JetBlue Airways withdraws 2020 earnings guidance amidst the Coronavirus crisis

The rapid spread of Coronavirus across borders is disrupting business operations and is threatening a sharp slowdown in the global economy. As per the experts, with the rise in restrictions on traveling and tourism, the aforementioned two are the primary niches that are taking the greatest hit due to the virus outbreak. In recent news, JetBlue Airways (NASDAQ: JBLU) withdrew its previously given guidance for Q1 as well as the full-year earnings in 2020.

The
company’s statement on Monday also highlighted that it plans on launching time-off
programs (voluntary) for its workers in an attempt to contain the spread
of Coronavirus that continues to sabotage the global travel industry.

JetBlue
Airways Postpones Scheduled Hiring And Increases Focus On Aircraft Cleaning

According
to JetBlue, the falling demand is pushing the company to adjust flight
schedules for the next two months (March to May). The company will remain open
to further cancelations in an event that the epidemic is not contained within
the first half of 2020. In its statement on Monday, JetBlue also announced to
have increased its focus on cleaning the aircraft more often than otherwise and
that the scheduled hiring has also been postponed.

The
rapid decline in demand, as per an industry body, is likely to cost $113
billion in global revenue for airlines in 2020. Air New Zealand also withdrew
its earnings guidance for this year on Sunday. The airline also launched a
similar unpaid leave program for its employees while delaying the scheduled
hiring as well.

JetBlue
Expects A 6% Point Decline In Total Revenue Per Available Seat Mile In Q1

JetBlue’s
staunch rival, Southwest
Airlines, also declared an estimated $300 million hit to its quarterly operating
revenue in Q1 amidst the Coronavirus crisis. According to JetBlue, the health
emergency is likely to reduce its total revenue per available seat mile by 6%
point in the current quarter (Q1). The company, however, expressed its concern
for the rapidly worsening trends that can be expected to hit the airline’s
financial performance harder than the estimate.

At
the time of writing, JetBlue Airways is exchanging hands at $14.0 per share in
the stock market that translates to just over a 2% decline in 2020 so far. Its
performance in 2019 was also reported only slightly upbeat with an annual gain
of under 20%. Share prices were seen around $16.0 per share in January 2019 and
the stock closed the year modestly higher at around $18.70 per share in
December. JetBlue Airways currently has a market cap of £3.19 billion.