JetBlue offers little visibility into its revenue outlook as US domestic capacity continues to grow

JetBlue charted impressive growth in many key financial statistics in 2015. The company doubled its ROIC, posted healthy gains in pre-tax margins and recorded a nearly 70% jump in 2015 profits. Moreover, JetBlue was one of the few US airlines that posted positive passenger unit growth during 2015.

It is not clear whether JetBlue can stage a repeat performance in 2016. Obviously lower fuel costs will keep its profits strong; but it is tough to gauge whether the company can sustain its revenue outperformance in 2016. For now, JetBlue does not predict any significant amount of pricing pressure in its markets, but that could change over the course of 2016; airlines (including JetBlue) need to fill the capacity that they plan to deploy in the market place during the year.

Internally, JetBlue is engaging in a lot of commercial initiatives that should drive overall revenue growth. But the airline has opted to report total unit revenues from now on rather than PRASM, making it tough to determine how it is benchmarking against its peers. Overall, JetBlue's outlook is positive, despite the airline posting a negative unit revenue performance for Jan-2016.