JetBlue Airways (JetBlue) is facing a heavier fuel burden after reporting a $257 million quarterly loss, while Deutsche Bank upgraded the carrier on expectations for new products and raised its price target.
For the quarter, JetBlue’s fuel bill was $868 million, up 61%, while the airline recorded a $257 million loss. Fuel prices linked to the Iran war have put pressure on margins. JetBlue raised its full-year revenue per available seat mile outlook on Oct. 26. The stock rose more than 16% during the week, ending Thursday still about 22% below its year-start level.
On Thursday, Deutsche Bank analyst Michael Linenberg moved JetBlue’s rating from Hold to Buy and raised the target to $5.50 from $3. The new target was 54% above JetBlue’s Wednesday closing price.
Linenberg said airlines are placing greater emphasis on the fares they earn as inflation and fuel costs rise, against a favorable supply backdrop. In his view, carriers popular with budget-minded customers and people traveling by choice may be better positioned. The bank said airlines posted positive December-quarter returns in 21 of the past 25 years.
Linenberg expects new offerings from JetBlue and Frontier to contribute to revenue and margins beginning in 2027.
JetBlue has also raised the peak-date fee for a first checked bag to $70 when travelers pay within 24 hours of departure. On peak dates, the fee is $55 if paid earlier; outside those periods, it is $60 for payment within 24 hours and $50 in advance. JetBlue said the increases would help offset higher fuel and operating expenses while supporting competitive base fares.
