JetBlue cuts capacity growth forecast on rising fuel costs, weather disruptions

Sept. 10 (Reuters) - JetBlue Airways cut its capacity growth forecast for the third quarter on Thursday after higher fuel costs and weather-related disruptions weighed on operations.

The carrier, however, said healthy booking trends continued into September across peak and off-peak periods.

The U.S.-Israeli war on Iran has pushed up fuel prices, raising costs for airlines worldwide, prompting them to increase ticket prices and scale back capacity.

Aircraft groundings and a heavy debt burden have compounded JetBlue's challenges after its proposed tie-up with now-bankrupt Spirit Airlines collapsed.

JetBlue said weather and air traffic control related disruptions in July and August, particularly in the Northeastern U.S., drove an increase in cancellations and nudged operating costs higher.

The mid-sized airline's forecast update comes months after CEO Joanna Geraghty told employees that the carrier was not considering bankruptcy this year, despite a hit from higher fuel prices.

The New York-based carrier now expects third-quarter capacity to rise between 1.5% and 3.5%, down from its prior range of 3% to 6%. Its shares were roughly flat in morning trading.

JetBlue also expects to pay $3.96 per gallon for fuel in the quarter, up from its prior forecast of $3.49.

The airline expects its 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, banking on strong travel demand and higher ticket pricing.