On Thursday, JetBlue Airways experienced a notable surge in its stock prices, with shares climbing intraday after the airline received a positive uplift from its revised revenue projections for the third quarter and a reduction in anticipated fuel expenses. The company now forecasts that revenue for the September quarter will either decrease by 2.5% or see an increase of up to 1% when compared to the same period last year.
This data comes from a recent filing with the Securities and Exchange Commission, indicating a more favorable market outlook. Previously, JetBlue had predicted a revenue decline of between 1.5% and 5.5% from the revenue generated in the third quarter of 2023, which was reported at $2.35 billion. Analysts from Capital IQ are currently estimating revenue to reach approximately $2.29 billion during this ongoing period.
Following these positive announcements, JetBlue shares saw a notable rise of 8.5% during afternoon trading. JetBlue's operational performance demonstrated visible enhancements year over year, particularly during the busy summer travel season. This improvement can be attributed to better in-month bookings, notably from the Latin American region.
The airline also reported advancements on its initiatives aimed at generating $300 million in revenue. Additionally, JetBlue capitalized on cancellations from other airlines, which were prompted by a technology outage linked to CrowdStrike's software updates back in July. Financially speaking, JetBlue has seen a reduction in expenses during the quarter thus far, largely thanks to moderating fuel prices as well as ongoing cost control measures.
The airline now anticipates fuel prices per gallon to fall within the range of $2.70 to $2.80, a reduction from its previous expectation that ranged between $2.82 and $2.97. However, operating costs per available seat mile, exclusive of fuel, are expected to increase by 5% to 7% in the third quarter, a downward revision from the prior forecast of 6% to 8%. In terms of capacity, JetBlue is now predicting that available seat miles will decrease by 3% to 5% during this quarter, compared to its earlier guidance which had suggested a potential decline of 3% to 6%. In an additional note, JetBlue successfully executed three financing transactions in August, generating gross proceeds amounting to $3.2 billion as per investor presentations.
With these proceeds, the airline plans to fund capital expenditures for the years 2024 and 2025, repurchase existing notes, and enhance overall liquidity. For the entirety of the year, the company's management has increased its forecast for interest expenses, projecting a range between $370 million and $380 million, a noticeable shift from the earlier estimates of $320 million to $330 million as indicated in the securities filings. Looking ahead, JetBlue is anticipating flat year-over-year capacity growth in 2025, primarily driven by ongoing challenges associated with RTX's Pratt & Whitney geared turbofan engines.
In 2024, the airline had an average of 11 jets grounded due to this engine issue, and anticipates that the number of grounded aircraft may escalate to the mid-to-high teens by 2025..