* Airlines stress need to end air traffic control furloughs
* JetBlue profit of 5 cents/shr vs. estimate 10 cents
* United loss narrows
* JetBlue down 4 pct after stock downgrade
April 25 Southwest Airlines and JetBlue
Airways on Thursday reported profits for the first
quarter, long the weakest period for carriers, but industry
leader United Continental failed to follow suit, posting
a loss, as operational costs weighed.
Revenue for the quarter rose at the three carriers, but the
numbers were a mixed bag as far as Wall Street was concerned,
with Southwest and United beating estimates but JetBlue falling
short of expectations.
Jim Corridore, an equity analyst with S&P Capital IQ, viewed
the revenue numbers positively. "It's clear that the revenue
environment is still healthy and companies are getting a bit of
an advantage from lower fuel expenses which is more than
offsetting any weakness," he said.
Still, Corridore cut his rating on JetBlue to "sell" from
"hold," citing rising maintenance costs and slower growth.
The airlines, with an eye on the current quarter, expressed
concern about the effect of federal budget cuts known as
sequestration on passenger demand, and they stressed the need to
end U.S. air traffic staff cuts that began this week and have
caused flight delays at airports.
"This is government not working - capital letters
exclamation point - when we're sitting here holding the
traveling public hostage in the midst of sequestration," JetBlue
Chief Executive Dave Barger said during an earnings conference
Shares of Southwest and United Continental were modestly
lower, while those of JetBlue fell 3.8 percent.
The Federal Aviation Administration started furloughing air
traffic controllers on Sunday. The trade group for U.S. airlines
has filed suit seeking a halt to the furloughs, which carriers
have estimated could lead to hundreds of millions of dollars in
"We are disappointed that the FAA chose this path, that
maximizes customer disruptions and damage to airlines, instead
of choosing a less disruptive method to comply with the budget
obligations," United Continental Chief Executive Jeff Smisek
said during a conference call.
REVENUE GAINS IN SEASONALLY WEAK PERIOD
Net income at Southwest was $59 million, or 8 cents a share,
for the first quarter, down 40 percent from $98 million, or 13
cents a share, a year earlier.
Southwest had profit-sharing expense and special items
including acquisition charges in the quarter. Excluding items,
profit was 7 cents a share compared with 2 cents a share
expected by analysts, according to Thomson Reuters I/B/E/S. Its
revenue rose 2 percent to $4.1 billion.
United Continental, currently the world's biggest carrier,
posted a loss of $417 million, or $1.26 per share. Adjusted for
merger-related and other charges, the loss was 98 cents a share,
compared with a loss of $1.10 expected by analysts. Revenue rose
1.4 percent to $8.7 billion.
Higher costs hurt JetBlue's profit, which came to $14
million, or 5 cents a share, compared with 10 cents expected by
analysts. JetBlue's revenue rose 8 percent to $1.3 billion.
Southwest and JetBlue cautioned that a key revenue measure,
unit revenue, would weaken in April, but both added May was
Other airlines have noted weaker near-term revenue trends.
Delta Air Lines said this week that U.S. government
spending cuts and lighter demand from leisure travelers would
hurt unit revenue in April, while US Airways said demand
from business passengers had been pressured since the start of
Earlier this weak, Delta and US Air reported