Operating revenues for the quarter totaled $793 million, representing a decline of 2.9% over the first quarter of 2008 driven in part by a 5.4% decline in capacity. For the first quarter, revenue passenger miles decreased 8.0% to 6.0 billion, resulting in a first quarter load factor of 76.0%, a decrease of 2.2 points year over year.
Yield per passenger mile in the first quarter was 11.69 cents, up 2.5% compared to the first quarter of 2008. Passenger revenue per available seat mile (PRASM) for the first quarter 2009 remained flat on a year over year basis at 8.89 cents and operating revenue per available seat mile (RASM) increased 2.7% year-over-year to 9.98 cents.
Operating expenses for the quarter decreased 9.9%, or $79 million, over the prior year period. JetBlue's operating expense per available seat mile (CASM) for the first quarter decreased 4.8% year-over-year to 9.06 cents. Excluding fuel, CASM increased 8.9% to 6.36 cents.
Fuel Expense and Hedging
JetBlue modified its fuel hedge portfolio at the end of 2008. During the first quarter, approximately 9% of JetBlue's fuel consumption was hedged, resulting in a realized fuel price of $1.96 per gallon, a 25.9% decrease over first quarter 2008 realized fuel price of $2.65. JetBlue realized $56 million in fuel hedging losses during the first quarter.
"By restructuring our fuel hedge portfolio at the end of last year, we essentially prepaid a portion of our 2009 fuel expense during 2008," said Ed Barnes, JetBlue's CFO. "As a result, we realized significant cash savings from lower fuel prices during the first quarter."
JetBlue has hedged approximately 8% of its remaining projected fuel requirements for 2009. JetBlue expects an average price per gallon of fuel, including the impact of hedges, of $1.93 in the second quarter and $1.90 for the full year 2009. At the end of the first quarter, JetBlue had posted approximately $63 million in cash collateral with fuel hedge counterparties related to its remaining 2009 fuel hedge contracts.
Balance Sheet Update
JetBlue ended the first quarter with approximately $634 million in cash and cash equivalents. In addition, JetBlue had $221 million of auction rate securities, net of unrealized losses, at the end of the quarter. JetBlue recorded an $8 million accounting charge in the first quarter to reflect a decline in the market value of some of its auction rate securities. The accompanying financial tables contain further information regarding this charge.
Effective January 1, 2009, JetBlue adopted FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), or FSP APB 14-1. This FSP required a change in accounting for certain of JetBlue's convertible debt instruments, resulting in the reclassification of a portion of them to equity and a higher effective interest rate in prior periods. JetBlue's results for all prior periods presented herein have been adjusted to include the impact of the adoption of this new standard.
"With our continued focus on generating positive free cash flow and maintaining financial strength, we believe we are well positioned to address today's recessionary environment," said Barnes. "Despite the economic environment, we expect to earn a profit every quarter this year, which is a testament to the hard work and dedication of our outstanding crewmembers."
Second Quarter and Full Year Outlook
Looking ahead, for the second quarter of 2009, JetBlue expects to report an operating margin between eight and ten percent. Pre-tax margin for the quarter is expected to be between one and three percent. PRASM is expected to decrease between two and five percent year over year. RASM is expected to decrease between zero and three percent year over year. CASM is expected to decrease between six and eight percent over the year-ago period. Excluding fuel, CASM in the second quarter is expected to increase between 15 and 17 percent year over year. Capacity is expected to decrease between one and three percent in the second quarter and stage length is expected to decrease roughly seven percent over the same period last year.
For the full year 2009, JetBlue expects to report an operating margin between 11 and 13 percent. Pre-tax margin for the full year is expected to be between four and six percent. PRASM for the full year is expected to decrease between one and four percent year over year. RASM for the full year is expected to increase between one and negative two percent year over year. CASM for the full year is expected to decrease between eight and ten percent over full year 2008. Excluding fuel, CASM in 2009 is expected to increase between nine and 11 percent year over year. Capacity for the full year 2009 is expected to be in a range of negative one to positive one percent compared to 2008 and stage length is expected to decrease about four percent over full year 2008.