JetBlue bucks airline industry outlook, sees strong demand

(Rewrites, adds unit revenue forecast, outlook on revenue initiatives, byline and dateline)

By Jeffrey Dastin

NEW YORK, July 28 (Reuters) - JetBlue Airways Corp on Tuesday forecast a potential rise in July unit revenue even as competitors projected steep drops, profiting from new premium-class seats while escaping capacity gluts in Dallas and Chicago.

The New York-based airline expects that passenger revenue per available seat mile, which measures sales relative to the capacity and distance of flights, will stay flat or rise as much as 1 percent in July from a year earlier. JetBlue did not share its revenue outlook beyond the month, but analysts say the forecast bodes well for the quarter.

"We're excited about what revenue trends look like this summer," Marty St. George, JetBlue's executive vice president for commercial and planning, said on an investor call.

The outlook reflects JetBlue's growth from new airfare packages and premium-class seats, as well as relief that the airline has minimal service to U.S. cities that are oversaturated with flights.

JetBlue, the fifth-biggest U.S. airline, said it has won corporate customers since introducing its "Mint" service in 2014, a lower-priced response to business class on other carriers. It plans to grow Mint as much as possible, adding it to Boston's transcontinental flights next year.

Early results from new ticket options rolled out last month, which include a low-fare choice without a free checked bag, have made JetBlue optimistic that it will hit its $65 million target for the initiative this year, St. George said.

While a strong U.S. dollar and weak economies abroad have hurt demand for larger U.S. airlines, JetBlue has escaped these pressures because most of its customers are U.S.-based.

JetBlue has few flights to greater Dallas, hometown of American Airlines Group Inc and Southwest Airlines Co , or Chicago, the base of United Continental Holdings Inc , where capacity has outpaced demand.

Low-cost rival Southwest expects passenger unit revenue will fall just under 1 percent this quarter, while American has forecast a drop of as much as 8 percent. Southwest posted an operating profit margin of 22.5 percent last quarter, compared to JetBlue's 17.5 percent.

JetBlue said Tuesday that the six cities it flies to most - New York, Boston, greater Los Angeles, Orlando, Fort Lauderdale, Florida and San Juan, Puerto Rico - had greater margins last quarter than a year earlier.

JetBlue earned $152 million in the second quarter, up from $61 million a year earlier, excluding the 2014 sale of its LiveTV subsidiary. Its shares rose 2.6 percent on Nasdaq.

(Reporting By Jeffrey Dastin in New York; Editing by Chizu Nomiyama and Bill Rigby)