July 28, 2020 / 11:30 AM / 14 days ago

JetBlue CEO says future centers on cash and costs in choppy recovery

FILE PHOTO: A Jet Blue airplane is seen at Los Angeles International airport (LAX) in Los Angeles, California, U.S. March 28, 2018. REUTERS/Mike Blake

CHICAGO (Reuters) - JetBlue Airways’ (JBLU.O) future is all about cash and cost structure as it prepares to weather a choppy, non-lineal recovery from the coronavirus pandemic that has crushed air travel demand, Chief Executive Robin Hayes told investors on Tuesday.

Global airlines are suffering their toughest crisis, forcing a focus on shoring up cash and cutting costs until demand returns.

The International Air Transport Association, the main industry body, said on Tuesday it would take until 2024 for passenger traffic to return to pre-crisis levels, a year longer than previously forecast due in part to slow virus containment in the United States and a weaker outlook for corporate travel.

New York-based JetBlue expects revenues to decline about 80% in the third quarter from a year earlier, worse than what analysts had forecast, and down between 60% and 70% in the fourth quarter.

Total operating revenues plunged 90% to $215 million in the second quarter from a year earlier.

JetBlue said it had $3.4 billion of liquidity at the end of June and is forecasting a daily cash burn between $7 million and $9 million in the third quarter after an average of $9.5 million over the second quarter.

The airline, which this month signed a strategic partnership with American Airlines (AAL.O), said its capacity will be down at least 45% in the third quarter versus last year as it takes a conservative approach to adding flights back to its schedule.

The U.S. airline swung to a net loss of $320 million for the second quarter ended June 30, compared with a profit of $179 million a year earlier.

On an adjusted basis, the loss per share was $2.02.

Reporting by Tracy Rucinski; editing by Jonathan Oatis

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