JetBlue just got its a$$ handed to it on a platter, with shares tanking more than 25% on Tuesday—the kind of market beatdown that makes you wonder if the company pissed off the stock gods or just forgot how to run an airline. This wasn’t just any bad day; it was JetBlue’s worst single-day percentage loss since going public over two decades ago. Bigly.

(Source: Giphy) 

The catalyst for this bloodbath came down to one thing, and one thing only: a garbage financial outlook that managed to simultaneously underwhelm, irritate, and depress investors. The airline forecasted that non-fuel unit costs would rise as much as 10% in the first quarter and up to 7% for the year. Revenue projections didn’t help either, with expectations ranging from a 0.5% drop to a measly 3.5% gain this quarter. Compare that to Delta and United, who are out here strong-arming their pricing power and flaunting revenue growth, and it’s clear JetBlue isn’t even in the same league. 

CEO Joanna Geraghty, who’s been at the helm since last year, tried to spin this dumpster fire as a long-term transformation. She called the company’s cost-cutting plan a “multi-year strategy” and assured everyone it’s “not linear.” Naturally investors, clearly as confused as me on what ‘non linear” means, weren’t buying it. Instead they reverted to yeeting shares into the abyss. 

(Source: CNBC) 

Looking deeper, JetBlue’s so-called “strategy” includes slashing unprofitable routes, deferring new aircraft, and slapping higher price tags on seats in a desperate bid to scrape together some cash. They even dangled early retirement packages at senior pilots, which is a polite way of saying, “I’ll pay you to leave” LOL. Last year, these moves shaved $190 million off costs, which sounds impressive until you realize it’s barely a dent in the face of rising expenses and grounded planes.

What’s more is that thanks to a Pratt & Whitney engine recall, the airline expects to have somewhere in the “mid-to-high teens” number of Airbus jets grounded this year, up from 11 last year. Plus, as if their operational woes weren’t enough, JetBlue’s legal Ls are piling up faster than most would like. As most know, a judge blocked their planned acquisition of Spirit Airlines, which was supposed to be their golden ticket to market dominance—and now, they recently lost a case over its regional partnership with American Airlines, another growth strategy that got legally obliterated. 

(Source: Reuters) 

But, but, but… even with all the chaos and head scratching numbers, if you squint hard enough, there are some bright spots. For example, JetBlue’s Q4 loss was narrower than expected—13 cents per share versus the 21 cents analysts had braced for—thanks to slightly better pricing and cost-saving efforts. But that’s where the good ends, especially as revenue still fell 2.1% to $2.28 billion. Oh and keep in mind, this is a company that’s only managed to turn a profit in two of its last eight quarters.

Meanwhile, RASM (revenue per available seat mile) projections for Q1—a key industry metric—came in far below expectations. Analysts were looking for 6.88% growth, but JetBlue said, “How about a range from -0.5% to 3.5% instead?” Even the Easter holiday, usually a revenue booster, won’t save them this quarter since it falls in Q2 this year. Timing, like everything else for JetBlue, isn’t on their side. 

(Source: Giphy) 

So at the end of the day, here’s the harsh truth: JetBlue tanked -25% for good reason. Rising costs, grounded planes, legal setbacks, and lackluster revenue growth makes it hard to see how this company pulls out of the tailspin it's in. And right now, investors have every right to be pissed. 

Meaning, unless Geraghty & Co. can figure out how to stop the bleeding, we may just be looking at a Spirit 2.0 in the making here. For now, keep an eye on JetBlue—as the stock is officially down -26.22% this month. Obviously, there could be a dip buy here (only if you’re bold enough), but even still I wouldn’t do anything rash until I get more confirmation.

(Source: Giphy) 

In the meantime, place your bets accordingly and as always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in United Airlines as mentioned in the article.