JetBlue Airways revised its Q1 and 2007 forecast this morning due to the severe service disruptions it experienced during and after the Feb. 14 ice storm. The storm cost the company $30 million, stranded more than 130,000 customers, and resulted in the cancelation of 1,100 flights (32% of its schedule). JetBlue now forecasts an operating margin of -2% to -4%, instead of the 2% to 4% it had forecast before the breakdown. Q1 pretax margin will now be -8% to -10%, compared with a previous forecast of -2% to -4%. Its full year operating margin forecast was revised down to 8-10% from 10-12%. In a "Customer Bill of Rights" announced yesterday, the company said it will allow customers to leave planes grounded for over five hours. Travelers whose flights have landed but can't dock at a gate will receive vouchers for future travel, the value of which depends on the length of their delay. CEO David Neeleman said yesterday he expects normal operations to resume today. Shares of JBLU were down $0.66 (4.9%) to $12.90 in trading yesterday.
Sources: Press Release, MarketWatch, Bloomberg
Commentary: Post-Snowstorm Trading: Comparing JetBlue and Northwest • Could the JetBlue Fiasco Have Been Avoided? • Wall Street Journal (video)
Stocks/ETFs to watch: JetBlue Airways Corp. (JBLU)
Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.