JetBlue Airways Corp. (JBLU) expects to be profitable for the rest of the year, its chief executive said in an interview on Thursday, even as record oil prices threaten to push its rivals into bankruptcy.

The New York-based discount airline should prosper compared with rival carriers thanks to full planes and low costs as high fuel prices hobble competitors, CEO David Neeleman (search) said.

"At $60 oil, or $80 oil, or whatever way you want to look at it — it could go higher than this — we think we can continue to make a profit," he said. "Our competitors can't."

JetBlue — which has built a loyal following with a combination of low fares, strong customer service and perks like leather seats and in-flight satellite television — is falling short of its target operating margin in the "mid-teens" on a percentage basis, he said. Operating margin is operating income — or profit before interest, taxes and other financial costs — divided by revenue.

But Neeleman said he is confident the airline can eventually boost its margin because oil prices will either decline or will rise so much that JetBlue's loss-plagued rivals like Delta Air Lines Inc. (DAL) will be driven out of business.

"Either way, we'll get there because our model works under these environments, and it's not working for some of our competitors," he said at his office at JetBlue's headquarters near its hub airport, John F. Kennedy International (search) in New York. "What we're seeing in the market is not sustainable."

JetBlue shares have tumbled from their all-time high of $46.85 and closed Thursday at $20.06 on Nasdaq. They have outperformed the airline sector by about 12 percent this year, and the stock still trades at a forward price-to-earnings ratio of 66.8 times.

JetBlue has pushed through at least three fare hikes this year, helping it offset the rise in oil prices.

Neeleman said the airline he founded needs to add $10 to the price of a one-way ticket to offset each $20 increase in the price of a barrel of oil.

The No. 2 U.S. carrier by market value is also buying financial contracts that lock in some fuel at certain prices, though Neeleman said he is cautious about hedging given the fact that his more cost-heavy rivals are mostly unhedged.

JetBlue is pushing forward with an aggressive expansion, which this year will see the entry into service of 100-seat Embraer 190 regional jets alongside the larger Airbus A320s that are the mainstay of its fleet.

The airline plans to start flying five of the Brazilian-made jets in early November, with destination cities to be announced as early as August.

Neeleman said that flights between JFK airport and Boston's Logan Airport, competing with the shuttle service run by Delta and US Airways Group Inc. (search) , were one possibility for the new planes.

"The 190's going to change things," he said. "It's going to change the rules of the game a lot."

He acknowledged the airline, which ranked 14th among U.S. airlines in the U.S. Department of Transportation's most recent monthly ranking of on-time arrivals, still has work to do in that area.

But he said some of those delays are inevitable given its heavy flight concentration in the Northeastern United States, which was battered by snowstorms over the winter and lately has been afflicted by heavy thunderstorms.

JetBlue also sometimes suffers because it will try to get a flight out even if it is several hours late rather than cancel it, he said.