q3 loss on Tuesday, owing to improved demand and pricing in the quarter. During the U.S. summer travel season, an oversupply of airline seats led to discounted fares as carriers tried to fill planes, which negatively impacted their earnings. Since then, U.S. airlines have reduced their capacity. JetBlue has taken measures to improve its financial position following the fallout of its proposed $3.8b merger with ultra-low-cost carrier Spirit Airlines in March.<br/>

Frontier Group, the parent of budget carrier Frontier Airlines, reported a bigger-than-expected loss in Q3 Tuesday, as overcapacity on domestic routes hit its revenue in the first half of the period. Shares of the carrier were down about 3% in early trading. An excess supply of airline seats in the domestic market during initial phases of the U.S. summer travel season had forced carriers to offer discounts to fill their planes. The situation of oversupply and subsequent discounting placed additional strain on ultra-low-cost carriers such as Frontier as they grappled with stiff competition from their larger counterparts. Airlines, however, have moderated capacity since then. Frontier said its adjusted revenue per available seat mile (RASM) was higher in the second half of the quarter. Its adjusted RASM, a proxy for pricing power, fell 5% in the quarter over the year earlier. Frontier reported an adjusted loss of 5 cents per share, compared with analysts' average estimate of a 3-cent loss, according to data compiled by LSEG. The ultra-low-cost business model has remained challenged since the pandemic because of excessive labor, aircraft maintenance and other operating costs. No-frills carriers such as Frontier have been on the lookout to find high-margin revenue streams to offset ballooning expenses, forcing them to move away from their traditional business models to woo customers who are willing to pay more for better travel experiences.<br/>

While airlines worldwide grapple with groundings of Airbus A320neo-family jets due to Pratt & Whitney’s recall of hundreds of its geared turbofan (GTF) engines, all-Airbus operator Frontier Airlines has so far been spared similar operational disruptions. But Frontier’s fortunes could change soon, parent company Frontier Group Holdings warns in a 29 October financial filing. The Denver-based ultra-low-cost carrier (ULCC) may be required to remove ”certain engines for inspection due to a possible condition in the powdered metal used to manufacture certain engine parts”, it says. CE Barry Biffle has previously explained that Frontier’s A320neo-family jets were delivered almost entirely outside of the problematic production window that prompted P&W’s recall in September 2023, meaning that its Airbus jets have kept flying while some competitors – such as JetBlue Airways and Spirit Airlines – have averaged double-digit numbers of aircraft grounded since late last year. “While this has not impacted our operations through 30 September, these additional inspections or maintenance obligations could result in lengthy turnaround times to perform these inspections,” Frontier says. “This inspection programme may have an adverse impact on our future capacity plans, particularly if we are required to temporarily take aircraft out of service.” <br/>

Pakistan received just one bid for a stake in the national carrier as five other consortiums stayed away from one of the country’s major privatization attempts. The bidder deposited “earnest money” for the transaction with the nation’s Privatisation Commission by Tuesday’s deadline, Ahsan Ishaq, spokesman for the Privatisation Ministry, said by phone, without disclosing the name of the interested party. A total of six groups were shortlisted to bid for shares in loss-making Pakistan International Airlines including private airline Airblue Ltd., Arif Habib Corporation Ltd., Air Arabia’s Fly Jinnah, Y.B. Holdings Pvt., Pak Ethanol Pvt. and real estate consortium Blue World City. This transaction is a part of Prime Minister Shehbaz Sharif’s pledge to the International Monetary Fund to privatize the government’s loss-making entities to reduce the financial burden on the country’s economy. <br/>

Indonesian carrier TransNusa Airlines has operated the longest ARJ21 commercial flight, deploying the Comac regional jet on flights between Manado and Guangzhou. The route is also the longest commercial flight operated by an ARJ21, at nearly 4h from Manado to Guangzhou, and about 3h 50min on the return leg, according to flight tracking data. In a statement following the inaugural flight, Comac hails the “important milestone” achieved by the ARJ21. “The launch of the new route…marks a new journey for the international operations of [Chinese-produced] commercial aircraft,” the Shanghai-based airframer states. According to TransNusa, it will operate three weekly flights with the ARJ21 between Manado and Guangzhou, with the intention to ramp up frequencies to daily flights by end-November. TransNusa, which is linked to Chinese lessor CALC, is the first foreign operator of the ARJ21. In July 2023, the airline launched ARJ21 flights between its Jakarta hub and Kuala Lumpur, marking the type’s first international flight. The airline, which has a pair of ARJ21s, then commenced flights to the southern Malaysian city of Johor Bahru in September. <br/>