Sept 10 (Reuters) - JetBlue Airways raised its third-quarter seat-revenue outlook on Thursday despite higher-than-expected costs as demand has remained steady through fare hikes, sending shares of the company up nearly 3% in morning trading.
The Iran war has pushed up fuel prices, raising costs for airlines worldwide, prompting them to increase ticket prices and scale back capacity. However, consumers thus far have remained largely unfazed by the higher prices.
The New York-based airline expects quarterly
revenue per available seat mile to increase between 17% and 20%, compared with its prior forecast of a 12.5% to 16.5% rise, as high fares have not hurt demand, the airline said.
However, costs are rising faster than expected, due in part to weather and air-traffic-control-related disruptions in July and August, the company said, which drove an increase in cancellations and nudged operating costs higher.
The company said severe airport weather days across the U.S. rose 40% versus the prior three-summer average while air-traffic-control-related cancellations in the Northeast nearly doubled.
JetBlue raised its forecast for third-quarter nonfuel unit costs to a 6% to 8% increase from 2.5% to 4.5% previously.
The carrier said it also expects to pay $3.96 per gallon for fuel in the quarter, up from its prior forecast of $3.49.
The carrier now expects third-quarter capacity to rise between 1.5% and 3.5%, down from its prior range of 3% to 6%.
In April, the midsized airline's CEO, Joanna Geraghty, told employees that the carrier was not considering bankruptcy this year, despite a hit from higher fuel prices.
(Reporting by Nathan Gomes in Bengaluru and Doyinsola Oladipo in New York; Editing by Shilpi Majumdar and Matthew Lewis)
