The Associated Press April 19, 2011, 2:28PM ET

Earnings Preview: JetBlue

JetBlue Airways Corp. is scheduled to report its first-quarter earnings before the market opens Thursday.

WHAT TO WATCH FOR: JetBlue's costs rose in the first quarter as the price of jet fuel continued to go up. Oil prices rose by 17 percent in the first three months of the year. The New York airline also took a major hit from snowstorms that led to thousands of canceled flights in the first two months of the year.

But as the snow cleared, higher fares and fuller planes remained. JetBlue joined in on a number of fare increases implemented by U.S. airlines in the first quarter as carriers bet on improving demand. And as more people flew, the airline operated its flights more full. By running fuller flights, airlines are able to capture more ticket revenue without spending money to add more planes.

Although it's keeping a lid on expansion in some areas, it's rapidly adding service to Boston and the Caribbean. It recently reached 100 daily flights in and out of Boston. It predicts about one-quarter of its flights will be in and out of the Caribbean this year. The company operates a total of 600 flights per day.

JetBlue also tacked on surcharges on certain routes to cover its rising fuel bill, which should further boost revenue for the quarter.

WHY IT MATTERS: JetBlue's results will highlight just how good airlines are becoming at passing higher costs onto consumers through fare increases and fuel surcharges. The airline's traffic throughout the quarter is a key indication of demand, and its average fare will show how much passengers are willing to pay this year to fly from Point A to Point B. The possible expansion of fuel surcharges is also key as the industry tries to balance its need to improve revenue with fears that charging too much might scare some of the most price-sensitive customers away.

WHAT'S EXPECTED: Analysts expect JetBlue to post a profit of 2 cents per share on revenue of $989.1 million.

LAST YEAR'S QUARTER: The airline posted a surprise first quarter loss due to higher costs in 2010, killing a yearlong profit streak. It lost a penny per share that quarter, and reported revenue of $870 million.


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