12:19 PM EDT, 04/23/2024 (MT Newswires) -- JetBlue Airways ( JBLU ) revised down its full-year revenue guidance to reflect elevated industry capacity in its Latin region while the airline's first-quarter results came in better than expected.

JetBlue's ( JBLU ) Latin region represents 35% of total available seat miles, or ASMs, and is one of the most profitable markets of the airline, Chief Executive Joanna Geraghty said on a conference call, according to a Capital IQ transcript. "The elevated capacity in this region is significantly pressuring the overall revenue acceleration we expected to see from the first quarter into the second quarter."

"We've, therefore, revised our full-year guidance and no longer expect to approach break-even adjusted operating margin for the full year," Geraghty told analysts. Most of the aviation industry has shifted a portion of their flying to meet rising demand for leisure travel amid remote working trends, "allocating capacity to many of JetBlue's ( JBLU ) bread and butter routes," Geraghty said on the call.

JetBlue ( JBLU ) now expects revenue to drop by a low-single digit this year, compared with its prior expectations of sales remaining flat, according to an investor presentation. For the second quarter, it sees revenue falling 6.5% to 10.5% year over year. Analysts polled by Capital IQ expect sales of $9.59 billon this year and $2.51 billion in the second quarter.

JetBlue's ( JBLU ) stock was sliding 16% in Tuesday midday trade. The company continues to forecast a low-single-digit drop in ASMs this year, while predicting a 2% to 5% decrease in the ongoing quarter.

The company expects to trim its capacity "in the fall trough to better match supply with demand," Geraghty said. "Given we are not yet profitable and not growing this year, we have increased the hurdle rate of underperforming markets and as a result, have announced the closure of 7 Blue cities."

For the March quarter, operating revenue declined 5.1% to $2.21 billion, versus analysts' $2.2 billion estimate. The air carrier's adjusted per-share loss ballooned to $0.43 from $0.34, compared with the Street's view for a loss of $0.52.

In March, JetBlue ( JBLU ) terminated its proposed acquisition of Spirit Airlines ( SAVE ) amid regulatory hurdles after the US Justice Department sued to block the deal in 2023 on antitrust concerns.

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