UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to__________

Commission File Number: 000-49728

JETBLUE AIRWAYS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			87-0617894
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

27-01 Queens Plaza North	Long Island City	New York	11101
(Address of principal executive offices)			(Zip Code)

(718) 286-7900

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	JBLU	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~September 30, 2021,~~March 31, 2022, there were ~~318,030,520~~320,789,028 shares outstanding of the registrant’s common stock, par value $0.01.

Table of Contents

JETBLUE AIRWAYS CORPORATION

FORM 10-Q

INDEX


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			3
Consolidated Balance Sheets - ~~September~~ ~~30, 2021~~March 31, 2022 and December 31, ~~2020~~2021			3
Consolidated Statements of Operations - Three ~~and~~ ~~Nine~~ Months Ended ~~September~~ ~~30,~~March 31, 2022 and 2021 ~~and 2020~~			5
Consolidated Statements of Comprehensive ~~Income~~Loss - Three ~~and~~ ~~Nine~~Months Ended ~~September~~ ~~30,~~March 31, 2022 and 2021 ~~and 2020~~			6
Condensed Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September~~ ~~30,~~March 31, 2022 and 2021 ~~and 2020~~			7
Consolidated Statements of Stockholders' Equity - Three ~~and~~ ~~Nine~~Months Ended ~~September~~ ~~30,~~March 31, 2022 and 2021 ~~and 2020~~			9
Notes to Condensed Consolidated Financial Statements			10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2622
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4440
Item 4. Controls and Procedures			4440

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4541
Item 1A. Risk Factors			4541
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4741
Item 5. Other Information			4841
Item 6. Exhibits			4842

SIGNATURE			50 44

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,193	$	1,918	Cash and cash equivalents	$	1,834	$	2,018
Investment securities	Investment securities	1,100		1,135		Investment securities	950		824
Receivables, net of allowance of $3 and $2, at September 30, 2021 and December 31, 2020, respectively.		210		98
Inventories, net of allowance of $23 and $27, at September 30, 2021 and December 31, 2020, respectively.		64		71
Receivables, less allowance (2022-$3; 2021-$3)						Receivables, less allowance (2022-$3; 2021-$3)	248		207
Inventories, less allowance (2022-$25; 2021-$24)						Inventories, less allowance (2022-$25; 2021-$24)	68		74
Prepaid expenses and other	Prepaid expenses and other	123		123		Prepaid expenses and other	172		124
Total current assets	Total current assets	3,690		3,345		Total current assets	3,272		3,247
PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT					PROPERTY AND EQUIPMENT
Flight equipment	Flight equipment	11,031		10,256		Flight equipment	11,265		11,161
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	339		420		Predelivery deposits for flight equipment	369		337
Total flight equipment and predelivery deposits, gross	Total flight equipment and predelivery deposits, gross	11,370		10,676		Total flight equipment and predelivery deposits, gross	11,634		11,498
Less accumulated depreciation	Less accumulated depreciation	3,131		2,888		Less accumulated depreciation	3,324		3,227
Total flight equipment and predelivery deposits, net	Total flight equipment and predelivery deposits, net	8,239		7,788		Total flight equipment and predelivery deposits, net	8,310		8,271
Other property and equipment	Other property and equipment	1,199		1,202		Other property and equipment	1,228		1,205
Less accumulated depreciation	Less accumulated depreciation	644		591		Less accumulated depreciation	681		662
Total other property and equipment, net	Total other property and equipment, net	555		611		Total other property and equipment, net	547		543
Total property and equipment, net	Total property and equipment, net	8,794		8,399		Total property and equipment, net	8,857		8,814
OPERATING LEASE ASSETS	OPERATING LEASE ASSETS	750		804		OPERATING LEASE ASSETS	767		729
OTHER ASSETS	OTHER ASSETS					OTHER ASSETS
Investment securities	Investment securities	1		2		Investment securities	110		39
Restricted cash	Restricted cash	59		51		Restricted cash	67		59
Intangible assets, net of accumulated amortization of $392 and $360, at September 30, 2021 and December 31, 2020, respectively.		283		261
Intangible assets, less accumulated amortization (2022-$417; 2021-$405)						Intangible assets, less accumulated amortization (2022-$417; 2021-$405)	274		284
Other	Other	492		544		Other	456		470
Total other assets	Total other assets	835		858		Total other assets	907		852
TOTAL ASSETS	TOTAL ASSETS	$	14,069	$	13,406	TOTAL ASSETS	$	13,803	$	13,642

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Accounts payable	Accounts payable	$	575	$	365	Accounts payable	$	624	$	499
Air traffic liability	Air traffic liability	1,679		1,122		Air traffic liability	1,939		1,618
Accrued salaries, wages and benefits	Accrued salaries, wages and benefits	465		409		Accrued salaries, wages and benefits	478		480
Other accrued liabilities	Other accrued liabilities	348		215		Other accrued liabilities	496		359
Current operating lease liabilities	Current operating lease liabilities	108		113		Current operating lease liabilities	108		106
Current maturities of long-term debt and finance lease obligations	Current maturities of long-term debt and finance lease obligations	391		450		Current maturities of long-term debt and finance lease obligations	381		355
Total current liabilities	Total current liabilities	3,566		2,674		Total current liabilities	4,026		3,417
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,760		4,413		LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,545		3,651
LONG-TERM OPERATING LEASE LIABILITIES	LONG-TERM OPERATING LEASE LIABILITIES	712		752		LONG-TERM OPERATING LEASE LIABILITIES	726		690
DEFERRED TAXES AND OTHER LIABILITIES	DEFERRED TAXES AND OTHER LIABILITIES					DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes	Deferred income taxes	882		922		Deferred income taxes	702		843
Air traffic liability - non-current	Air traffic liability - non-current	618		616		Air traffic liability - non-current	655		640
Other	Other	582		78		Other	551		552
Total deferred taxes and other liabilities	Total deferred taxes and other liabilities	2,082		1,616		Total deferred taxes and other liabilities	1,908		2,035
COMMITMENTS AND CONTINGENCIES (Note 6)	COMMITMENTS AND CONTINGENCIES (Note 6)	0		0		COMMITMENTS AND CONTINGENCIES (Note 6)	0		0
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY					STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued	Preferred stock, $0.01 par value; 25 shares authorized, none issued	—		—		Preferred stock, $0.01 par value; 25 shares authorized, none issued	—		—
Common stock, $0.01 par value; 900 shares authorized, 476 and 474 shares issued and 318 and 316 shares outstanding at September 30, 2021 and December 31, 2020, respectively		5		5
Treasury stock, at cost; 158 and 158 shares at September 30, 2021 and December 31, 2020, respectively		(1,989)		(1,981)
Common stock, $0.01 par value; 900 shares authorized, 479 and 478 shares issued and 321 and 320 shares outstanding at March 31, 2022 and December 31, 2021, respectively						Common stock, $0.01 par value; 900 shares authorized, 479 and 478 shares issued and 321 and 320 shares outstanding at March 31, 2022 and December 31, 2021, respectively	5		5
Treasury stock, at cost; 158 and 158 shares at March 31, 2022 and December 31, 2021, respectively						Treasury stock, at cost; 158 and 158 shares at March 31, 2022 and December 31, 2021, respectively	(1,995)		(1,989)
Additional paid-in capital	Additional paid-in capital	3,018		2,959		Additional paid-in capital	3,058		3,047
Retained earnings	Retained earnings	2,915		2,968		Retained earnings	2,531		2,786
Accumulated other comprehensive income		—		—
Accumulated other comprehensive (loss)						Accumulated other comprehensive (loss)	(1)		—
Total stockholders’ equity	Total stockholders’ equity	3,949		3,951		Total stockholders’ equity	3,598		3,849
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,069	$	13,406	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,803	$	13,642

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
OPERATING REVENUES	OPERATING REVENUES									OPERATING REVENUES
Passenger	Passenger	$	1,856	$	445	$	3,913	$	2,126	Passenger	$	1,603	$	670
Other	Other	116		47		290		169		Other	133		63
Total operating revenues	Total operating revenues	1,972		492		4,203		2,295		Total operating revenues	1,736		733
OPERATING EXPENSES	OPERATING EXPENSES									OPERATING EXPENSES
Aircraft fuel and related taxes	Aircraft fuel and related taxes	443		102		973		496		Aircraft fuel and related taxes	571		193
Salaries, wages and benefits	Salaries, wages and benefits	620		482		1,718		1,560		Salaries, wages and benefits	688		521
Landing fees and other rents	Landing fees and other rents	182		84		470		258		Landing fees and other rents	132		115
Depreciation and amortization	Depreciation and amortization	140		127		398		407		Depreciation and amortization	143		125
Aircraft rent	Aircraft rent	25		23		76		60		Aircraft rent	26		25
Sales and marketing	Sales and marketing	60		24		130		84		Sales and marketing	57		23
Maintenance, materials and repairs	Maintenance, materials and repairs	205		111		472		344		Maintenance, materials and repairs	152		104
Other operating expenses	Other operating expenses	297		167		768		560		Other operating expenses	334		210
Special items	Special items	(186)		(112)		(841)		(214)		Special items	—		(289)
Total operating expenses	Total operating expenses	1,786		1,008		4,164		3,555		Total operating expenses	2,103		1,027
OPERATING INCOME (LOSS)		186		(516)		39		(1,260)
OPERATING LOSS										OPERATING LOSS	(367)		(294)
OTHER INCOME (EXPENSE)	OTHER INCOME (EXPENSE)									OTHER INCOME (EXPENSE)
Interest expense	Interest expense	(42)		(56)		(153)		(121)		Interest expense	(37)		(58)
Capitalized interest		3		3		9		10
Gain on equity investments		54		—		54		—
Interest income and other expenses		(11)		(9)		(49)		(10)
Interest income										Interest income	4		4
Gain on investments, net										Gain on investments, net	2		4
Other										Other	—		(3)
Total other income (expense)	Total other income (expense)	4		(62)		(139)		(121)		Total other income (expense)	(31)		(53)
INCOME (LOSS) BEFORE INCOME TAXES		190		(578)		(100)		(1,381)
Income tax expense (benefit)		60		(185)		(47)		(400)
NET INCOME (LOSS)		$	130	$	(393)	$	(53)	$	(981)
LOSS BEFORE INCOME TAXES										LOSS BEFORE INCOME TAXES	(398)		(347)
Income tax benefit										Income tax benefit	(143)		(100)
NET LOSS										NET LOSS	$	(255)	$	(247)

EARNINGS (LOSS) PER COMMON SHARE:
LOSS PER COMMON SHARE:										LOSS PER COMMON SHARE:
Basic	Basic	$	0.41	$	(1.44)	$	(0.17)	$	(3.58)	Basic	$	(0.79)	$	(0.78)
Diluted	Diluted	$	0.40	$	(1.44)	$	(0.17)	$	(3.58)	Diluted	$	(0.79)	$	(0.78)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

(unaudited, in millions)

Three Months Ended September 30,
2021 2020
NET INCOME (LOSS) $ 130 $ (393)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $(1) in 2021 and 2020, respectively — 1
Total other comprehensive income — 1
COMPREHENSIVE INCOME (LOSS) $ 130 $ (392)


	Three Months Ended March 31,
	2022		2021
NET LOSS	$	(255)	$	(247)
Changes in fair value of available-for-sale securities, net of reclassifications into earnings, net of deferred taxes of $0 and $0 in 2022 and 2021, respectively	(1)		—
Total other comprehensive loss	(1)		—
COMPREHENSIVE LOSS	$	(256)	$	(247)

Nine Months Ended September 30,
2021 2020
NET LOSS $ (53) $ (981)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $1 in 2021 and 2020, respectively — (4)
Total other comprehensive income (loss) — (4)
COMPREHENSIVE LOSS $ (53) $ (985)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	Net loss	$	(53)	$	(981)	Net loss	$	(255)	$	(247)
Adjustments to reconcile net loss to net cash provided by operating activities:	Adjustments to reconcile net loss to net cash provided by operating activities:					Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	Deferred income taxes	(40)		(351)		Deferred income taxes	(141)		(97)
Impairment of long-lived assets		—		258

Depreciation	Depreciation	365		374		Depreciation	130		117
Amortization	Amortization	33		33		Amortization	13		8
Stock-based compensation	Stock-based compensation	23		20		Stock-based compensation	11		8
Changes in certain operating assets and liabilities	Changes in certain operating assets and liabilities	1,438		242		Changes in certain operating assets and liabilities	499		304
Deferred federal payroll support program grants	Deferred federal payroll support program grants	—		49		Deferred federal payroll support program grants	—		87
Losses on sale-leaseback transactions		—		106
Other, net	Other, net	(11)		27		Other, net	(10)		(3)
Net cash provided by (used in) operating activities		1,755		(223)
Net cash provided by operating activities						Net cash provided by operating activities	247		177
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(770)		(529)		Capital expenditures	(85)		(211)
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	(33)		(67)		Predelivery deposits for flight equipment	(49)		(6)
Purchase of held-to-maturity investments						Purchase of held-to-maturity investments	(63)		—

Proceeds from the maturities of held-to-maturity investments		—		21
Purchase of available-for-sale securities	Purchase of available-for-sale securities	(520)		(1,162)		Purchase of available-for-sale securities	(290)		—
Proceeds from the sale of available-for-sale securities	Proceeds from the sale of available-for-sale securities	590		944		Proceeds from the sale of available-for-sale securities	153		270
Proceeds from sale-leaseback transactions		—		209

Other, net	Other, net	(2)		(1)		Other, net	—		(1)
Net cash used in investing activities		(735)		(585)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	(334)		52
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	1,010		2,541		Proceeds from issuance of long-term debt	—		855
Proceeds from short-term borrowings		—		981
Proceeds from sale-leaseback transactions		—		236
Proceeds from issuance of common stock		22		22

Proceeds from issuance of stock warrants	Proceeds from issuance of stock warrants	14		28		Proceeds from issuance of stock warrants	—		8
Repayment of long-term debt and finance lease obligations	Repayment of long-term debt and finance lease obligations	(1,775)		(272)		Repayment of long-term debt and finance lease obligations	(83)		(644)
Repayment of short-term borrowings		—		(1,000)

Acquisition of treasury stock	Acquisition of treasury stock	(7)		(167)		Acquisition of treasury stock	(6)		(6)
Other, net	Other, net	(1)		—		Other, net	—		(1)
Net cash (used in) provided by financing activities		(737)		2,369
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		283		1,561
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(89)		212
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH						INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(176)		441
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,969		1,018		Cash, cash equivalents and restricted cash at beginning of period	2,077		1,969
Cash, cash equivalents and restricted cash at end of period(1)	Cash, cash equivalents and restricted cash at end of period(1)	$	2,252	$	2,579	Cash, cash equivalents and restricted cash at end of period(1)	$	1,901	$	2,410

SUPPLEMENTAL CASH FLOW INFORMATION						SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest						Cash payments for interest	$	20	$	40

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

Nine Months Ended September 30,
2021 2020
SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest (net of amount capitalized) $ 121 $ 37
Cash payments for income taxes (net of refunds) — —
NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for operating lease liabilities $ — $ 144
Lease modifications and lease conversions $ 40 $ —
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
September 30, 2021 September 30, 2020
Cash and cash equivalents $ 2,193 $ 2,453
Short-term restricted cash recorded within prepaid expenses and other — 74
Restricted cash 59 52
Total cash, cash equivalents and restricted cash $ 2,252 $ 2,579


	Three Months Ended March 31,
	2022		2021
Cash payments for income taxes (net of refunds)	1		—

NON-CASH TRANSACTIONS
Operating lease assets obtained under operating leases	$	59	$	—

(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	1,834	$	2,358

Restricted cash(2)	67		52
Total cash, cash equivalents and restricted cash	$	1,901	$	2,410

(2) Restricted cash primarily consists of security deposits, funds held in escrow for estimated workers’ compensation obligations, and performance bonds for aircraft and facility leases.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited, in millions)

Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income Total
Balance at June 30, 2021 476 $ 5 158 $ (1,989) $ 3,012 $ 2,785 $ — $ 3,813
Net income — — — — — 130 — 130
Stock compensation expense — — — — 6 — — 6
Balance at September 30, 2021 476 $ 5 158 $ (1,989) $ 3,018 $ 2,915 $ — $ 3,949
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Loss Total
Balance at June 30, 2020 430 $ 4 158 $ (1,981) $ 2,340 $ 3,734 $ (3) $ 4,094
Net (loss) — — — — — (393) — (393)
Other comprehensive income — — — — — — 1 1
Vesting of restricted stock units 1 — — — — — — —
Stock compensation expense — — — — 5 — — 5
CARES Act warrant issuance — — — — 10 — — 10
Balance at September 30, 2020 431 $ 4 158 $ (1,981) $ 2,355 $ 3,341 $ (2) $ 3,717
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income Total
Balance at December 31, 2020 474 $ 5 158 $ (1,981) $ 2,959 $ 2,968 $ — $ 3,951
Net (loss) — — — — — (53) — (53)
Vesting of restricted stock units 1 — — (8) — — — (8)
Stock compensation expense — — — — 23 — — 23
Stock issued under Crewmember Stock Purchase Plan 1 — — — 22 — — 22
Warrants issued under federal support programs — — — — 14 — — 14
Balance at September 30, 2021 476 $ 5 158 $ (1,989) $ 3,018 $ 2,915 $ — $ 3,949
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income (Loss) Total
Balance at December 31, 2019 427 $ 4 145 $ (1,782) $ 2,253 $ 4,322 $ 2 $ 4,799
Net (loss) — — — — — (981) — (981)
Other comprehensive loss — — — — — — (4) (4)
Vesting of restricted stock units 2 — — (7) — — — (7)
Stock compensation expense — — — — 20 — — 20
Stock issued under Crewmember Stock Purchase Plan 2 — — — 22 — — 22
Shares repurchased — — 13 (192) 32 — — (160)
CARES Act warrant issuance — — — — 28 — — 28
Balance at September 30, 2020 431 $ 4 158 $ (1,981) $ 2,355 $ 3,341 $ (2) $ 3,717


	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2021	478	$	5	158	$	(1,989)	$	3,047	$	2,786	$	—	$	3,849
Net loss	—	—		—	—		—		(255)		—		(255)
Other comprehensive (loss)	—	—		—	—		—		—		(1)		(1)
Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		11		—		—		11
Balance at March 31, 2022	479	$	5	158	$	(1,995)	$	3,058	$	2,531	$	(1)	$	3,598

	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Balance at December 31, 2020	474	$	5	158	$	(1,981)	$	2,959	$	2,968	$	—	$	3,951
Net loss	—	—		—	—		—		(247)		—		(247)

Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		8		—		—		8
Warrants issued under federal support programs	—	—		—	—		8		—		—		8
Balance at March 31, 2021	475	$	5	158	$	(1,987)	$	2,975	$	2,721	$	—	$	3,714

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Summary of Significant Accounting Policies

Basis of Presentation

JetBlue Airways Corporation, or JetBlue, provides air transportation services across the United States, the Caribbean and Latin ~~America,~~America, and between New York and London. ~~Our~~Our condensed consolidated financial statements include the accounts of JetBlue and our subsidiaries which are collectively referred to as “we” or the “Company”. All majority-owned subsidiaries are consolidated on a line by line basis, with all intercompany transactions and balances being eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with our ~~2020~~2021 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, or our ~~2020~~2021 Form 10-K.

These condensed consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the U.S. Securities and Exchange Commission, or the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading.

Due to the ongoing impacts from the coronavirus ("COVID-19") pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, and other factors, our operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year.

Investment Securities

Investment securities consist of available-for-sale investment securities, ~~and~~ held-to-maturity investment securities, and equity securities. When sold, we use a specific identification method to determine the cost of the securities.

Available-for-sale investment securities. Our available-for-sale investment securities include investments such as time deposits, ~~equity securities of publicly traded companies,~~U.S. Treasury bills with maturities between three and twelve months, commercial paper, and convertible debt securities. Our investments in equity securities of publicly traded companies are classified as Level 1 in the fair value hierarchy as their fair values are based on unadjusted quoted prices in active markets for identical assets.

The fair values of ~~our time deposits and convertible debt securities~~these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the fair value hierarchy. We did not record any material gains or losses on these securities during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 or ~~2020.~~2021. Refer to Note 87 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities. Our held-to-maturity investment securities consist of investment-grade interest bearing instruments, such as corporate bonds and U.S. Treasury notes, which are stated at amortized cost. We ~~did~~do not ~~have any held-to-maturity~~intend to sell these investment securities and the contractual maturities are not greater than 24 months. Those with maturities less than twelve months are included in short-term investments ason our consolidated balance sheets. Those with remaining maturities in excess of ~~September 30, 2021 and December 31, 2020.~~twelve months are included in long-term investments on our consolidated balance sheets. We did not record any material gains or losses on these securities during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 or ~~2020.~~2021.

Equity investment securities. Our equity investment securities include investments in common stocks of publicly traded companies which are stated at fair value. We recognized a net unrealized loss of $2 million on these securities during the three months ended March 31, 2022. No gains or losses were recorded during the same period in 2021.

The aggregate carrying values of our short-term and long-term investment securities consisted of the following at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in millions):

September 30, 2021 December 31, 2020
Available-for-sale securities
Time deposits $ 1,060 $ 1,130
Equity securities 36 —
Debt securities 5 7
Total available-for-sale securities 1,101 1,137
Total investment securities $ 1,101 $ 1,137

~~Other Investments~~

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC, or JTV, has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Accounting Standards Update ("ASU") 2016-01, ~~Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	March 31, 2022		December 31, 2021
Available-for-sale investment securities
Time deposits	$	865	$	790
Commercial paper	61		2
Debt securities	10		8
Total available-for-sale investment securities	936		800
Held-to-maturity investment securities
Corporate bonds	100		37
Total held-to-maturity investment securities	100		37
Equity investment securities	24		26
Total investment securities	$	1,060	$	863

Other Investments

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC, or JTV, has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification"), we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The carrying amount of these investments, which is included within other assets on our consolidated balance sheet, was ~~$67~~$73 million and ~~$40~~$72 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. We ~~recognized a gain of $37 million~~did not record any material gains or losses on these investments during the three ~~and nine~~ months ended September 30, 2021. The gain was triggered by an observable transaction for a similar security issued by a company within the JTV investment portfolio which indicated a change in overall valuation. We estimated the fair value of our investment in the company using third party valuationsMarch 31, 2022 and considered specific circumstances such as our expectation of a potential exit from the company, prices from previous issuances of equity securities, the rights and obligations of holders of similar securities within the company, and estimates of volatility. Due to the use of significant unobservable inputs, our investment is classified as Level 3 in the fair value hierarchy. In August 2021, we recognized a one-time gain of $17 million in connection with the initial public offering of a company within the JTV investment portfolio. The carrying value of this investment, which is included within short-term investment securities on our consolidated balance sheet, ~~was $36 million as of~~ ~~September 30,~~ 2021.

We have an approximate 10% ownership interest in the TWA Flight Center Hotel at John F. Kennedy International Airport and it is also accounted for under the measurement alternative. The carrying amount of this investment was $14 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Equity Method Investments

Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the ~~Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification").~~FASB Codification. The carrying amount of our equity method investments was ~~$33~~$37 million an~~d $34~~and $32 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and is included within other assets on our consolidated balance sheets.

~~Recently Adopted Accounting Standards~~

~~New accounting rules and disclosure requirements can impact our financial results and the comparability~~ In March 2022, we recognized a gain of $3 million on one of our financial statements. The authoritative literature which has recently been issued and that we believe will impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update eliminates, clarifies, and modifies certain guidance~~equity method investments related to its issuance of additional shares upon the ~~accounting for income taxes. We adopted the requirements~~closing of ~~ASU 2019-12 as of January 1, 2021. The adoption of ASU 2019-12 did not have~~ a ~~material impact on our condensed consolidated financial statements.~~subsequent financing round.

~~In August 2020, the FASB issued ASU 2020-06,~~ Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ~~("ASU 2020-06")~~. This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and it is effective for interim and annual reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020. We adopted the requirements of ASU 2020-06 as of January 1, 2021. The adoption did not have an impact on our condensed consolidated financial statements as we did not have any convertible instruments outstanding as of December 31, 2020. As discussed in Note 3 to our condensed consolidated financial statements, in March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. We evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, ~~Derivatives and Hedging, and the substantial premium model in accordance with ASC 470,~~ ~~Debt~~. Based on our assessment, we concluded that separate accounting for the conversion feature of this note offering is not required. The carrying value of this convertible note was included within long-term debt and finance lease obligations on our consolidated balance sheet as of September 30, 2021.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Note 2— Revenue Recognition

The Company categorizes the revenues received from contracts with its customers by revenue source as we believe it best depicts the nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenues recognized by revenue source for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Passenger revenue	Passenger revenue									Passenger revenue
Passenger travel	Passenger travel	$	1,773	$	420	$	3,717	$	1,973	Passenger travel	$	1,490	$	625
Loyalty revenue - air transportation	Loyalty revenue - air transportation	83		25		196		153		Loyalty revenue - air transportation	113		45
Other revenue	Other revenue									Other revenue
Loyalty revenue	Loyalty revenue	80		38		206		127		Loyalty revenue	88		45
Other revenue	Other revenue	36		9		84		42		Other revenue	45		18
Total revenue	Total revenue	$	1,972	$	492	$	4,203	$	2,295	Total revenue	$	1,736	$	733

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred.

~~In June 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with Barclaycard~~®Loyalty revenue ~~(the "Co-Brand Agreement"). The Co-Brand Agreement, which amends and restates the existing Barclaycard~~® ~~Co-Brand Agreement, extends the term to 2031 and modifies certain~~within other ~~terms. The terms~~revenue is primarily comprised of the ~~Co-Brand Agreement are effective as of January 1, 2021. The performance obligations such as air transportation; use~~non-air transportation elements of the ~~JetBlue brand name, and access to~~sales of our frequent flyer customer lists; advertising; and other airline benefits are consistent with the previous agreement. We continue to use the accounting method that allocates the consideration received based on the relative selling prices of those performance obligations. The increase in loyalty program revenues are primarily related to brand and non-air transportation elements. In addition, in July 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with MasterCardTrueBlue® ~~to continue our partnership as network provider under the Co-Brand Agreement.~~points.

Contract Liabilities

Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Air traffic liability - passenger travel	Air traffic liability - passenger travel	$	1,416	$	964	Air traffic liability - passenger travel	$	1,643	$	1,323

Air traffic liability - loyalty program and deferred revenue		1,473		825
Air traffic liability - loyalty program (air transportation)						Air traffic liability - loyalty program (air transportation)	912		891
Deferred revenue(1)						Deferred revenue(1)	595		613
Total	Total	$	2,889	$	1,789	Total	$	3,150	$	2,827

(1) Deferred revenue is included within other accrued liabilities and other liabilities on our consolidated balance sheets.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we recognized passenger ~~rev~~revenue of ~~enue of $468~~$709 millionand ~~$697~~$237 million respectively, that was included in passenger travel liability at the beginning of the respective periods.

The Company elected the practical expedient that allows entities to not disclose the amount of the remaining transaction price and its expected timing of recognition for passenger tickets if the contract has an original expected duration of one year or less or if certain other conditions are met. We elected to apply this practical expedient to our contract liabilities relating to passenger travel and ancillary services as our tickets or any related passenger credits generally expire one year from the date of issuance.

TrueBlue® points are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of the points that were part of the air traffic liability balance at the beginning of the period as well as points that were issued during the period.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


Balance at December 31, 2021	$	891
TrueBlue® points redeemed	(113)
TrueBlue® points earned and sold	134
Balance at March 31, 2022	$	912

Balance at December 31, 2020	$	733
TrueBlue® points redeemed	~~(196)~~(45)
TrueBlue® points earned and sold	~~308~~70
Balance at ~~September 30,~~March 31, 2021	$	~~845~~

~~Balance at December 31, 2019~~	$	~~661~~
~~TrueBlue~~® ~~points redeemed~~	~~(153)~~
~~TrueBlue~~® ~~points earned and sold~~	~~195~~
~~Balance at September 30, 2020~~	$	~~703~~758

The timing of our TrueBlue® point redemptions can vary; however, the majority of our points are redeemed within approximately three years of the date of issuance.

Note 3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations

During the three months ended March 31, 2022, we made principal payments of $83 million on our outstanding debt and finance lease obligations.

We had pledged aircraft, engines, other equipment, and facilities with a net book value of $5.6 billion at March 31, 2022 as security under various financing arrangements.

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Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Note 3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations~~

~~During the nine months ended September 30, 2021, we made payments of $1.8 billion on our outstanding debt and finance lease obligations and issued $1.0 billion of~~ ~~additional debt.~~

~~We had pledged aircraft, engines, other equipment, and facilities with a net book value of $5.9 billion at September 30, 2021 as security under various financing arrangements.~~

At ~~September 30, 2021,~~March 31, 2022, scheduled maturities of our long-term debt and finance lease obligations were ~~$130~~$267 million for the remainder of ~~2021, $355~~2022, $557 million ~~in 2022, $564 million~~ in 2023, ~~$332~~$332 million in 2024, ~~$192~~$192 million in 2025, $929 million in 2026, and ~~$2.6~~$1.6 billion thereafter.

The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were as follows (in millions):


		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
		Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)			Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)
Public Debt	Public Debt									Public Debt
Fixed rate special facility bonds, due through 2036	Fixed rate special facility bonds, due through 2036	$	42	$	46	$	42	$	45	Fixed rate special facility bonds, due through 2036	$	42	$	44	$	42	$	45
Fixed rate enhanced equipment notes:	Fixed rate enhanced equipment notes:									Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032	2019-1 Series AA, due through 2032	547		464		560		440		2019-1 Series AA, due through 2032	532		398		532		442
2019-1 Series A, due through 2028	2019-1 Series A, due through 2028	170		157		174		152		2019-1 Series A, due through 2028	166		141		166		150
2019-1 Series B, due through 2027	2019-1 Series B, due through 2027	101		132		107		139		2019-1 Series B, due through 2027	95		113		94		121
2020-1 Series A, due through 2032	2020-1 Series A, due through 2032	607		675		627		658		2020-1 Series A, due through 2032	587		566		587		634
2020-1 Series B, due through 2028	2020-1 Series B, due through 2028	161		215		170		223		2020-1 Series B, due through 2028	153		183		153		199
Non-Public Debt	Non-Public Debt									Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023	Fixed rate enhanced equipment notes, due through 2023	88		89		114		116		Fixed rate enhanced equipment notes, due through 2023	66		65		88		88
Fixed rate equipment notes, due through 2028	Fixed rate equipment notes, due through 2028	675		680		891		1,017		Fixed rate equipment notes, due through 2028	575		519		620		706
Floating rate equipment notes, due through 2028	Floating rate equipment notes, due through 2028	115		111		152		144		Floating rate equipment notes, due through 2028	89		83		103		99
Floating rate term loan credit facility, due through 2024		—		—		702		759
2020 sale-leaseback transactions, due through 2024										2020 sale-leaseback transactions, due through 2024	346		358		347		374
Unsecured CARES Act Payroll Support Program loan, due through 2030	Unsecured CARES Act Payroll Support Program loan, due through 2030	259		224		259		207		Unsecured CARES Act Payroll Support Program loan, due through 2030	259		188		259		219
Secured CARES Act Loan, due through 2025		—		—		104		104
Citibank line of credit, due through 2023		—		—		546		533
2020 sale-leaseback transactions, due through 2024		348		382		352		393
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		124		—		—		Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		104		144		121
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031										Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	132		95		132		111
0.50% convertible senior notes due 2026	0.50% convertible senior notes due 2026	735		680		—		—		0.50% convertible senior notes due 2026	737		628		736		673
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031		132		114		—		—
Total(1)	Total(1)	$	4,124	$	4,093	$	4,800	$	4,930	Total(1)	$	3,923	$	3,485	$	4,003	$	3,982

(1) Total excludes finance lease obligations of $273 million and ~~$63~~$3 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(2) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair ~~values of our enhanced equipment notes and our special facility bonds were based on quoted market prices in markets with low trading volumes. The fair~~ value of our non-public debt ~~was~~are estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. ~~The fair values of our other financial instruments approximate their carrying values.~~ Refer to Note 87 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

We have financed certain aircraft with Enhanced Equipment Trust Certificates, or EETCs. One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity, or VIE, as defined in ~~the~~Topic 810, ~~Consolidations~~Consolidation ~~topic~~ of the FASB Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.

~~0.50% Convertible Senior Notes due 2026~~

In March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. The notes are general senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were approximately $734 million.

Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share.
The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends and certain issuer tender or exchange offers.

Upon conversion, the notes will be settled in cash up to the aggregate principal amount of the notes to be converted and, at our election, in shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.

We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.

As discussed in Note 1 to our condensed consolidated financial statements, we early adopted the provisions of ASU 2020-06. Accordingly, we evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, ~~Derivatives and Hedging,~~ ~~and the substantial premium model in accordance with ASC 470,~~ ~~Debt. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.~~

Interest expense of $2 million and $4 million were recognized for the three and nine months ended September 30, 2021, respectively. Included within interest expense were $1 million and $2 million of debt issuance costs amortization for the three and nine months ended September 30, 2021, respectively.

~~Floating Rate Term Loan Credit Facility~~

On June 17, 2020, we entered into a $750 million term loan credit facility with Barclays Bank PLC, as administrative agent (the "Term Loan"). The loans thereunder bore interest at a variable rate equal to LIBOR (subject to a 1.00% floor), or at our election, another rate, in each case, plus a specified margin. Our obligations were secured on a senior basis by airport takeoff and landing slots at LaGuardia Airport, John F. Kennedy International Airport, and Reagan National Airport and the right to use certain intellectual property assets comprising the JetBlue brand.

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Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On June 17, 2021, the Company voluntarily repaid a portion of its outstanding borrowings under the Term Loan. On June 30, 2021, the Company repaid the full remaining amount of outstanding borrowings under the Term Loan, which, together with its repayment of June 17, 2021, totaled approximately $722 million, plus accrued interest and associated fees. As of June 30, 2021, all obligations under the Term Loan, including all pledges of collateral were terminated in full. As of September 30, 2021, we did not have a balance outstanding under the Term Loan.

Federal Payroll Support Programs

As a result of the adverse economic impact of COVID-19, we have received assistance under various payroll support programs provided by the federal government.

CARES Act – Payroll Support Program

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Under the CARES Act, assistance was made available to the aviation industry in the form of direct payroll support (the "Payroll Support Program") and secured loans (the "Loan Program").

On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act with the United States Department of the Treasury ("Treasury") governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with a total of approximately $963 million (the "Payroll Support Payments") consisting of $704 million in grants and $259 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable Secured Overnight Financing Rate ("SOFR") plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share.

Consolidated Appropriations Act – Payroll Support Program 2

On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with Treasury governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2"). Treasury provided us with a total of approximately $580 million (the "Payroll Support 2 Payments") under the program, consisting of $436 million in grants and $144 million in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until January 15, 2026, and the applicable SOFR plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.

American Rescue Plan Act – Payroll Support Program 3

On May 6, 2021, we entered into a Payroll Support 3 Agreement (the "PSP3 Agreement") with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the "Payroll Support Program 3"). Treasury provided us with a total of approximately $541 million (the "Payroll Support 3 Payments") under the program, consisting of $409 million in grants and $132 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million shares of our common stock to Treasury at an exercise price of $19.90 per share.

The warrants associated with each of the payroll support programs described above will expire ~~five~~5 years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.

The carrying values relating to the payroll support grants were recorded within other accrued liabilities and were recognized as a contra-expense within special items on our consolidated statements of operations as the funds were utilized. The relative fair value of the warrants were recorded within additional paid-in capital and reduced the total carrying value of the grants. Proceeds from the payroll support grants and from the issuance of payroll support warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. Our funding from all payroll support grants ~~were~~has been fully utilized ~~as of~~since September 30, 2021.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

The carrying values relating to the unsecured payroll support loans were recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our condensed consolidated statement of cash flows.

CARES Act – Secured Loan Program

Under the CARES Act Loan Program, JetBlue had the ability to borrow up to a total of approximately $1.9 billion from Treasury. We entered into a loan and guarantee agreement (the "Loan Agreement") with Treasury and made an initial drawing

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

of $115 million under the CARES Act Loan Program on September 29, 2020. In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.

On September 15, 2021, the Company repaid the full amount of outstanding borrowings under the Loan Agreement, which, together with accrued interest and fees, totaled approximately $118 million. As of ~~September 30, 2021,~~March 31, 2022, we did not have a balance outstanding and all obligations under the Loan Agreement, including all pledges of collateral, were terminated in full.

~~Fixed Rate Enhanced Equipment~~0.50% Convertible Senior Notes due 2026

~~2020-1A and B Equipment Notes~~

In ~~August 2020,~~March 2021, we completed a ~~public placement~~private offering for $750 million of ~~equipment~~0.50% convertible notes due 2026. The notes are general unsecured senior obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were approximately $734 million.

Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends and certain issuer tender or exchange offers.

Upon conversion, the notes will be settled in cash up to the aggregate principal amount of ~~$808 million secured by 24 Airbus A321 aircraft. The equipment~~the notes ~~were issued~~to be converted and, at our election, in ~~two series: (i) Series A, bearing~~shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.

We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the rate of 4.00% per annum in the aggregate principal amount equal to $636 million, and (ii) Series B, bearing interest at the rate of 7.75% per annum in the aggregate principal amount equal to $172 million. Principal and interest are payable semi-annually in arrears.

~~2019-1B Equipment Notes~~

In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $115 million bearing interest at a rate of 8.00% per annum. These equipment notes are secured by 25 Airbus A321 aircraft, which were included in the collateral poollast reported sale price of our ~~2019-1 Series AA~~common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and ~~Series A offerings completed~~including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.

We evaluated the conversion feature of this note offering for embedded derivative in ~~November 2019. Principal~~accordance with Topic 815, Derivatives and ~~interest are payable semi-annually~~Hedging of the FASB Codification, and the substantial premium model in ~~arrears.~~

~~2020 Sale-Leaseback Transactions~~

~~In 2020, we executed $563 million~~accordance with Topic 470, Debt of ~~aircraft sale-leaseback transactions. Of these transactions, $354 million did not qualify as sales for accounting purposes. The assets associated with these transactions remain~~the FASB Codification. Based on our ~~consolidated balance sheets within property and equipment and~~assessment, separate accounting for the ~~related liabilities under the lease are classified within debt and finance leases obligations. These transactions are treated as cash from financing activities on our consolidated statements~~conversion feature of cash flows. The remaining $209 million of sale-leaseback transactions qualified as sales and generated a loss of $106 million. The assets associated with these transactions which qualified as sales are recorded within operating lease assets. The liabilities are recorded within current operating lease liabilities and long-term operating lease liabilities on our consolidated balance sheets. These transactions are treated as cash from investing activities on our consolidated statements of cash flows.this note offering is not required.

~~We did not execute any sale-leaseback transactions~~Interest expense recognized during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022 was $2 million, which included $1 million in amortization of debt issuance costs. Interest expense recognized during the three months ended March 31, 2021 was insignificant.

Short-term Borrowings

Citibank ~~Revolving~~Line of Credit ~~Agreement~~

We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent, for up to $550 ~~million (the "Revolving Facility").~~million. The term of the ~~Revolving Facility~~facility runs through August 2023. Borrowings under the ~~Revolving Facility~~Credit and Guaranty Agreement bear interest at a variable rate equal to LIBOR, plus a margin. The ~~Revolving Facility is~~Credit and Guaranty Agreement are secured by unencumbered aircraft, simulators, and certain other ~~assets as permitted thereunder.~~assets. The ~~Revolving Facility~~Credit and Guaranty Agreement includes covenants that require us to maintain certain minimum balances in unrestricted cash, cash equivalents, and unused commitments available under revolving credit facilities. In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets.

~~We borrowed~~ As of and for the ~~full amount of $550 million~~periods ended March 31, 2022 and December 31, 2021, we did not have a balance outstanding or any borrowings under this ~~revolving credit facility on April 22, 2020.~~line of credit.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

We repaid the full balance of this facility in the first quarter of 2021. As of and for the quarter ended September 30, 2021, we did not have a balance outstanding or any borrowings under the Revolving Facility.

~~Short-term Borrowings~~

Morgan Stanley Line of Credit

We have a revolving line of credit with Morgan Stanley for up to approximately $200 million. This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the amount available to us under this line of credit may vary accordingly. This line of credit bears interest at a floating rate based upon LIBOR, plus a margin. As of and for the periods ended ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we did not have a balance outstanding or any borrowings under this line of credit.

Note 4—~~Earnings (Loss)~~Loss Per Share

Basic earnings per share is calculated by dividing net (loss) income ~~(loss)~~ by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the ~~Company's~~ Crewmember Stock Purchase Plan, convertible notes, ~~warrants issued under various federal payroll support programs,~~ and any other potentially dilutive instruments using the treasury stock and if-converted methods. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts wwere ~~ere~~ ~~1.9~~2.9 million and 3.5 million for the three months ended ~~September 30, 2020. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 3.5 million~~March 31, 2022 and ~~1.7 million for the nine months ended~~ ~~September 30,~~ 2021, ~~and~~ ~~September 30, 2020, respectively~~.respectively.

The following table shows how we computed ~~basic and diluted earnings~~loss per common share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (dollars and share data in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net income (loss)		$	130	$	(393)	$	(53)	$	(981)
Net loss										Net loss	$	(255)	$	(247)

Weighted average basic shares	Weighted average basic shares	318.0		272.4		317.3		274.3		Weighted average basic shares	320.5		316.3
Effect of dilutive securities	Effect of dilutive securities	3.3		—		—		—		Effect of dilutive securities	—		—
Weighted average diluted shares	Weighted average diluted shares	321.3		272.4		317.3		274.3		Weighted average diluted shares	320.5		316.3

Earnings (loss) per common share:
Loss per common share										Loss per common share
Basic	Basic	$	0.41	$	(1.44)	$	(0.17)	$	(3.58)	Basic	$	(0.79)	$	(0.78)
Diluted	Diluted	$	0.40	$	(1.44)	$	(0.17)	$	(3.58)	Diluted	$	(0.79)	$	(0.78)

On February 24, 2020, JetBlue entered into an accelerated share repurchase agreement, or ASR, paying $160 million for an initial delivery of 6.6 million shares. The term of the ASR concluded on March 16, 2020 with a delivery of 4.9 million additional shares to JetBlue on March 18, 2020. A total of 11.5 million shares, at an average price of $13.91 per share, were repurchased under the agreement.

~~Our share repurchase program has been suspended since March 31, 2020.~~

Note 5—Crewmember Retirement Plan

We sponsor a retirement savings 401(k) defined contribution plan, or the Plan, covering all of our crewmembers where we match 100% of our crewmember contributions up to 5% of their eligible wages. The contributions vest over three years and are measured from a crewmember's hire date. Crewmembers are immediately vested in their voluntary contributions.

Another component of the Plan is a Company discretionary contribution of 5% of eligible non-management crewmember compensation, which we refer to as Retirement Plus. Retirement Plus contributions vest over three years and are measured from a crewmember's hire date.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Certain Federal Aviation Administration, or FAA, licensed crewmembers receive an additional contribution of 3% of eligible compensation, which we refer to as Retirement Advantage.

~~Effective August 1, 2018 and through December 31, 2020, our~~Our pilots ~~received~~receive a non-elective Company contribution of ~~15%~~16% of eligible pilot compensation per the terms of the finalized collective bargaining agreement between JetBlue and the Air Line Pilots Association ~~or ALPA,~~("ALPA"), in lieu of the above 401(k) Company matching contribution, Retirement Plus, and Retirement Advantage contributions. ~~This non-elective Company contribution was increased to~~ ~~16% beginning on January 1, 2021.~~ ~~Refer to Note 6 to our condensed consolidated financial statements for additional information.~~The Company's non-elective contribution of eligible pilot compensation vests after three years of service.

Our non-management crewmembers are eligible to receive profit sharing, calculated as 10% of adjusted pre-tax income before profit sharing and special items up to a pre-tax margin of 18% with the result reduced by Retirement Plus contributions and the equivalent of Retirement Plus contributions for pilots. If JetBlue's resulting pre-tax margin exceeds 18%, non-management crewmembers will receive 20% profit sharing on amounts above an 18% pre-tax margin.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Total 401(k) company match, Retirement Plus,, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the three months ended ~~September 30,~~March 31, 2022 and 2021 was $62 millionand ~~2020 were $57 million and $42 million, respectively, while the total expensed for the nine months ended September 30, 2021 and 2020 were $157 million and $135~~$48 million, respectively.

Note 6—Commitments and Contingencies

Flight Equipment Commitments

In February 2022, we exercised our option to purchase 30 additional Airbus A220-300 aircraft under our existing agreement with Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2022 to 2026. Options for 20 additional A220-300 aircraft remain available to us.

As of ~~September 30, 2021,~~March 31, 2022, our firm aircraft orders consisted of 64 Airbus A321neo aircraft and 6492 Airbus A220 aircraft, scheduled for delivery through 2027. Committed expenditures for these aircraft and related flight equipment, including estimated amounts for contractual price escalations and predelivery deposits as of ~~September 30, 2021~~March 31, 2022 is approximately ~~$0.2~~$0.7 billion for the remainder of ~~2021, $0.9 billion in~~ 2022, $1.6 billion in 2023, ~~$1.8~~$2.0 billion in 2024, ~~$1.3~~$1.7 billion in 2025, $1.4 billion in 2026, and ~~$1.9~~$1.0 billion thereafter.

The amount of committed expenditures stated above represents the current delivery schedule set forth in our Airbus order book as of March 31, 2022. In February 2022, we received notice from Airbus of anticipated delivery delays for the A220 aircraft. We expect a delivery of a maximum of 9 A220 aircraft in 2022 as a result of the delays.

In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new commercial aircraft and related parts imported from certain European Union member states, which include aircraft and other parts we are already contractually obligated to purchase, including those noted above. The U.S. Trade Representative increased the tariff to 15% effective March 2020. In March 2021, the U.S. Trade Representative announced a four-month suspension of the tariff that was followed by an announcement in June 2021 that the suspension will be extended for five years. We continue to work with our business partners, including Airbus, to evaluate the potential financial and operational impact of these announcements on our future aircraft deliveries, including after the suspension is lifted. The ~~continued~~ imposition of ~~the~~this or any tariff could substantially increase the cost of new ~~Airbus~~ aircraft and parts.

Other Commitments

We utilize several credit card processors to process our ticket sales. Our agreements with these processors do not contain covenants, but do generally allow the processor to withhold cash reserves to protect the processor from potential liability for tickets purchased, but not yet used for travel. While we currently do not have any collateral requirements related to our credit card processors, we may be required to issue collateral to our credit card processors, or other key business partners, in the future.

As of ~~September 30, 2021,~~March 31, 2022, we had approximately ~~$28~~$32 million in assets serving as collateral for letters of credit relating to a certain number of our leases. These are included in restricted cash and expire at the end of the related lease terms. Additionally, we had approximately $26 million pledged related to our workers' compensation insurance policies and other business partner agreements, which will expire according to the terms of the related policies or agreements.

~~Amid the COVID-19 pandemic, we reached an Agreement in Principle with ALPA to avoid involuntary furloughs of~~Except for our pilots ~~through~~and inflight crewmembers who are represented by the Air Line Pilots Association ("ALPA") and the Transport Workers Union of America ("TWU"), respectively, our other frontline crewmembers do not have third party representation.

In April 2021, ALPA, on behalf of the JetBlue pilot group, filed a grievance relating to the Northeast Alliance Agreement ("NEA"), an expanded codeshare and marketing alliance between JetBlue and American Airlines, Inc. ("American") at ~~least October 1,~~4 Northeast airports. ALPA claims that in entering the NEA, JetBlue violated certain scope clauses as contained in the pilots’ ALPA collective bargaining agreement. A final mediation session concluded in September 2021 and in ~~exchange for short-term~~January 2022, the parties submitted final written briefs to the System Board. Shortly after submission of the briefs, the parties agreed to enter into non-binding mediation with the assistance of the arbitrator with a temporary hold on a System Board decision. As a result of the mediation process, the parties agreed to certain changes to the collective bargaining agreement.

In The agreement, ratified by the JetBlue pilot group in April ~~2018, JetBlue inflight crewmembers elected~~2022, included a one-time payment of $30 million to be ~~solely represented by~~paid and recorded as expense in the ~~Transport Workers Union~~second quarter of America, or TWU. The National Mediation Board, or NMB, certified the TWU as the representative body for JetBlue inflight crewmembers. In November 2020, our inflight crewmembers voted to reject the tentative collective bargaining agreement between JetBlue2022 and ~~the TWU. The parties have re-engaged in negotiations for~~ a ~~collective bargaining agreement.~~3% base pay increase effective May 1, 2022.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Except~~We enter into individual employment agreements with each of our non-unionized FAA-licensed crewmembers, which include dispatchers, technicians, and inspectors, as ~~noted above,~~well as air traffic controllers. Each employment agreement is for a term of five years and automatically renews for an additional five years unless either the crewmember or we elect not to renew it by giving at least 90 days' notice before the end of the relevant term. Pursuant to these agreements, these crewmembers can only be terminated for cause. In the event of a downturn in our business that would require a reduction in work hours, we are obligated to pay these crewmembers a guaranteed level of income and to continue their benefits if they do not ~~have third party representation.~~obtain other aviation employment.

Legal Matters

Occasionally, we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters involving suppliers, ~~(business partners),~~ crewmembers, customers, and governmental agencies, arising, for the most part, in the ordinary course of business. The outcome of litigation and other legal matters is always uncertain. The Company believes it has valid defenses to the legal matters currently pending against it, is defending itself vigorously, and has recorded accruals determined in accordance with GAAP, where appropriate. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and record a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to our consolidated results of operations, liquidity, or financial condition.

To date, none of these types of litigation matters, most of which are typically covered by insurance, has had a material impact on our operations or financial condition. We have insured and continue to insure against most of these types of claims. A judgment on any claim not covered by, or in excess of, our insurance coverage could materially adversely affect our consolidated results of operations, liquidity, or financial condition.

On September 21, 2021, the United States Department of Justice (the ~~“DOJ”~~"DOJ"), along with the Attorneys General of each of the States of Arizona, California, and Florida, the Commonwealths of Massachusetts, Pennsylvania, and Virginia, and the District of Columbia, filed a lawsuit in the United States District Court for the District of Massachusetts against JetBlue ~~Airways Corporation (“JetBlue”)~~ and American, ~~Airlines, Inc. (“American”~~ and, together with JetBlue, the “Carriers”) concerning the Carriers’ previously implemented ~~Northeast Alliance (the “NEA”).~~NEA. The lawsuit asserts and seeks an adjudication that the NEA violates Section 1 of the Sherman Act, and that the Carriers be permanently enjoined from continuing and restrained from further implementing the NEA.

Also on September 21, 2021, the Department of Transportation (the "DOT") published a Clarification Notice relating to the agreement that had been reached between the DOT, JetBlue, and American in January 2021, at the conclusion of the DOT’s review of the NEA ("DOT Agreement"). The DOT Clarification Notice stated, among other things, that the DOT Agreement remains in force during the pendency of the DOJ action against the NEA and, while the DOT retains independent statutory authority to prohibit unfair methods of competition in air transportation, the DOT intends to defer to DOJ to resolve the antitrust concerns that the DOJ has identified with respect to the NEA. The DOT simultaneously published a Notice Staying Proceeding in relation to a complaint by Spirit Airlines, Inc. regarding the NEA, pending resolution of the DOJ action described above.

JetBlue believes the lawsuit is without merit and, along with American, intends to defend itself vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

~~Note 7—Financial Derivative Instruments~~ In November 2021, JetBlue and ~~Risk Management~~

~~As part of our risk management strategy, we periodically purchase over-the-counter energy derivative instruments and enter into fixed forward price agreements, or FFPs,~~American filed a motion to ~~manage our exposure to~~dismiss the ~~effect of changes in~~DOJ's lawsuit against the price of jet fuel. Prices for the underlying commodities have historically been highly correlated to jet fuel, making derivatives of them effective at providing short-term protection against volatility in average fuel prices. We also periodically enter into jet fuel basis swaps for the differential between heating oil and jet fuel, to further limit the variability in fuel prices at various locations. We do not hold or issue any derivative financial instruments for trading purposes.

~~Aircraft Fuel Derivatives~~

~~We attempt to obtain cash flow hedge accounting treatment for each fuel derivative that we enter into. This treatment is provided for under ASC 815,~~ ~~Derivatives and Hedging~~ which allows for gains and losses on qualifying hedges to be deferred until the underlying planned jet fuel consumption occurs, rather than recognizing the gains and losses on these instruments into earnings during each period they are outstanding. When the underlying jet fuel is consumedNEA. Motion practice has concluded and the ~~related derivative contract settles, any gain or loss previously recorded in other comprehensive income is recognized in aircraft fuel expense. If~~parties await a ~~hedge does not qualify for hedge accounting,~~decision, while the ~~periodic changes in its fair value are recognized in interest income and other. All cash flows related to our fuel hedging derivatives are classified as operating cash flows.~~lawsuit proceeds concurrently.

Our current approach to fuel hedging is to enter into hedges on a discretionary basis without a specific target of hedge percentage needs. We view our hedge portfolio as a form of insurance to help mitigate the impact of price volatility and protect us against severe spikes in oil prices, when possible.

~~We did not have any fuel hedging contracts outstanding as of September 30, 2021 or December 31, 2020.~~

~~The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements (dollar amounts in millions):~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Fuel derivatives
Hedge effectiveness losses recognized in aircraft fuel expense $ — $ 2 $ — $ 5
Losses on derivatives resulting from the discontinuance of hedge accounting recognized in interest income and other — 1 — 6
Hedge losses on derivatives recognized in comprehensive income — — — 11
Percentage of actual consumption economically hedged — % 27 % — % 25 %

Any outstanding derivative instrument exposes us to credit loss in connection with our fuel contracts in the event of nonperformance by the counterparties to the agreements, but we do not expect that any of our counterparties will fail to meet their obligations. The amount of such credit exposure is generally the fair value of our outstanding contracts for which we are in a receivable position. To manage credit risks we select counterparties based on credit assessments, limit our overall exposure to any single counterparty, and monitor the market position with each counterparty. Some of our agreements require cash deposits from either JetBlue or our counterparty if market risk exposure exceeds a specified threshold amount.

We have master netting arrangements with our counterparties allowing us the right of offset to mitigate credit risk in derivative transactions. The financial derivative instrument agreements we have with our counterparties may require us to fund all, or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities. The amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts. Our policy is to offset the liabilities represented by these contracts with any cash collateral paid to the counterparties.

~~There were no offsetting derivative instruments as of September 30, 2021 or December 31, 2020.~~

Note 8—7—Fair Value

Under ~~the~~Topic 820, Fair Value ~~Measurements and Disclosures~~Measurement ~~topic~~ of the FASB Codificationdisclosures are required about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows:

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - quoted prices in active markets for similar assets and liabilities, and other inputs that are observable directly or indirectly for the asset or liability; or

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in millions):


		September 30, 2021									March 31, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,616	$	50	$	—	$	1,666	Cash equivalents	$	1,128	$	15	$	—	$	1,143
Available-for-sale investment securities	Available-for-sale investment securities	36		1,065		—		1,101		Available-for-sale investment securities	—		936		—		936
Equity investment securities										Equity investment securities	24		—		—		24

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~


		December 31, 2020									December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,330	$	130	$	—	$	1,460	Cash equivalents	$	1,515	$	—	$	—	$	1,515
Available-for-sale investment securities	Available-for-sale investment securities	—		1,137		—		1,137		Available-for-sale investment securities	—		800		—		800
Equity investment securities										Equity investment securities	26		—		—		26

Refer to Note 3 to our condensed consolidated financial statements for fair value information related to our outstanding debt obligations as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Cash equivalents

Our cash equivalents include money market securities and time deposits which are readily convertible into cash, have maturities of three months or less when purchased, and are considered to be highly liquid and easily tradable. The money market securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. The fair values of remaining instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy.

Available-for-sale investment securities

Our available-for-sale investment securities include investments such as time deposits ~~equity securities of publicly traded companies,~~ and convertible debt securities. Our investments in equity securities of publicly traded companies are classified as Level 1 in the fair value hierarchy as their fair values are based on unadjusted quoted prices in active markets for identical assets. The fair values of ~~our time deposits and convertible debt securities~~these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the ~~fair value~~ hierarchy. We did not record any material gains or losses on these instruments during the three months ended March 31, 2022 and 2021.

Equity investment securities

Our equity investment securities include investments in common stocks of publicly traded companies. The fair values of these instruments are classified as Level 1 in the hierarchy as they are based on unadjusted quoted prices in active markets for identical assets. We recognized a net unrealized loss of $2 million on these securities during the three ~~and nine~~ months ended ~~September 30, 2021 and 2020.~~March 31, 2022. No gains or losses were recorded during the same period in 2021.

Other Investments

2219

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As discussed in Note 9—1 to our condensed consolidated financial statement, JTV has equity investments in emerging companies that do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the FASB Codification, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. We did not record any material gains or losses on these investments during the three months ended March 31, 2022 and 2021.

Note 8—Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in fair value of our ~~aircraft fuel derivatives which qualify for hedge accounting.~~available-for-sale securities. A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows (in millions):


	~~Aircraft Fuel Derivatives(1)(2)~~
~~Balance of accumulated income, at June 30, 2021~~	$	—
~~Reclassifications into earnings, net of deferred taxes of $0~~	—
~~Change in fair value, net of deferred taxes of $0~~	—
~~Balance of accumulated income, at September 30, 2021~~	$	—

~~Balance of accumulated (loss), at June 30, 2020~~	$	~~(3)~~
~~Reclassifications into earnings, net of deferred taxes $(1)~~	1
~~Change in fair value, net of deferred taxes of $0~~	—
~~Balance of accumulated (loss), at September 30, 2020~~	$	~~(2)~~

~~A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the nine months ended September 30, 2021 and 2020 is as follows (in millions):~~


	~~Aircraft Fuel Derivatives(1)(2)~~
~~Balance of accumulated income, at December 31, 2020~~	$	—
~~Reclassifications into earnings, net of deferred taxes of $0~~	—
~~Change in fair value, net of deferred taxes of $0~~	—
~~Balance of accumulated income, at September 30, 2021~~	$	—

~~Balance of accumulated income, at December 31, 2019~~	$	2
~~Reclassifications into earnings, net of deferred taxes $(4)~~	7
~~Change in fair value, net of deferred taxes of $5~~	~~(11)~~
~~Balance of accumulated (loss), at September30, 2020~~	$	~~(2)~~


	Available-for-sale securities(1)		Total
Balance of accumulated income, at December 31, 2021	$	—	$	—
Reclassifications into earnings, net of deferred taxes of $0	—		—
Change in fair value, net of deferred taxes of $0	(1)		(1)
Balance of accumulated (loss), at March 31, 2022	$	(1)	$	(1)

Balance of accumulated income, at December 31, 2020	$	—	$	—
Reclassifications into earnings, net of deferred taxes $0	—		—
Change in fair value, net of deferred taxes of $0	—		—
Balance of accumulated income, at March 31, 2021	$	—	$	—

(1) Reclassified to ~~aircraft fuel expense.~~interest income.

(2) In 2020, we made several capacity reductions in response to the COVID-19 pandemic. These capacity reductions led to the discontinuance of hedge accounting on a number of our aircraft fuel derivatives as the forecasted consumption of aircraft fuel was no longer probable. Losses of $1 million and $5 million that were previously deferred in other comprehensive loss were reclassified to interest income and other during the three and nine months ended September 30, 2020, respectively.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Note ~~10—~~9—Special Items

The following is a listing of special items presented on our consolidated statements of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Special Items	Special Items									Special Items
Federal payroll support grant recognition(1)	Federal payroll support grant recognition(1)	$	(186)	$	(332)	$	(830)	$	(636)	Federal payroll support grant recognition(1)	$	—	$	(288)
CARES Act employee retention credit(2)	CARES Act employee retention credit(2)	—		—		(11)		—		CARES Act employee retention credit(2)	—		(1)
Fleet impairment(3)		—		56		—		258
Severance and benefit costs(4)		—		58		—		58
Losses on sale-leaseback transactions(5)		—		106		—		106
Total	Total	$	(186)	$	(112)	$	(841)	$	(214)	Total	$	—	$	(289)

(1) As discussed in Note 3 to our condensed consolidated financial statements, we received assistance in the form of grants and unsecured loans under various federal payroll support programs. Funds under these federal payroll support programs were to be used exclusively for the continuation of payment of crewmember wages, salaries and benefits. The carrying values of the payroll support grants (after consideration of the warrants we issued) were recorded within other liabilities and were recognized as contra-expenses within special items on our consolidated statements of operations as the funds ~~are~~were utilized. We utilized ~~$186~~$288 million ~~and $830 million~~ of ~~the~~ payroll support grants for the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2021. Our payroll support grants were fully utilized as of ~~September 30,~~December 31, 2021.

(2) The Employee Retention Credit ("ERC") under the CARES Act is a refundable tax credit which encourages ~~businesses~~business to keep employees on the payroll during the COVID-19 pandemic. Eligible employers can qualify for up to $5,000 of credit for each employee based on qualified wages paid after March 12, 2020 and before January 1, 2021. The Internal Revenue Service ("IRS") subsequently issued Notice 2021-23 and Notice 2021-49 which collectively extended the ERC eligibility to cover qualified wages paid after December 31, 2020 and before January 1, 2022. Qualified wages are the wages paid to an employee

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

for the time that the employee is not providing services due to an economic hardship, specifically, either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross receipts. Our policy is to recognize the ERC when it is filed with the IRS. We recognized ~~$11~~$1 million of ERC as a contra-expense within special items on our consolidated statements of operations for the ~~nine months ended September 30, 2021. No ERC was recognized during the~~ three months ended ~~September 30,~~March 31, 2021.

~~(3) Under~~Note 10—Subsequent Event

Proposal to Acquire Spirit Airlines

On April 5 2022, we announced that we have delivered to the ~~Property, Plant, and Equipment~~ ~~topic~~board of directors of Spirit Airlines, Inc. ("Spirit") a proposal to acquire all of the ~~Codification, we are required~~outstanding shares of Spirit common stock for a per share consideration of $33.00 in cash.

We intend to ~~assess long-lived assets for impairment when events~~fund the transaction with cash on hand and ~~circumstances indicate that the assets may~~debt financing.

Any transaction with Spirit would be ~~impaired. An impairment~~subject to negotiation and execution of, ~~long-lived assets exists when the sum~~among other agreements, a definitive merger agreement between JetBlue and Spirit which would be subject to approval by each company’s Board of Directors. Completion of the ~~estimated undiscounted future cash flows expected~~transaction would be subject to ~~be generated directly by the assets are less than the book value~~customary closing conditions, including receipt of ~~the assets. Our long-lived assets include both owned~~required regulatory approvals and ~~leased properties which are classified as property and equipment, and operating lease assets on our consolidated balance sheets, respectively.~~

Our operations were adversely impacted by the unprecedented decline in demand for travel caused by the COVID-19 pandemic. To determine if impairment exists in our fleet, we grouped our aircraft by fleet-type and estimated their future cash flows based on projectionsapproval of capacity, aircraft age, maintenance requirements, and other relevant conditions. Based on the assessment, we determined the future cash flows from the operation of our Embraer E190 fleet were lower than the carrying value. For those aircraft, including the ones that are under operating lease, and related spare parts in our Embraer E190 fleet, we recorded an impairment loss of $56 million and $258 million for the three and nine months ended September 30, 2020, respectively. These losses represent the difference between the book value of these assets and their fair value. We estimated the fair value of our Embraer E190 fleet using third party valuations and considered specific circumstances such as aircraft age, maintenance requirements and condition, and therefore classified as Level 3 in the fair value hierarchy. We evaluated the remaining fleet and determined the future cash flows of our Airbus A320 and Airbus A321 fleet exceeded their carrying value as of September 30, 2021.

~~No impairment loss was recorded for the three and nine months ended September 30, 2021.~~Spirit’s shareholders.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~As the extent of the ongoing impact from the COVID-19 pandemic remains uncertain, we will update our assessment as new information becomes available.~~

(4) The unprecedented declines in demand and in our capacity caused by COVID-19 has led to a significant reduction to our staffing needs. In June 2020, we announced voluntary separation programs which allowed eligible crewmembers the opportunity to voluntarily separate from the Company in exchange for severance, health coverage for a specified period of time, and travel privileges based on years of service. Virtually all of our crewmembers were eligible to participate in the voluntary separation program with the exception of our union-represented crewmembers and crewmembers of our wholly-owned subsidiaries (JetBlue Technology Ventures and JetBlue Travel Products). Separation agreements for the majority of the crewmembers who elected to participate in the voluntary programs were executed in the third quarter of 2020. One-time costs of $58 million, consisting of severance and health benefits, were recorded for the three months ended September 30, 2020 in connection with the programs. Approximately $39 million of this charge was disbursed during the third quarter of 2020. Substantially all of the remaining balance has been disbursed as of September 30, 2021 with the residual amount expected to be disbursed by mid-2022. Accruals related to the voluntary separation programs are primarily recorded in accrued salaries, wages and benefits, and accounts payable on our consolidated balance sheets.

(5) In the third quarter of 2020, we executed $327 million of aircraft sale-leaseback transactions. Of these transactions, $118 million did not qualify as sales for accounting purposes. The remaining $209 million qualified as sales and generated a loss of $106 million. These losses represent the difference between the book value of these assets and their fair value. We estimated the fair value of the related aircraft considering third party valuations and considered specific circumstances such as aircraft age, maintenance requirements and condition, and therefore classified as Level 3 in the fair value hierarchy.

2521

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The COVID-19 pandemic ~~continues~~continued to have ~~a significant~~an adverse impact on our business and operating ~~revenues and financial position. We began seeing signs of recovery~~results in ~~February 2021 that continued to progress into~~ the ~~third~~first quarter of ~~2021. The length and severity of~~2022. We have seen continued improvements in our business during the ~~reduction in travel demand due~~first quarter, which we expect to the COVID-19 pandemic are uncertain, but with increasing vaccination rates, reductions in infection rates related to new COVID-19 variants and easing of travel advisories and restrictions, we believe customer confidence will continue ~~to grow. We expect widespread vaccinations to result in sustained demand improvement going forward, with recovery of domestic demand outpacing the recovery of international demand in most regions.~~throughout 2022.

~~Third~~First Quarter ~~2021~~2022 Results

Our ~~third~~operating results in the first quarter of 2021 and 2020 ~~results~~ were adversely impacted by the COVID-19 pandemic. As a result, comparisons of our ~~2021 results to 2020~~year-over-year performance are inflated and ~~are~~would not necessarily be indicative of our future operating results. In certain cases, we have also provided comparisons of our ~~third~~first quarter ~~2021~~2022 results to our ~~third~~first quarter 2019 results, which are more reflective of pre-pandemic ~~operations.~~operations, allowing for a better understanding of the full impact of the COVID-19 pandemic and the progress of our recovery.

•~~Third~~First quarter system capacity increased by ~~134.1%~~69.2% year-over-year and decreased by ~~0.8% versus~~0.3% compared to the ~~third~~first quarter of 2019.

•Revenue for the ~~third~~first quarter of ~~2021~~2022 increased by ~~300.8%~~137.0%, or $1.0 billion year-over-year, to ~~$2.0 billion and~~$1.7 billion. Compared to the first quarter of 2019, revenue decreased by ~~5.5% versus the third quarter of 2019.~~7.2%, or $135 million.

•Operating revenue per available seat mile ~~(RASM)~~("RASM") for the ~~three months ended September 30, 2021~~first quarter of 2022 increased by ~~71.2%~~40.0% year-over-year to ~~12.20 cents year-over-year and decreased by 4.7% versus~~11.29 cents. This compares to a decrease of 6.9% from the ~~three months ended September 30,~~first quarter of 2019.

•Operating expense for the ~~third~~first quarter of ~~2021~~2022 increased by ~~77.1%~~104.8% year-over-year to ~~$1.8 billion and decreased by 2.9% versus~~$2.1 billion. Compared to the ~~third~~first quarter of ~~2019.~~2019, operating expense increased by 17.1%, or $308 million.

•Operating expense per available seat mile ~~(CASM)~~("CASM") for the ~~three months ended September 30, 2021 decreased~~first quarter of 2022 increased by ~~24.3%~~21.0% year-over-year to ~~11.04 cents and decreased by 2.1% versus~~13.67 cents. This compares to an increase of 17.5% from the ~~three months ended September 30,~~first quarter of 2019.

•Our operating expense for the ~~third~~first quarter of 2021 and ~~2020~~2019 included the effects of special items. In the third quarter of 2021, we recognized $186 million of contra-expense representing the amount of federal payroll support grants that were utilized during the period. Special items for the third quarter of 2020 included $332 million of payroll support grants under the CARES act recognized as a contra-expense on our consolidated statement of operations, $58 million of one-time costs associated with our voluntary crewmember separation program, $56 million of impairment charges on our Embraer E190 fleet, and losses of $106 million generated by certain aircraft sale-leaseback transactions. Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our operating expense(1) increased by ~~50.2% year-over-year~~36.3% to $1.5 billion ~~for~~year-over-year. This compares to an increase of 13.5% from the ~~third~~first quarter of ~~2021 and 11.8% versus~~2019. Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the ~~third quarter~~end of ~~2019.~~this section for details of the special items.

•Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile ~~(CASM ex-fuel)~~("CASM ex-fuel")(1) decreased by ~~35.9%~~19.4% year-over-year to ~~9.39~~9.87 cents for the ~~third~~first quarter of ~~2021 and increased by 12.7% versus~~2022. This compares to an increase of 13.9% from the ~~third~~first quarter of 2019.

•Our reported ~~diluted~~(loss) earnings ~~(loss)~~ per share for the ~~third~~first quarter of 2022, 2021, and ~~2020~~2019 were ~~$0.40~~$(0.79), $(0.78), and ~~$(1.44),~~$0.14, respectively. ~~In addition to the special items described above,~~Excluding mark-to-market and certain gains and losses on our ~~results for the third quarter of 2021 also included $54 million of one-time gains on equity investments. Excluding these items,~~investments, our adjusted loss per share(1) for the ~~third~~first quarter of 2022 was $(0.80). Excluding special items, our adjusted (loss) earnings per share~~2021~~(1) for the first quarter of 2021 and ~~2020~~2019 were ~~$(0.12)~~$(1.48) and ~~$(1.75),~~$0.16, respectively.

~~Since February 2021,~~Network

Enabled by our NEA with American, we ~~have seen a meaningful rebound~~added three new destinations to our network in the demand for leisure travel. We are encouraged by the improving booking trends, and believe the ongoing acceleration in demand will continue, subject to the increase in vaccination rates, reductions in COVID-19 infection rates, including those associated with new variants, and easingfirst quarter of ~~travel restrictions.~~ 2022.


Destination						Service Commenced

Puerto Vallarta, Mexico						February 19, 2022
Kansas City, Missouri						March 27, 2022
Milwaukee, Wisconsin						March 27, 2022

We expect to ~~adjust capacity in response~~continue diversifying our network as we recover from the pandemic. We have previously announced services to the ~~level~~following new destinations:


Destination						Service Expected to Commence

Vancouver, Canada						June 9, 2022
Asheville, North Carolina						June 16, 2022

(1) Refer to our ''Regulation G Reconciliation of ~~demand. We have taken a number~~Non-GAAP Financial Measures" at the end of ~~steps to position ourselves~~this section for ~~recovery when demand for air travel returns to pre-pandemic levels.~~more information on this non-GAAP measure.

~~Network~~22

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~~In August 2021, we launched~~PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Following the success of our inaugural transatlantic service ~~from~~between New York's John F. Kennedy International Airport ~~("JFK") in New York to~~and London, ~~Heathrow Airport. We further expanded our presence in the transatlantic market with services from JFK to London Gatwick Airport,~~ which began in ~~September 2021. We expect~~August 2021, we have announced plans to begin ~~services~~service to London from Boston Logan International Airport this summer.

Fleet

Properties

Reaffirming our commitment to New York, in February 2022, we executed a new lease for our primary corporate offices that will extend our stay in the present Long Island City location until 2039. This new lease contributed $59 million to our total operating lease assets and liabilities balances at March 31, 2022.

Environmental, Social, and Governance ("ESG")

We remain focused on continuing to lead in ESG initiatives. Our efforts include:

•In March 2022, the JetBlue Foundation awarded 10 charitable organizations with grants to support and advance their education and mentorship programs. These grants are expected to further the Foundation's mission of increased advocacy for inclusion, gender and racial parity within science, technology, engineering and math education, and aviation.

•We expanded our Gateway program to provide a pathway for families of our crewmembers to become pilots through a defined education, training, and time-building program.

•We made an investment in Electric Power Systems, a leading provider of aerospace battery systems, through JetBlue Technology Ventures ("JTV"), our wholly owned subsidiary.

•In April 2022, JTV announced its investment as a limited partner in TPG Rise Climate, the climate investing strategy of TPG's global impact investing platform TPG Rise, further continuing its commitment to creating a more sustainable travel industry.

•In April 2022, we announced the execution of an offtake agreement with Aemetis for 125 million gallons of blended sustainable aviation fuel ("SAF") to be delivered over 10 years beginning in 2025.

Outlook for 2022

We are pleased with the momentum in demand and revenue trends which accelerated throughout the first quarter. We expect revenue for the second quarter of 2022 to increase between 11% to 16 % compared to the same period in 2019, sustained by the underlying momentum.

To alleviate the recent operational challenges, we are further moderating our capacity growth for the remainder of the year. For the second quarter of 2022, we expect capacity to increase between 0% to 3% compared to the same period in 2019. Full year 2022 capacity is expected to increase between 0% to 5% compared to 2019. Our original expectation for full year 2022 capacity was an increase of between 11% to 15% versus 2019. We believe our operational investments and capacity reductions will improve our operational performance in the coming months while we expect to fly a record number of customers. Given our reduced capacity outlook, we are also exploring the potential to accelerate the retirement of some of our older aircraft.

Operating expenses per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items ("CASM Ex-Fuel")(1) for the second quarter of 2022 is expected to increase between 15% to 17%. This increase is primarily attributed to the following factors: certain inefficient, close-in capacity reductions; premium and incentive pay to our frontline crewmembers to support the operation; ramp-up costs to maintain our hiring pace for the summer; and recent changes

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

to the collective bargaining agreement with our pilots group. We expect full year 2022 CASM Ex-Fuel to increase between 10% to 15% compared to 2019.

Despite the temporary cost challenges expected in the near term, we expect the Company will return to profitability in the second half of 2022.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Three Months Ended March 31, 2022 vs. 2021

Overview

We reported a net loss of $255 million, an operating loss of $367 million and an operating margin of (21.1)% for the three months ended March 31, 2022. This compares to a net loss of $247 million, an operating loss of $294 million and an operating margin of (40.2)% for the three months ended March 31, 2021. Loss per share was $(0.79) for the three months ended March 31, 2022 compared to $(0.78) for the same period in 2021.

Our reported results for the three months ended March 31, 2022 included mark-to-market and certain gains and losses on our investments. Adjusting for these items, our adjusted net loss(1) was $256 million, and adjusted loss per share(1) was $(0.80) for the three months ended March 31, 2022.

Our reported results for the three months ended March 31, 2021 included the effects of special items. Adjusting for these special items(1), our adjusted net loss(1) was $467 million, adjusted operating loss(1) was $583 million, adjusted operating margin(1) was (79.6)%, and adjusted loss per share(1) was $(1.48) for the three months ended March 31, 2021.

On-time performance, as defined by the Department of Transportation ("DOT"), is arrival within 14 minutes of scheduled arrival time. In the first quarter of 2022, our system wide on-time performance was 65.6% compared to 78.9% for the same period in 2021. Our completion factor decreased by 3.0 points to 94.9% in the first quarter of 2022 from 97.9% for the same period in 2021. We experienced operational challenges in the first quarter of 2022 which continued into April.

Operating Revenues


(Revenues in millions; percent changes based on unrounded numbers)	Three Months Ended March 31,						Year-over-Year Change
	2022			2021			$		%
Passenger revenue	$	1,603		$	670		$	933	139.5	%
Other revenue	133			63			70		111.0
Total operating revenues	$	1,736		$	733		$	1,003	137.0	%

Average Fare	$	195.99		$	149.97		$	46.02	30.7	%
Yield per passenger mile (cents)	14.67			11.52			3.15		27.3
Passenger revenue per ASM (cents)	10.42			7.36			3.06		41.5
Operating revenue per ASM (cents)	11.29			8.06			3.23		40.0
Average stage length (miles)	1,231			1,277			(46)		(3.6)
Revenue passengers (thousands)	8,177			4,463			3,714		83.2
Revenue passenger miles (millions)	10,927			5,808			5,119		88.1
Available Seat Miles (ASMs) (millions)	15,383			9,090			6,293		69.2
Load Factor	71.0		%	63.9		%			7.1		pts.

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More® Space. The increase in passenger revenue of $933 million, or 139.5%, for the three months ended March 31, 2022 compared to the same period in 2021, was primarily driven by the return in demand for travel as we continue to recover from the COVID-19 pandemic. Revenue passengers increased by 83.2% to 8.2 million for the three months ended March 31, 2022 from 4.5 million for the same period in 2021.

Other revenue is primarily comprised of the marketing component of the sales of our TrueBlue® points. It also includes revenue from the sale of vacation packages, ground handling fees received from other airlines, and rental income. The increase in other revenue of $70 million, or 111.0%, was principally driven by an increase in marketing revenue associated with our TrueBlue® program due to higher customer spend along with improved metrics from our new co-branded credit card agreements, which became effective in mid-2021.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our first quarter 2022 results were characterized by a very strong demand acceleration, with revenue coming in more than six points ahead of our original forecast of a decline between 11% and 16% compared to the same period in 2019. Load factors improved meaningfully from an average of 62% in January to 80% in March. We delivered positive year-over-three revenue growth in the month of March as we exited the quarter with tremendous revenue momentum driven by very strong underlying travel demand across our business.

Operating Expenses

In detail, our operating costs per available seat mile, or ASM, were as follows:


(in millions; per ASM data in cents; percent changes based on unrounded numbers)	Three Months Ended March 31,				Year-over-Year Change				Cents per ASM
	2022		2021		$		%		2022	2021	% Change
Aircraft fuel and related taxes	$	571	$	193	$	378	195.0	%	3.71	2.13	74.3	%
Salaries, wages and benefits	688		521		167		32.0		4.47	5.74	(22.0)
Landing fees and other rents	132		115		17		14.8		0.86	1.26	(32.2)
Depreciation and amortization	143		125		18		15.1		0.93	1.37	(32.0)
Aircraft rent	26		25		1		4.2		0.17	0.27	(38.4)
Sales and marketing	57		23		34		152.9		0.37	0.25	49.4
Maintenance, materials and repairs	152		104		48		45.8		0.99	1.15	(13.8)
Other operating expenses	334		210		124		59.2		2.17	2.31	(5.9)
Special items	—		(289)		289		(100.0)		—	(3.18)	(100.0)
Total operating expenses	$	2,103	$	1,027	$	1,076	104.8	%	13.67	11.30	21.0	%

Total operating expenses excluding special items(1)	$	2,103	$	1,316	$	787	59.8	%	13.67	14.48	(5.6)	%

Aircraft Fuel and Related Taxes

Aircraft fuel and related taxes increased by $378 million, or 195.0%, for the three months ended March 31, 2022 compared to the same period in 2021. The average fuel price for the three months ended March 31, 2022 increased by 68.4% to $2.90 per gallon. Our fuel consumption increased by 75.2%, or 85 million gallons, due to the increase in capacity as demand for travel returned. Scheduled departures increased to 78,393 flights, or 78.0%, for the three months ended March 31, 2022. Given the significant rise in fuel costs, we moderated our capacity growth for the first quarter of 2022.

Salaries, Wages and Benefits

Salaries, wages and benefits increased by $167 million, or 32.0%, for the three months ended March 31, 2022 compared to the same period in 2021. The increase was driven primarily by higher total hours worked by our crewmembers as we align our workforce with the increased demand for travel. As of March 31, 2022, we have approximately 23,500 crewmembers compared to approximately 20,000 crewmembers at March 31, 2021. The average number of full-time equivalent crewmembers increased by 33.2% compared to the same period in 2021. We expect near-term pressures on salaries, wages and benefits driven by premium and incentive pay to our frontline crewmembers to support the operation, ramp-up costs to maintain our hiring pace for the summer, ~~2022.~~and recent changes to the collective bargaining agreement with our pilots group.

Landing Fees and Other Rents

Landing fees and other rents increased by $17 million, or 14.8%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in departures.

Depreciation and Amortization

Depreciation and amortization increased by $18 million, or 15.1%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily driven by the addition of 16 new aircraft that were placed into service since March 31, 2021. The average number of our operating aircraft increased by 6.0% during the three months ended March 31, 2022 as compared to the same period in 2021.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Sales and Marketing

InSales and marketing increased $34 million, or 152.9%, for the ~~third quarter~~three months ended March 31, 2022 compared to the same period in 2021 principally driven by higher credit card fees and computer reservation system charges, which are directly related to return in demand as we continue to recover from the pandemic. Revenue passengers increased by 4 million, or 83.2%, year-over-year.

Materials and Repairs

Maintenance materials and repairs increased $48 million, or 45.8%, for the three months ended March 31, 2022 compared to the same period in 2021, primarily driven by the increase in flying and timing of ~~2021, we also launched seasonal services from JFK to Glacier Park International Airport in Kalispell, Montana, as well as Boise Airport in Idaho.~~heavy maintenance visits and engine maintenance.

~~Fleet~~Other Operating Expenses

~~We took delivery~~Other operating expenses consist of ~~three Airbus A220 aircraft and one Airbus A321neo aircraft in the third quarter of 2021, all of which were paid for with cash on hand.~~

~~Sustainability~~

~~We are committed to reducing our contribution to climate change and decarbonizing our operation. We have a clear plan to address our flight emissions, using~~ the following ~~six levers:~~categories: outside services (including expenses related to fueling, ground handling, skycap, security, and janitorial services), insurance, personnel expenses, professional fees, onboard supplies, shop and office supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes.

~~(1) Aircraft Efficiency: Our investments~~Other operating expenses increased $124 million, or 59.2%, for the three months ended March 31, 2022 compared to the same period in ~~new aircraft increase fuel efficiency and drive down costs;~~

~~(2) Fuel Optimization: We continuously monitor and adjust~~2021 as we ramped up the level of our operations ~~to ensure adherence to fuel-savings procedures;~~

~~(3) Sustainable Aviation Fuels: We use sustainable aviation fuels ("SAF") on our existing aircraft reducing lifecycle emissions by up to 80%;~~

(4) Electric Ground Operations: We are converting our Ground Service Equipment to electric and maximizing electric ground power and air systems for our aircraft to minimize our fuel and emissions use on the ramp;

~~(5) Technology Partnerships: Through our subsidiary, JetBlue Technology Ventures, we support and invest~~ in ~~alternative energy aircraft technologies, such as those developing electric- and hydrogen-fueled aircraft; and~~

~~(6) Offsets: For unavoidable emissions, we purchase high-quality, verified carbon offsets.~~

In 2020, we became the first major U.S airline to achieve carbon neutrality for all domestic flights, which is achieved through large-scale carbon offsetting. Our target is to achieve net zero carbon emissions by 2040, ten years ahead of the Paris Climate Agreement.

We view the adoption of SAF as the most promising means of rapidly and directly reducing emissions in the aviation industry. Enabled by our recent agreements with SG Preston, Neste, World Energy, and World Fuel Services, we are well ahead of pace to achieve our goal of converting 10% of our jet fuel usage to SAF by 2030.

~~Commercial Partnerships~~

~~We continue to develop our strategic relationship with American Airlines, Inc. ("American") under the Northeast Alliance (the “NEA”).~~

On September 21, 2021, the United States Department of Justice ("DOJ"), along with the Attorneys General of six states and the District of Columbia filed a lawsuit against JetBlue and American concerning the previously implemented NEA. The lawsuit asserts and seeks an adjudication that the NEA violates U.S. antitrust laws, and that we and American should be permanently enjoined from continuing and restrained from further implementing the NEA.

~~Also on September 21, 2021, the United States Department of Transportation ("DOT") published a Clarification Notice relating~~response to the ~~agreement that had been reached between~~return in demand for air travel.

Special Items

Special items for the ~~DOT, JetBlue, and American in January~~three months ended March 31, 2021 atincluded the ~~conclusion~~following:

•Contra-expense of $288 million, which represents the ~~DOT’s review~~amount of ~~the NEA ("DOT Agreement"). The DOT Clarification Notice stated, among other things, that the DOT Agreement remains in force~~federal payroll support grants utilized during the ~~pendency~~period; and

•Contra-expenses of the DOJ action against the NEA and, while the DOT retains independent statutory authority to prohibit unfair methods of competition in air transportation, the DOT intends to defer to DOJ to resolve the antitrust concerns that DOJ has identified with respect$1 million related to the ~~NEA. The DOT simultaneously published a Notice Staying Proceeding in relation to a complaint~~recognition of Employee Retention Credits provided by ~~Spirit Airlines, Inc. regarding~~ the ~~NEA, pending resolution of~~CARES Act.

There were no special items for the ~~DOJ action described above.~~three months ended March 31, 2022.

Operational Statistics

The ~~NEA was established to unlock capacity growth~~following table sets forth our operating statistics for the three months ended March 31, 2022 and customer benefits that could not have been achieved independently by either airline and to better compete in the Northeast market. We believe our partnership with American will create more capacity, seamless connectivity for travelers in the northeast, and offer more choices for customers across the networks of both airlines.

~~The Company believes the DOJ lawsuit is without merit and, along with American, intends to defend this matter vigorously.~~2021:

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Outlook for 2021~~

As we continue to navigate through the pandemic, we are optimistic about the future. Based on our current planning assumptions, we expect capacity for the fourth quarter of 2021 to decline between 4% and 7% percent as compared to the same period in 2019.

Revenue is expected to decline between 8% and 13% in the fourth quarter of 2021 as compared to the same period in 2019. We expect the demand acceleration which began in February 2021 to continue as larger portions of the U.S. population become vaccinated against COVID-19 and travel advisories and restrictions begin to ease. We are closely monitoring the developments associated with the COVID variants and the potential impact that continued spread of these variants could have on the demand for air travel.

We plan to continue managing our cost structure, while mitigating near term cost pressures from higher fuel prices, airport rents and landing fees, and labor costs as we return our operations to pre-pandemic levels.

~~RESULTS OF OPERATIONS~~

~~Three Months Ended September 30, 2021 vs. 2020~~

~~Overview~~

We reported a net income of $130 million, operating income of $186 million and an operating margin of 9.4% for the three months ended September 30, 2021. This compares to a net loss of $393 million, an operating loss of $516 million and an operating margin of (104.9)% for the three months ended September 30, 2020. Earnings per diluted share were $0.40 for the third quarter of 2021 and $(1.44) of loss per share for the same period in 2020.

Our reported results for the third quarter of 2021 and 2020 included the effects of special items. In addition to special items, our third quarter 2021 results also included one-time gains on certain equity investments. Adjusting for these items~~(1)~~, our operations broke even with an adjusted net loss of $39 million and an adjusted loss per share of $(0.12) for the third quarter of 2021. This compares to adjusted net loss of $477 million, adjusted operating loss of $628 million, adjusted operating margin of (127.6)%, and adjusted loss per share of $(1.75) for the third quarter of 2020.

On-time performance, as defined by the Department of Transportation, or DOT, is arrival within 14 minutes of scheduled arrival time. In the third quarter of 2021, our system wide on-time performance was 63.5% compared to 88.9% for the same

~~period in 2020. Our completion factor increased by 0.1 points to 97.7% in the third quarter of 2021 from 97.6% in the same period in 2020.~~

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Operating Revenues~~

(Revenues in millions; percent changes based on unrounded numbers) Three Months Ended September 30, Year-over-Year Change
2021 2020 $ %
Passenger revenue $ 1,856 $ 445 $ 1,411 317.3 %
Other revenue 116 47 69 145.6
Total operating revenues $ 1,972 $ 492 $ 1,480 300.8 %
Average Fare $ 204.50 $ 206.73 $ (2.23) (1.1) %
Yield per passenger mile (cents) 14.37 15.10 (0.73) (4.8)
Passenger revenue per ASM (cents) 11.48 6.44 5.04 78.2
Operating revenue per ASM (cents) 12.20 7.12 5.08 71.2
Average stage length (miles) 1,320 1,313 7 0.5
Revenue passengers (thousands) 9,075 2,151 6,924 321.8
Revenue passenger miles (millions) 12,913 2,945 9,968 338.5
Available Seat Miles (ASMs) (millions) 16,168 6,905 9,263 134.1
Load Factor 79.9 % 42.6 % 37.3 pts.

~~Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More~~® Space. The increase in passenger revenue of $1.4 billion, or 317.3%, for the three months ended September 30, 2021 compared to the same period in 2020, was primarily driven by the increase in demand for travel as we gradually recover from the COVID-19 pandemic. Revenue passengers increased to 9.1 million for the three months ended September 30, 2021 from 2.2 million for the same period in 2020.

~~Operating Expenses~~

~~In detail, our operating costs per available seat mile, or ASM, were as follows:~~

(in millions; per ASM data in cents; percent changes based on unrounded numbers) Three Months Ended
September 30, Year-over-Year Change Cents per ASM
2021 2020 $ % 2021 2020 % Change
Aircraft fuel and related taxes $ 443 $ 102 $ 341 335.3 % 2.74 1.47 85.9 %
Salaries, wages and benefits 620 482 138 28.6 3.83 6.98 (45.1)
Landing fees and other rents 182 84 98 115.8 1.12 1.22 (7.8)
Depreciation and amortization 140 127 13 9.6 0.86 1.84 (53.2)
Aircraft rent 25 23 2 9.5 0.16 0.33 (53.2)
Sales and marketing 60 24 36 154.4 0.37 0.34 8.6
Maintenance, materials and repairs 205 111 94 85.5 1.27 1.60 (20.8)
Other operating expenses 297 167 130 78.1 1.84 2.43 (23.9)
Special items (186) (112) (74) 67.1 (1.15) (1.61) (28.6)
Total operating expenses $ 1,786 $ 1,008 $ 778 77.1 % 11.04 14.60 (24.3) %
Total operating expenses excluding special items(1)
$ 1,972 $ 1,120 $ 852 76.1 % 12.19 16.21 (24.8) %

~~Aircraft Fuel and Related Taxes~~

Aircraft fuel and related taxes increased by $341 million, for the three months ended September 30, 2021 compared to the same period in 2020. The average fuel price for the three months ended September 30, 2021 increased by 69.7% to $2.08 per gallon. Our fuel consumption increased by 156.4%, or 130 million gallons, due to increased demand as we recover from the

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~COVID-19~~ ~~pandemic. We expect the year-over-year increase in fuel consumption to continue as we add capacity back into the system.~~

~~Salaries, Wages and Benefits~~

Salaries, wages and benefits increased $138 million, or 28.6%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily due to higher total hours worked by our crewmembers as we align our workforce with the increase in travel demand.

Salaries, wages and benefits in 2020 were lower than usual as a result of various cost saving initiatives taken in response to the decreased demand for air travel due to the COVID-19 pandemic. Beginning in March 2020, we instituted a company-wide hiring freeze, implemented salary and wage reductions of 20% to 50% for our officers, and reduced work hours for all other management workgroups. In June 2020, we announced voluntary separation programs to our crewmembers, with most departures having occurred in the third quarter of 2020.

~~Landing Fees and Other Rents~~

Landing fees and other rents increased $98 million, or 115.8%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily due to increases in departures as well as increases in rates. We expect the increase in landing fees and other rents to continue into 2022 as we recover from the COVID-19 pandemic.

~~Depreciation and Amortization~~

Depreciation and amortization increased $13 million, or 9.6%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily due a higher number of operating aircraft. We placed 15 new aircraft into service since the end of the third quarter of 2020.

~~Aircraft Rent~~

Aircraft rent increased $2 million, or 9.5%, for the three months ended September 30, 2021 compared to the same period in 2020. We executed a number of aircraft sale-leaseback transactions in the second half of 2020, the majority of which qualified as sales for accounting purposes. The assets associated with these transactions, which qualified as sales, are recorded within operating lease assets for which rent expenses are recognized through the life of the related lease terms.

~~Sales and Marketing~~

Sales and marketing increased $36 million, or 154.4%, for the three months ended September 30, 2021 compared to the same period in 2020 driven by higher credit card fees and computer reservation system charges, which are directly related to demand increases as we recover from the pandemic. Revenue passengers increased to 9.1 million for the third quarter 2021 from 2.2 million for the same period in 2020.

~~Maintenance Materials and Repairs~~

Maintenance materials and repairs increased $94 million, or 85.5%, for the three months ended September 30, 2021 compared to the same period in 2020 primarily driven by an increase in maintenance events as we bring our parked aircraft back into service. We significantly reduced our flying in 2020 as a result of the COVID-19 pandemic and parked a portion of our fleet throughout the year.

~~We expect the increase in expenses relating to maintenance, materials, and repairs to continue as we return our operations to pre-pandemic levels.~~

~~Other Operating Expenses~~

Other operating expenses consist of the following categories: outside services (including expenses related to fueling, ground handling, skycap, security, and janitorial services), insurance, personnel expenses, professional fees, onboard supplies, shop and office supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes.

Other operating expenses increased $130 million, or 78.1%, for the three months ended September 30, 2021 compared to the same period in 2020 due to higher levels of operations in response to the increased demand for travel.

~~Special Items~~

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~For the three months ended September 30, 2021, special items included a contra-expense of $186 million which represents the amount of payroll support grants utilized during the period.~~

~~For the three months ended September 30, 2020, special items included the following:~~

•~~Contra-expense of $332 million, which represents the amount of CARES Act payroll support grants utilized during the period;~~

•~~Impairment charges of $56 million on our Embraer E190 fleet;~~

•~~Losses of $106 million related to aircraft sale-leaseback transactions; and.~~

•~~One-time costs of $58 million, consisting of severance and health benefits, in connection with our voluntary separation programs.~~

~~Nine Months Ended September 30, 2021 vs. 2020~~

~~Overview~~

We reported a net loss of $53 million, an operating income of $39 million and an operating margin of 0.9% for the nine months ended September 30, 2021. This compares to a net loss of $981 million, an operating loss of $1.3 billion and an operating margin of (54.9)% for the nine months ended September 30, 2020. Loss per share was $(0.17) for the nine months ended September 30, 2021 compared to loss per share of $(3.58) for the same period in 2020.

Our reported results for the nine months ended September 30, 2021 and 2020 included the effects of special items. In addition to special items, we also recognized one-time gains on certain equity investments during 2021. Adjusting for these items~~(1)~~, our adjusted net loss was $682 million, adjusted operating loss was $802 million, adjusted operating margin was (19.1)%, and adjusted loss per share was $(2.15) for the nine months ended September 30, 2021. This compares to adjusted net loss of $1.1 billion, adjusted operating loss of $1.5 billion, adjusted operating margin of (64.2)%, and adjusted loss per share of $(4.16) for the nine months ended September 30, 2020.

~~Operating Revenues~~

(Revenues in millions; percent changes based on unrounded numbers) Nine Months Ended September 30, Year-over-Year Change
2021 2020 $ %
Passenger revenue $ 3,913 $ 2,126 $ 1,787 84.0 %
Other revenue 290 169 121 71.6
Total operating revenues $ 4,203 $ 2,295 $ 1,908 83.1 %
Average Fare $ 182.22 $ 194.77 $ (12.55) (6.4) %
Yield per passenger mile (cents) 13.26 15.02 (1.76) (11.8)
Passenger revenue per ASM (cents) 10.06 8.78 1.28 14.5
Operating revenue per ASM (cents) 10.80 9.48 1.32 14.0
Average stage length (miles) 1,293 1,201 92 7.7
Revenue passengers (thousands) 21,476 10,918 10,558 96.7
Revenue passenger miles (millions) 29,524 14,153 15,371 108.6
Available Seat Miles (ASMs) (millions) 38,902 24,209 14,693 60.7
Load Factor 75.9 % 58.5 % 17.4 pts.

~~Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More~~® Space. The increase in passenger revenue of $1.8 billion, or 84.0%, for the nine months ended September 30, 2021 compared to the same period in 2020, was primarily driven by the increase in demand for travel as we gradually recover from COVID-19 pandemic which began in March of 2020. Revenue passengers increased by 96.7% to 21.5 million for the nine months ended September 30, 2021 from 10.9 million for the same period in 2020.

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Operating Expenses~~

~~In detail, our operating costs per available seat mile, or ASM, were as follows:~~

(in millions; per ASM data in cents; percent changes based on unrounded numbers) Nine Months Ended
September 30, Year-over-Year Change Cents per ASM
2021 2020 $ % 2021 2020 % Change
Aircraft fuel and related taxes $ 973 $ 496 $ 477 96.1 % 2.50 2.05 22.0 %
Salaries, wages and benefits 1,718 1,560 158 10.1 4.42 6.44 (31.5)
Landing fees and other rents 470 258 212 82.6 1.21 1.06 13.6
Depreciation and amortization 398 407 (9) (2.2) 1.02 1.68 (39.2)
Aircraft rent 76 60 16 25.7 0.19 0.25 (21.8)
Sales and marketing 130 84 46 54.6 0.33 0.35 (3.8)
Maintenance, materials and repairs 472 344 128 37.5 1.22 1.42 (14.5)
Other operating expenses 768 560 208 37.1 1.97 2.32 (14.7)
Special items (841) (214) (627) 293.8 (2.16) (0.88) 145.1
Total operating expenses $ 4,164 $ 3,555 $ 609 17.1 % 10.70 14.69 (27.1) %
Total operating expenses excluding special items(1)
$ 5,005 $ 3,769 $ 1,236 32.8 % 12.86 15.57 (17.4) %

~~Aircraft Fuel and Related Taxes~~

Aircraft fuel and related taxes increased by $477 million, or 96.1%, for the nine months ended September 30, 2021 compared to the same period in 2020. The average fuel price for the nine months ended September 30, 2021 increased by 21.3% to $1.94 per gallon. Our fuel consumption increased by 61.6%, or 191 million gallons, due to capacity increases as demand for travel grew. ~~We expect the year-over-year increase in fuel consumption to continue as we as add capacity back into the system.~~

~~Salaries, Wages and Benefits~~

Salaries, wages and benefits increased by $158 million, or 10.1%, for the nine months ended September 30, 2021 compared to the same period in 2020, driven primarily by higher total hours worked by our crewmembers as we align our workforce with the increase in travel demand.

~~As of September 30, 2021, we have approximately 21,250 crewmembers compared to approximately 20,500 crewmembers at September 30, 2020.~~

~~Landing Fees and Other Rents~~

~~Landing fees and other rents increased by $212 million, or 82.6%, for the nine months ended September 30, 2021 compared to the same period in 2020~~ ~~due to increases in departures as well as increases in rates. We expect the increase in landing fees and other rents to continue into 2022 as we recover from the COVID-19 pandemic.~~

~~Depreciation and Amortization~~

Depreciation and amortization decreased by $9 million, or 2.2%, for the nine months ended September 30, 2021 compared to the same period in 2020. This decrease was partially attributed to the impairment of our E190 fleet and related spare parts in 2020. In addition, we also executed a number of aircraft sale-leaseback transactions towards the second half of 2020, the majority of which qualified as sales for accounting purposes. As a result of these sales, we no longer record depreciation

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~expense on the assets. The costs associated with leasing these assets back from the purchaser are included in Aircraft Rent on our consolidated statements of operations.~~

The decreases described above were partially offset by additional depreciation expenses related to 15 new aircraft that have been placed into service since September 30, 2020. The average number of aircraft increased by 3.5% during the nine months ended September 30, 2021 as compared to the same period in 2020.

~~Aircraft Rent~~

Aircraft rent increased $16 million, or 25.7%, for the nine months ended September 30, 2021 compared to the same period in 2020. As discussed above, we executed a number of aircraft sale-leaseback transactions towards the second half of 2020, the majority of which qualified as sales for accounting purposes. The assets associated with these transactions, which qualified as sales, are recorded ~~within operating lease assets for which rent expenses are recognized throughout the life of the related lease terms.~~

~~Sales and Marketing~~

Sales and marketing increased $46 million, or 54.6%, for the nine months ended September 30, 2021 compared to the same period in 2020 driven by higher credit card fees and computer reservation system charges, which are directly related to demand increases as we recover from the pandemic. Revenue passengers increased to 21.5 million for the nine months ended September 30, 2021 from 10.9 million for the same period in 2020.

~~Maintenance Materials and Repairs~~

Maintenance materials and repairs increased $128 million, or 37.5%, for the nine months ended September 30, 2021 compared to the same period in 2020 primarily driven by an increase in maintenance events as we bring our parked aircraft back into service. We significantly reduced our flying in 2020 as a result of the COVID-19 pandemic and parked a portion of our fleet throughout the year.

~~We expect the increase in expenses relating to maintenance, materials, and repairs to continue as we return our operations to pre-pandemic levels.~~

~~Other Operating Expenses~~

Other operating expenses increased $208 million, or 37.1%, for the nine months ended September 30, 2021 compared to the same period in 2020 due to higher levels of operations in response to the increased demand for travel.

~~Special Items~~

~~Special items for the nine months ended September 30, 2021 included the following:~~

•~~Contra-expense of $830 million, which represents the amount of federal payroll support grants utilized during the period; and~~

•~~Contra-expense of $11 million related to the recognition of Employee Retention Credits provided by the CARES Act.~~

For the nine months ended September 30, 2020, special items include a contra-expense of $636 million which represents the amount of CARES Act payroll support grants utilized during the period, impairment charges of $258 million on our Embraer E190 fleet, losses of $106 million related to certain aircraft sale-leaseback transactions, and one-time costs of $58 million, consisting of severance and health benefits, in connection with our voluntary separation programs.

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~The following table sets forth our operating statistics for the three and nine months ended September 30, 2021 and 2020:~~


		Three Months Ended September 30,						Year-over-Year Change		Nine Months Ended September 30,						Year-over-Year Change			Three Months Ended March 31,						Year-over-Year Change
(percent changes based on unrounded numbers)	(percent changes based on unrounded numbers)	2021			2020			%		2021			2020			%		(percent changes based on unrounded numbers)	2022			2021			%
Operational Statistics	Operational Statistics																	Operational Statistics
Revenue passengers (thousands)	Revenue passengers (thousands)	9,075			2,151			321.8		21,476			10,918			96.7		Revenue passengers (thousands)	8,177			4,463			83.2
Revenue passenger miles (RPMs) (millions)	Revenue passenger miles (RPMs) (millions)	12,913			2,945			338.5		29,524			14,153			108.6		Revenue passenger miles (RPMs) (millions)	10,927			5,808			88.1
Available seat miles (ASMs) (millions)	Available seat miles (ASMs) (millions)	16,168			6,905			134.1		38,902			24,209			60.7		Available seat miles (ASMs) (millions)	15,383			9,090			69.2
Load factor	Load factor	79.9		%	42.6		%	37.3	pts	75.9		%	58.5		%	17.4	pts	Load factor	71.0		%	63.9		%	7.1	pts
Aircraft utilization (hours per day)	Aircraft utilization (hours per day)	10.1			4.2			140.5		8.3			5.5			50.9		Aircraft utilization (hours per day)	9.9			5.9			67.8

Average fare	Average fare	$	204.50		$	206.73		(1.1)		$	182.22		$	194.77		(6.4)		Average fare	$	195.99		$	149.97		30.7
Yield per passenger mile (cents)	Yield per passenger mile (cents)	14.37			15.10			(4.8)		13.26			15.02			(11.8)		Yield per passenger mile (cents)	14.67			11.52			27.3
Passenger revenue per ASM (cents)	Passenger revenue per ASM (cents)	11.48			6.44			78.2		10.06			8.78			14.5		Passenger revenue per ASM (cents)	10.42			7.36			41.5
Operating revenue per ASM (cents)	Operating revenue per ASM (cents)	12.20			7.12			71.2		10.80			9.48			14.0		Operating revenue per ASM (cents)	11.29			8.06			40.0
Operating expense per ASM (cents)	Operating expense per ASM (cents)	11.04			14.60			(24.3)		10.70			14.69			(27.1)		Operating expense per ASM (cents)	13.67			11.30			21.0
Operating expense per ASM, excluding fuel(1)	Operating expense per ASM, excluding fuel(1)	9.39			14.64			(35.9)		10.29			13.40			(23.2)		Operating expense per ASM, excluding fuel(1)	9.87			12.25			(19.4)

Departures	Departures	76,918			32,124			139.4		188,220			128,315			46.7		Departures	78,393			44,049			78.0
Average stage length (miles)	Average stage length (miles)	1,320			1,313			0.5		1,293			1,201			7.7		Average stage length (miles)	1,231			1,277			(3.6)
Average number of operating aircraft during period	Average number of operating aircraft during period	275.9			262.9			4.9		270.4			261.3			3.5		Average number of operating aircraft during period	282.0			266.0			6.0
Average fuel cost per gallon, including fuel taxes	Average fuel cost per gallon, including fuel taxes	$	2.08		$	1.23		69.7		$	1.94		$	1.60		21.3		Average fuel cost per gallon, including fuel taxes	$	2.90		$	1.72		68.4
Fuel gallons consumed (millions)	Fuel gallons consumed (millions)	213			83			156.4		501			310			61.6		Fuel gallons consumed (millions)	197			112			75.2
Average number of full-time equivalent crewmembers	Average number of full-time equivalent crewmembers									16,088			16,004					Average number of full-time equivalent crewmembers	19,304			14,493			33.2

Historical trends may not continue. The ongoing COVID-19 pandemic continues to cause disruptions in our ~~operations during the nine months ended September 30, 2021.~~operations. We expect our operating results to significantly fluctuate from quarter-to-quarter in the future due to the uncertainties surrounding the COVID-19 pandemic, its impact on the economy and consumer behavior, and various other factors which are outside of our control. Consequently, we believe quarter-to-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance.

As the aviation industry continues to recover from the impacts of the COVID-19 pandemic, airlines including us, have faced ongoing challenges ranging from the spread of the Omicron variant, staffing ramp up, workforce attrition, weather events, and air traffic delays. To address these challenges, we have announced a series of investments aimed at restoring crewmember and customer confidence for the upcoming summer travel season. These investments are centered around five initiatives:

Schedule reduction

A reduced schedule will offer more buffer and flexibility to recover from operational disruptions and put less stress on crew resources. We originally planned to grow our 2022 capacity by 11% to 15% compared to 2019. With a reduced schedule, we now plan to grow our 2022 capacity by 0% to 5% compared to 2019. Most importantly, we are reducing our summer schedule by more than 10% from our original plan, and scheduled aircraft utilization will be down by 10% to 15% compared to 2019. Even with the reductions, we expect to grow significantly in New York's three major airports as part of the NEA, from 200 flights per day in 2019 to nearly 300 flights per day.

Hiring and training

Despite reductions in capacity growth, we will proceed with hiring efforts to increase staffing for the summer, including 5,000 new crewmembers in New York. We have also increased our pilot training team and simulator capacity to meet the increase in demand resulting from pilot attrition.

Addressing customer call volume and hold times

Recent operational disruptions have led to a record number of calls into our customer support center and extended wait times. These disruptions, coupled with a greater number of customers taking advantage of ticket flexibility and calls regarding other COVID-related questions, have taxed customer service teams across the industry. Since last fall, we have onboarded more than 1,100 new hires into customer support and we continue to increase hiring and training while also bringing on outside

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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support to help manage call volume. By this summer, we expect to have our largest-ever customer support team ready to support customers as many embark on their first vacation or travel experience since the pandemic.

We are continuing to strengthen staffing for our suite of digital tools to help customers avoid waiting on hold, including online chat capabilities and support via iMessage. In addition, we are also improving self-service capabilities on our website to offer customers additional options to make changes without calling.

Furthermore, we are also working to proactively cancel flights on days when bad weather is forecasted or if we anticipate air traffic control delays due to congestion or air traffic control center staffing shortages. Cancellations well in advance of scheduled departures will allow customers more time to adjust their plans.

Proactive aircraft maintenance efforts

The reduced schedule frees up aircraft time to give us additional opportunities to get ahead of planned maintenance programs. We are investing in additional preventative maintenance as well as reserving more aircraft as spares this summer to reduce the impact of maintenance-related cancellations and delays.

With COVID-19 supply chain challenges continuing, we have pre-purchased long lead parts, tools, and equipment as well as added additional inventory of frequently used parts, to mitigate potential delays.

Facilities / infrastructure readiness

This summer, we expect to operate approximately 190 daily flights from JFK as we continue to expand our footprint enabled by the NEA. With our heavy concentration in the Northeast and major operation at JFK, ensuring that JFK runs smoothly is essential for the entire network. In addition to hiring across workgroups, we are making a number of investments at JFK’s Terminal 5, which include:

•Redeveloping a portion of the lobby to add more kiosks and open additional space for customer throughput.

•Re-timing flights for the busiest international markets to ensure sufficient lobby space is available for COVID documentation checks.

•Smoothing out some of the peaks in the schedule to ease congestion in the lobby, TSA checkpoint, and gates.

•Dedicating ground staffing crews at gates across Terminal 5 and adding ground equipment.

While summer reliability continues to be the focus, we expect to also see a significant improvement in our airport facilities across focus cities this fall, as new terminals and space become available to support our growth. We plan to consolidate or open new or renovated terminal spaces in LaGuardia, Newark, and Orlando.

CONSOLIDATED BALANCE SHEET ANALYSIS

The following is a discussion of the ~~significant~~ changes in certain balance sheet data between ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020.~~2021.


(in millions)	(in millions)						(in millions)
Selected Balance Sheet Data:	Selected Balance Sheet Data:	September 30, 2021	December 31, 2020	$ Change	% Change		Selected Balance Sheet Data:	March 31, 2022	December 31, 2021	$ Change	% Change
ASSETS	ASSETS						ASSETS
Cash and cash equivalents	Cash and cash equivalents	2,193	1,918	275	14.3	%	Cash and cash equivalents	1,834	2,018	(184)	(9.1)	%
Investment securities	Investment securities	1,100	1,135	(35)	(3.0)	%	Investment securities	950	824	126	15.4	%
Receivables, net of allowance of $3 and $2, at September 30, 2021 and December 31, 2020, respectively.		210	98	112	114.9	%
Flight equipment		11,031	10,256	775	7.5	%
Receivables, less allowance (2022-$3; 2021-$3)							Receivables, less allowance (2022-$3; 2021-$3)	248	207	41	19.8	%
Investment securities (non-current)							Investment securities (non-current)	110	39	71	183.7	%
LIABILITIES	LIABILITIES						LIABILITIES
Accounts payable							Accounts payable	624	499	125	24.9	%
Air traffic liability	Air traffic liability	1,679	1,122	557	49.7	%	Air traffic liability	1,939	1,618	321	19.8	%
Other accrued liabilities	Other accrued liabilities	348	215	133	61.7	%	Other accrued liabilities	496	359	137	38.5	%
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS		3,760	4,413	(653)	(14.8)	%
Other		582	78	504	642.9	%
Total debt and finance lease obligations							Total debt and finance lease obligations	3,926	4,006	(80)	(2.0)	%

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cash and cash equivalents

Cash and cash equivalents decreased by $184 million, or 9.1%, to $1.8 billion as of March 31, 2022. Notable outflows during the three months ended March 31, 2022 include: $200 million of net purchases in investment securities, $134 million in capital expenditures inclusive of predelivery deposits for flight equipment, and $83 million in repayment of long-term debt and finance lease obligations. These outflows were partially offset by net cash provided by operating activities of $247 million.

Investment securities

Investment securities increased by ~~$275~~$126 million, or ~~14.3%~~15.4%, primarily driven by ~~$1.8 billion~~the net purchases of ~~cash generated from operations. We received $1.1 billion~~commercial paper and time deposit which had maturities of funds under various PSP programs in 2021, of which $831 million were classified as operating activities on our condensed consolidated statement of cash flows with the remaining $290 million classified as financing activities. In the first quarter of 2021, we completed the issuance of our 0.50% Convertible Senior Notes due 2026 in the amount of $750 million. Our cash positionbetween three and twelve months at September 30, 2021 also benefited from the initial cash payments associated with our new Co-Branded Credit Card agreements. The increases to cash were partially offset by $1.8 billion of debt repayments and $803 million of capital expenditures.March 31, 2022.

Receivables, less allowance

Receivables increased by ~~$112~~$41 million, or 19.8%, mainly as a result of the continuing improvements in demand which led to an increase in receivables from our credit card processors.

~~Flight equipment~~Investment securities (non-current)

~~Flight equipment~~Long-term investment securities increased by ~~$775~~$71 million, or ~~7.5%~~183.7%, principally driven by ~~aircraft capital expenditures made during~~ the ~~nine months ended September 2021. Additional information related~~purchases of corporate bonds in the first quarter of 2022.

Accounts payable

Accounts payable increased by $125 million, or 24.9%, primarily due to increases in operating expenses attributed to the continuing ramp up of our ~~aircraft capital expenditures are provided within our discussion~~operations coupled with timing of ~~investing activities under the "Liquidity and Capital Resources" section below.~~payments.

Air traffic liability

Air traffic liability increased by ~~$557~~$321 million, or ~~49.7%~~19.8%, driven by the continuing improvements in demand as ~~customers begin to gain~~consumer confidence toin travel grows and customers resumed booking travel further in advance. ~~The cash~~Payments collected from customers for future travel is recorded on our ~~consolidated~~ balance sheet until the point in time ~~that the customer travels.~~when transportation is provided.

Other accrued liabilities

Other accrued liabilities increased by ~~$133~~$137 million, or ~~61.7%~~38.5%, primarily due to the timing of passenger tax remittances to governmental authorities. Passenger taxes are collected from customers when tickets are sold and remitted to the authorities at a later date. The increase in passenger tax liability correlates to the increase in demand for travel as we ~~gradually~~continue to recover from the COVID-19 pandemic. ~~In addition,~~

Total debt and finance lease obligations

Total debt and finance lease obligations decreased by $80 million, or 2.0%, mainly due to principal payments made in the ~~initial cash payments received from our new Co-Branded Credit Card agreements are deferred and recognized as revenue over the terms~~first quarter of ~~the related contracts within other accrued liabilities and other liabilities on our consolidated balance sheet.~~

2022.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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~~Long-term debt and finance lease obligations~~

~~Long-term debt and finance lease obligations decreased by $653 million, or 14.8%, primarily due to~~ ~~$1.8 billion of debt repayments made during the nine months ended September 30, 2021 partially offset by the issuance of our 0.50% Convertible Senior Notes and~~ ~~unsecured term loans received under various federal payroll support programs. We will continue to look for opportunities to reduce our overall debt level as our business continues to recover.~~

~~Other liabilities~~

~~Other liabilities increased by $504 million principally due to the~~ initial cash payments received from our new Co-Branded Credit Card agreements in 2021. Earnings associated with the cash payments are deferred over the terms of the related contracts within other accrued liabilities and other liabilities on our consolidated balance sheets.

LIQUIDITY AND CAPITAL RESOURCES

The airline business is capital intensive. Our ability to successfully execute our growth plans is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents, investment securities on hand, and available lines of credit. Additionally, our unencumbered assets could be an additional source of liquidity, if necessary.

We believe a healthy liquidity position is a crucial element of our ability to weather any part of the economic cycle while continuing to execute on our plans for profitable growth and increased returns. Our goal is to continue to be diligent with our liquidity, ~~and~~ maintain financial ~~flexibility.~~flexibility, and be prudent with capital spending.

At ~~September 30, 2021,~~March 31, 2022, we had cash, cash equivalents, ~~and~~ short-term investments, and long-term marketable securities of approximately ~~$3.3~~$2.9 billion. ~~Our~~

The COVID-19 pandemic continued to have an adverse impact on our business and operating results ~~for 2021 continue to be impacted by~~in the ~~COVID-19 pandemic and~~first quarter of 2022. We have seen continued improvements in our business during the first quarter which we expect to ~~maintain an elevated level of cash on hand as we navigate through the remainder of 2021.~~continue throughout 2022.

Analysis of Cash Flows

Operating Activities

We rely primarily on operating cash flows to provide working capital for current and future operations. Cash flows from operating activities were ~~$1.8 billion~~$247 million and ~~$(223)~~$177 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. Lower losses, principally driven by higher operating revenues ~~coupled with federal grants received under various payroll support programs, and the initial cash payments associated with our new Co-Branded Credit Card Agreements all~~ contributed to the increase in operating cash flows.

Investing Activities

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, capital expenditures related to our purchase of flight equipment included ~~$577~~$17 million for ~~the purchase of eight Airbus A321neo aircraft, five Airbus A220 aircraft, and the~~spare part purchases, ~~of several spare engines; $97~~$49 million in work-in-progress relating to flight ~~equipment; $34 million for spare part purchases;~~equipment, and ~~$33~~$49 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$62~~$19 million.

Investing activities for the ~~nine months ended September 30, 2021~~current year period also included ~~$70~~$200 million ofin net ~~proceeds from maturities~~purchases of investment securities.

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, capital expenditures related to our purchase of flight equipment included ~~$295~~$156 million related to the purchase of ~~five~~three Airbus A321neo aircraft ~~one Airbus A321 lease buyout,~~ and ~~the purchase of several~~ spare engines, ~~$128~~$20 million for spare part purchases, $12 million in work-in-progress relating to flight equipment, ~~$8 million for spare part purchases,~~ and ~~$67~~$6 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$98~~$23 million.

~~We executed $445 million of aircraft sale-leaseback transactions~~ Investing activities during the ~~nine months ended September 30, 2020. Of these transactions, $209 million qualified as sales for accounting purpose and were classified within investing activities.~~

~~Investing activities for the nine months ended September 30, 2020~~prior year period also included ~~$217~~$270 million ~~of net~~in proceeds from maturities of investment securities.

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Financing Activities

Financing activities for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 primarily consisted of ~~debt repayments~~principal payments of ~~$1.8 billion~~$83 million on our outstanding debt and finance lease ~~obligations which included~~obligations.

Financing activities for the ~~following payoffs:~~

•~~$722 million on our Term Loan;~~

•~~$550 million on our Revolving Facility; and~~

•~~$115 million on our secured loan balance under~~three months ended March 31, 2021 primarily consisted of the ~~CARES Act Loan Program.~~

~~These principal payments were partially offset by:~~following:

•Net proceeds of $734 million from the issuance of our 0.50% Convertible Senior Notes due 2026; and

•Net proceeds of ~~$276~~$121 million and ~~$14~~$8 million from the issuances of unsecured term loans and warrants, respectively, in connection with the Payroll Support Program 2 under the Consolidated Appropriations ~~Act and Payroll Support Program 3 under the American Rescue Plan Act; and~~Act.

•~~$22 million of proceeds from the issuance of common stock related to our Crewmember Stock Purchase Plan.~~

~~Financing activities for the nine months ended September 30, 2020 primarily consisted of net proceeds of $2.2 billion from drawdowns of various credit facilities which included the following:~~

•~~$981 million from our 364-day term loan facility with Morgan Stanley Senior Funding Inc. as administrative agent;~~

•~~$717 million from our term loan facility with Barclays Bank PLC as administrative agent, and~~

•~~$550 million from our revolving credit facility with Citibank N.A as administrative agent.~~

~~Also included in financing activities were:~~

•~~Net proceeds of $913 million from the public placements of equipment notes;~~

•~~Net proceeds of $259 million and $19 million from the issuance of unsecured term loan and warrants, respectively, in connection with the Payroll Support Program under the CARES Act;~~

•~~$236 million of aircraft sale-leaseback transactions which did not qualify as sales for accounting purposes;~~

•~~Net proceeds of $105 million and $9 million from the issuance of secured term loan and warrants, respectively, in connection with the Loan Program under the CARES Act; and~~

•~~$22 million of proceeds from the issuance of common stock related to our Crewmember Stock Purchase Plan.~~

These proceeds were partially offset by ~~the payoff~~principal payments of $644 million on our ~~364-day term loan facility for $1.0 billion, scheduled maturities of $272 million relating to~~outstanding debt and finance lease obligations, $4$550 million of which were associated with ~~scheduled rent payments on sale-leaseback aircraft that did not qualify as sales for accounting purposes,~~the payoff of our revolving Credit and ~~the acquisitions of treasury shares of $167 million, of which $160 million related to our accelerated share repurchases, or ASR. Our share repurchase program has been suspended since March 31, 2020.~~ Guaranty Agreement.

In ~~March 2019,~~February 2022, we filed an automatic shelf registration statement with the SEC. Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, ~~depository~~depositary shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates. We may utilize this shelf registration statement, or a replacement filed with the SEC, in the future to raise capital to fund the continued development of our products and services, the commercialization of our products and services, to repay indebtedness, or for other general corporate purposes. The warrants issued in connection with the various federal government support programs were made, and any

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

issuances of our underlying common stock are expected to be made, in reliance on the exemption from the registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for transactions not involving a public offering.

Working Capital

We had working capital deficits of ~~$124~~$754 million and $170 million at ~~September 30, 2021 compared to $671 million at~~March 31, 2022 and December 31, ~~2020.~~2021, respectively. Our working capital ~~decreased~~deficit increased by ~~$547~~$584 million due to several factors, including an overall increase in our air traffic liability which was attributed to the increase in customer bookings as demand for air travel ~~begins~~continues to recover from the COVID-19 pandemic.

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities and government assistance, which may be available to us. We expect to generate positive working capital through our operations. However, we cannot predict what the effect on our business might be from future developments related to the COVID-19 pandemic ~~including the effectiveness of the available vaccines and the associated distribution,~~ and its impact on the economy and consumer behavior, the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. military actions, or acts of ~~terrorism.~~terrorism, or other external geopolitical events and conditions. We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months.

Contractual Obligations

Our contractual obligations at ~~September 30, 2021~~March 31, 2022 include the following (in billions):


		Payments due in															Payments due in
		Total		2021		2022		2023		2024		2025		Thereafter			Total		2022		2023		2024		2025		2026		Thereafter
Debt and finance lease obligations(1)	Debt and finance lease obligations(1)	$	4.9	$	0.2	$	0.5	$	0.7	$	0.4	$	0.3	$	2.8	Debt and finance lease obligations(1)	$	4.7	$	0.4	$	0.7	$	0.4	$	0.3	$	1.0	$	1.9
Operating lease obligations	Operating lease obligations	1.0		0.1		0.1		0.1		0.1		0.1		0.5		Operating lease obligations	1.0		0.1		0.2		0.1		0.1		0.1		0.4
Flight equipment purchase obligations(2)	Flight equipment purchase obligations(2)	7.7		0.2		0.9		1.6		1.8		1.3		1.9		Flight equipment purchase obligations(2)	8.4		0.7		1.6		2.0		1.7		1.4		1.0
Other obligations(3)	Other obligations(3)	2.9		0.1		0.3		0.5		0.5		0.5		1.0		Other obligations(3)	2.2		0.3		0.4		0.3		0.4		0.4		0.4
Total	Total	$	16.5	$	0.6	$	1.8	$	2.9	$	2.8	$	2.2	$	6.2	Total	$	16.3	$	1.5	$	2.9	$	2.8	$	2.5	$	2.9	$	3.7

The amounts stated above do not include additional obligations incurred as aof result of financing activities executed after ~~September 30, 2021.~~March 31, 2022.

(1) Includes actual interest and estimated interest for floating-rate debt based on ~~September 30, 2021~~March 31, 2022 rates.

(2) Amounts represent obligations based on the current delivery schedule set forth in our Airbus order book as of ~~September 30, 2021.~~March 31, 2022.

(3) Amounts include non-cancelable commitments for the purchase of goods and services.

As of ~~September 30, 2021,~~March 31, 2022, we are in compliance with the covenants of our debt and lease agreements. We have approximately ~~$28~~$32 million of restricted cash pledged under standby letters of credit related to certain leases that will expire at the end of the related lease terms.

As of ~~September 30, 2021,~~March 31, 2022, we operated a fleet of 130 Airbus A320 aircraft, 63 Airbus A321 aircraft, 21 Airbus A321neo aircraft, ~~six~~eight Airbus A220 aircraft, and 60 Embraer E190 aircraft. Of our fleet, ~~216~~220 are owned by us, 62 are leased under operating leases, and ~~two~~none are leased under finance leases. Our owned aircraft include aircraft associated with sale-leaseback ~~transactions that did not qualify as sales for accounting purposes. As of September 30, 2021, the average age of our operating fleet was 11.5 years.~~

~~Our aircraft order book as of September 30, 2021 is as follows:~~

Year Airbus A321neo Airbus A220 Total
2021 — 2 2
2022 3 9 12
2023 11 18 29
2024 13 22 35
2025 11 12 23
2026 12 1 13
2027 14 — 14
Total 64 64 128

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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transactions that did not qualify as sales for accounting purposes. As of March 31, 2022, the average age of our operating fleet was 11.9 years.

Our aircraft order book as of March 31, 2022 is as follows:


Year	Airbus A321neo	Airbus A220	Total
2022	3	10	13
2023	11	21	32
2024	13	27	40
2025	11	20	31
2026	12	14	26
2027	14	—	14

Total	64	92	156

In February 2022, we received notice from Airbus of anticipated delivery delays for the A220 aircraft. The table above represents the current delivery schedule set forth in our Airbus order book as of March 31, 2022. However, due to delays, we expect a delivery of a maximum of nine Airbus A220 aircraft in 2022.

Expenditures for our aircraft and spare engines include estimated amounts for contractual price escalations and predelivery deposits. We expect to meet our predelivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits required six to 24 months prior to delivery. Any predelivery deposits paid by the issuance of notes are fully repaid at the time of delivery of the related aircraft.

Depending on market conditions, we anticipate using a mix of cash ~~on hand to pay~~and debt financing for ~~the remaining~~ aircraft ~~deliveries~~scheduled for delivery in ~~2021.~~2022. For deliveries after ~~2021,~~2022, although we believe debt and/or lease financing should be available to us, we cannot give any assurance that we will be able to secure financing on attractive terms, if at all. While these financings may or may not result in an increase in liabilities on our balance sheet, we expect our fixed costs to increase regardless of the financing method ultimately chosen. To the extent we cannot secure financing on terms we deem attractive, we may be required to pay in cash, further modify our aircraft acquisition plans, or incur higher than anticipated financing costs.

In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new commercial aircraft and related parts imported from certain European Union member states, which include aircraft and other parts we are already contractually obligated to purchase, including those noted above. The U.S. Trade Representative increased the tariff to 15% effective in March 2020. In March 2021, the U.S. Trade Representative announced a four-month suspension of the tariff ~~which~~that was followed by an announcement in June 2021 that the suspension will be extended for five years. We continue to work with our business partners, including Airbus, to evaluate the potential financial and operational impact of these announcements on our future aircraft deliveries, including ~~once~~after the suspension is lifted. The ~~continued~~ imposition of ~~the~~this or any tariff could substantially increase the cost of new ~~Airbus~~ aircraft and parts.

Off-Balance Sheet Arrangements

Although some of our aircraft lease arrangements are with variable interest entities, as defined by ~~the~~Topic 810, Consolidations ~~topic~~ of the FASB Codification, none of them require consolidation in our condensed consolidated financial statements. Our decision to finance these aircraft through operating leases rather than through debt was based on an analysis of the cash flows and tax consequences of each financing alternative and a consideration of liquidity implications. We are responsible for all maintenance, insurance and other costs associated with operating these aircraft; however, we have not made any residual value or other guarantees to our lessors.

We have determined that we hold a variable interest in, but are not the primary beneficiary of, certain pass-through trusts. The beneficiaries of these pass-through trusts are the purchasers of equipment notes issued by us to finance the acquisition of aircraft. They maintain liquidity facilities whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs.

We have also made certain guarantees and indemnities to other unrelated parties that are not reflected on our balance sheet, which we believe will not have a significant impact on our results of operations, financial condition or cash flows. We have no other off-balance sheet arrangements.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates included in our ~~2020~~2021 Form 10-K.

Forward-Looking Information

~~Forward-Looking Information Statements in this~~

This Report (or otherwise made by JetBlue or on JetBlue’s behalf) contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. When used in this ~~Report,~~document and in documents incorporated herein by reference, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the coronavirus ~~("COVID-19"~~(“COVID-19”) pandemic including ~~the effectiveness of the available vaccines, the associated distribution~~new and ~~vaccination rates, the infection rates associated with COVID-19~~existing variants, ~~travel advisories and restrictions~~ and the outbreak of any other disease or similar public health threat that affects travel demand or behavior; restrictions on our business related to the financing we accepted under various federal government support programs such as the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act, the Consolidated

~~(1)~~ ~~Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Appropriations Act, and the American Rescue Plan Act; our significant fixed obligations and substantial indebtedness; risk associated with execution of our strategic operating plans in the near-term and long-term; the recording of a material impairment loss of tangible or intangible assets; our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our reliance on high daily aircraft utilization; our ability to implement our growth strategy; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on a limited number of suppliers, including for aircraft, aircraft engines and parts and vulnerability to delays by those suppliers; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; the outcome of the lawsuit filed by the ~~DOJ~~Department of Justice and certain state Attorneys General against us related to our Northeast Alliance entered into with American Airlines, our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional domestic or foreign government regulation, including new or increased tariffs; changes in our industry due to other airlines' financial condition; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; adverse weather conditions or natural disasters; ~~and~~ external geopolitical events and ~~conditions.~~conditions; the outcome of any discussions between JetBlue and Spirit Airlines, Inc. ("Spirit") with respect to a possible transaction, including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any such transaction will be materially different from those previously announced; the conditions to the completion of the possible transaction, including the receipt of any required stockholder and regulatory approvals, and, in particular, our expectation as to the likelihood of receipt of antitrust approvals; JetBlue’s ability to finance the possible transaction and the indebtedness JetBlue expects to incur in connection with the possible transaction; the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate Spirit’s operations with those of JetBlue; and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the possible transaction. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base our expectations may change prior to the end of each quarter or year. Any outlook or forecasts in this document have been prepared without taking into account or consideration a possible transaction with Spirit.

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this Report, could cause our results to differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, those described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures about Market Risk" in this Report and our recently filed periodic report on Forms 10-K and 10-Q, as well as our other filings with the SEC. In light of these

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

risks and uncertainties, the forward-looking events discussed in this Report might not occur. Our forward-looking statements speak only as of the date of this Report. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Where You Can Find Other Information

Our website is www.jetblue.com. Information contained on our website is not part of this Report. Information we furnish or file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to or exhibits included in these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available at the SEC’s website at www.sec.gov.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures in this report. Non-GAAP financial measures are financial measures that are derived from the condensed consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the United States, or GAAP. We believe these non-GAAP financial measures provide a meaningful comparison of our results to others in the airline industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. The information below provides an explanation of each non-GAAP financial measure and shows a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.

Operating Expenses per Available Seat Mile, excluding ~~fuel~~Fuel and ~~related taxes, other non-airline operating expenses,~~Related Taxes, Other Non-Airline Operating Expenses, and ~~special items~~Special Items ("CASM Ex-Fuel")

Operating expenses per available seat mile, or CASM, is a common metric used in the airline industry. Our CASM for the relevant periods are summarized in the table below. We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as JetBlue Technology Ventures and JetBlue Travel Products, and special items from operating expenses to determine CASM ex-fuel, which is a non-GAAP financial measure.

InSpecial items for the three months ended March 31, 2021 ~~special items~~ include contra-expenses recognized on the utilization of ~~federal~~payroll support grants received under ~~various payroll support programs~~the Consolidated Appropriations Act, 2021, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

~~Special~~For the three months ended March 31, 2019, special items ~~in 2020~~ include ~~contra-expenses recognized on~~one-time costs related to the ~~utilization of payroll support grants received under the CARES Act, impairment charges of our~~ Embraer E190 fleet ~~losses generated from certain sale-leaseback transactions, and~~transition as well as one-time costs ~~associated with~~related to the implementation of our ~~voluntary separation programs.~~pilots' collective bargaining agreement.

There were no special items for the three months ended March 31, 2022.

We believe that CASM ex-fuel is useful for investors because it provides investors the ability to measure financial performance excluding items beyond our control, such as fuel costs, which are subject to many economic and political factors, or not related to the generation of an available seat mile, such as operating expense related to certain non-airline businesses. We believe this non-GAAP measure is more indicative of our ability to manage airline costs and is more comparable to measures reported by other major airlines.


NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL	NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL																	NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
		2021				2020				2021				2020					2022				2021				2019
($ in millions; per ASM data in cents)	($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM		$		per ASM		($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM
Total operating expenses	Total operating expenses	$	1,786	$	11.04	$	1,008	$	14.60	$	4,164	$	10.70	$	3,555	$	14.69	Total operating expenses	$	2,103	$	13.67	$	1,027	$	11.30	$	1,795	$	11.63
Less:	Less:																	Less:
Aircraft fuel and related taxes	Aircraft fuel and related taxes	443		2.74		102		1.47		973		2.50		496		2.05		Aircraft fuel and related taxes	571		3.71		193		2.13		437		2.83
Other non-airline expenses	Other non-airline expenses	11		0.06		7		0.10		30		0.07		29		0.12		Other non-airline expenses	14		0.09		10		0.10		9		0.06
Special items	Special items	(186)		(1.15)		(112)		(1.61)		(841)		(2.16)		(214)		(0.88)		Special items	—		—		(289)		(3.18)		12		0.08
Operating expenses, excluding fuel	Operating expenses, excluding fuel	$	1,518	$	9.39	$	1,011	$	14.64	$	4,002	$	10.29	$	3,244	$	13.40	Operating expenses, excluding fuel	$	1,518	$	9.87	$	1,113	$	12.25	$	1,337	$	8.66

With respect to JetBlue’s CASM ex-fuel guidance, we are unable to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors. Accordingly, a reconciliation to CASM is not available without unreasonable effort.

Operating Expense, ~~Loss~~(Loss) Income before Taxes, Net ~~Loss~~(Loss) Income and ~~Loss~~(Loss) Earnings per Share, excluding Special Items and Net Gain on ~~Equity~~ Investments

Our GAAP results in the applicable periods were impacted by credits and charges that were deemed special items.

In 2021, special items include contra-expenses recognized on the utilization of federal grants received under various payroll support programs and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act. In addition, we also recognized one-time gains on certain equity investments during the period.

In 2020, special items included contra-expenses recognized on the utilization of payroll support grants received under the CARES Act, impairment charges of our Embraer E190 fleet, losses generated from certain sale-leaseback transactions, and one-time costs associated with our voluntary crewmember separation programs.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special items for the three months ended March 31, 2021 include contra-expenses recognized on the utilization of payroll support grants received under the Consolidated Appropriations Act, 2021, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

For the three months ended March 31, 2019, special items include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement.

There were no special items for the three months ended March 31, 2022.

Mark-to-market and certain gains and losses on our investments were also excluded from our results for the three months ended March 31, 2022.

We believe the impact of these items distort our overall trends and that our metrics are more comparable with the presentation of our results excluding the impact of these items. The table below provides a reconciliation of our GAAP reported amounts to the non-GAAP amounts excluding the impact of these items.

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, LOSS BEFORE TAXES, NET LOSS AND LOSS PER SHARE
EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS
Three Months Ended
September 30, Nine Months Ended
September 30,
(in millions, except per share amounts) 2021 2020 2021 2020
Total operating revenues $ 1,972 $ 492 $ 4,203 $ 2,295
Total operating expenses $ 1,786 $ 1,008 $ 4,164 $ 3,555
Less: Special items (186) (112) (841) (214)
Total operating expenses excluding special items $ 1,972 $ 1,120 $ 5,005 $ 3,769
Operating income (loss) $ 186 $ (516) $ 39 $ (1,260)
Add back: Special items (186) (112) (841) (214)
Operating (loss) excluding special items $ — $ (628) $ (802) $ (1,474)
Operating margin excluding special items — % (127.6) % (19.1) % (64.2) %
Income (loss) before income taxes $ 190 $ (578) $ (100) $ (1,381)
Add back: Special items (186) (112) (841) (214)
Less: Gain on equity investments 54 — 54 —
(Loss) excluding special items and gain on equity investments $ (50) $ (690) $ (995) $ (1,595)
Pre-tax margin excluding special items and gain on equity investments (2.6) % (140.1) % (23.7) % (69.5) %
Net income (loss) $ 130 $ (393) $ (53) $ (981)
Add back: Special items (186) (112) (841) (214)
Less: Income tax (expense) benefit related to special items (55) (28) (250) (53)
Less: Gain on equity investments 54 — 54 —
Less: Income tax (expense) related to gain on equity investments (16) — (16) —
Net (loss) excluding special items and gain on equity investments $ (39) $ (477) $ (682) $ (1,142)
Earnings Per Common Share:
Basic $ 0.41 $ (1.44) $ (0.17) $ (3.58)
Add back: Special items, net of tax (0.41) (0.31) (1.86) (0.58)
Less: Gain on equity investments, net of tax 0.12 — 0.12 —
Basic excluding special items $ (0.12) $ (1.75) $ (2.15) $ (4.16)
Diluted $ 0.40 $ (1.44) $ (0.17) $ (3.58)
Add back: Special items, net of tax (0.40) (0.31) (1.86) (0.58)
Less: Gain on equity investments, net of tax 0.12 — 0.12 —
Diluted excluding special items and gain on equity investments $ (0.12) $ (1.75) $ (2.15) $ (4.16)

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS AND NET GAIN ON INVESTMENTS
	Three Months Ended March 31,
(in millions, except per share amounts)	2022			2021			2019
Total operating revenues	$	1,736		$	733		$	1,871

Total operating expenses	$	2,103		$	1,027		$	1,795
Less: Special items	—			(289)			12
Total operating expenses excluding special items	$	2,103		$	1,316		$	1,783

Operating (loss) income	$	(367)		$	(294)		$	76
Add back: Special items	—			(289)			12
Operating (loss) income excluding special items	$	(367)		$	(583)		$	88

Operating margin excluding special items	(21.1)		%	(79.6)		%	4.7		%

(Loss) income before income taxes	$	(398)		$	(347)		$	58
Add back: Special items	—			(289)			12
Less: Net gain on investments	2			—			—
(Loss) income before income taxes excluding special items and net gain on investments	$	(400)		$	(636)		$	70

Pre-tax margin excluding special items	(23.0)		%	(86.7)		%	3.7		%

Net (loss) income	$	(255)		$	(247)		$	42
Add back: Special items	—			(289)			12
Less: Income tax (expense) benefit related to special items	—			(69)			3
Less: Net gain on investments	2			—			—
Less: Income tax (expense) related to gain on investments	(1)			—			—
Net (loss) income excluding special items and net gain on investments	$	(256)		$	(467)		$	51

(Loss) Earnings Per Common Share:
Basic	$	(0.79)		$	(0.78)		$	0.14
Add back: Special items, net of tax	—			(0.70)			0.02
Less: Net gain on investments, net of tax	0.01			—			—
Basic excluding special items and net gain on investments	$	(0.80)		$	(1.48)		$	0.16

Diluted	$	(0.79)		$	(0.78)		$	0.14
Add back: Special items, net of tax	—			(0.70)			0.02
Less: Net gain on investments, net of tax	0.01			—			—
Diluted excluding special items and net gain on investments	$	(0.80)		$	(1.48)		$	0.16

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Free Cash Flow

The table below reconciles cash provided by operations determined in accordance with GAAP to Free Cash Flow, a non-GAAP financial measure. Management believes that Free Cash Flow is a relevant metric in measuring our financial strength and is useful to investors in assessing our ability to fund future capital commitments and other obligations. Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP.


NON-GAAP FINANCIAL MEASURE	NON-GAAP FINANCIAL MEASURE					NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW	RECONCILIATION OF FREE CASH FLOW					RECONCILIATION OF FREE CASH FLOW
		Nine Months Ended September 30,					Three Months Ended March 31,
(in millions)	(in millions)	2021		2020		(in millions)	2022		2021
Net cash provided by (used in) operating activities		$	1,755	$	(223)
Net cash provided by operating activities						Net cash provided by operating activities	$	247	$	177
Less: Capital expenditures	Less: Capital expenditures	(770)		(529)		Less: Capital expenditures	(85)		(211)
Less: Predelivery deposits for flight equipment	Less: Predelivery deposits for flight equipment	(33)		(67)		Less: Predelivery deposits for flight equipment	(49)		(6)
Free Cash Flow	Free Cash Flow	$	952	$	(819)	Free Cash Flow	$	113	$	(40)

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except as described below, there have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our ~~2020~~2021 Form 10-K.

Aircraft Fuel

Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the ~~September 30, 2021~~March 31, 2022 cost per gallon of fuel. Based on projected fuel consumption for the next 12 months, including the impact of our hedging position, such an increase would result in an increase to aircraft fuel expense of approximately $~~190~~300 million. As of ~~September 30, 2021,~~March 31, 2022, we had not hedged any of our projected fuel requirement for the remainder of ~~2021.~~2022.

Interest

Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. The interest rate is fixed for ~~$4.0~~$3.8 billion of our debt and finance lease obligations, with the remaining ~~$0.2~~$0.1 billion having floating interest rates. As of ~~September 30, 2021,~~March 31, 2022, if interest rates were on average 100 basis points higher in ~~2021,~~2022, our annual interest expense would increase by approximately $1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt.

If interest rates were to average 100 basis points lower in ~~2021~~2022 than they were during ~~2020,~~2021, our interest income from cash and investment balances would decrease by approximately $1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our money market funds and short-term, interest-bearing ~~investments~~investment for the trailing twelve month period.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, or CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of ~~September 30, 2021.~~March 31, 2022. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~September 30, 2021.~~March 31, 2022.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our controls performed during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On September 21, 2021, the United States Department of Justice (the “DOJ”), along with the Attorneys General of each of the States of Arizona, California, and Florida, the Commonwealths of Massachusetts, Pennsylvania, and Virginia, and the District of Columbia, filed a lawsuit in the United States District Court for the District of Massachusetts against JetBlue Airways Corporation (“JetBlue”) and American Airlines, Inc. (“American” and, together with JetBlue, the “Carriers”) concerning the Carriers’ previously implemented Northeast Alliance (the “NEA”). The lawsuit asserts and seeks an adjudication that the NEA violates Section 1 of the Sherman Act, and that the Carriers be permanently enjoined from continuing and restrained from further implementing the NEA. JetBlue believes the lawsuit is without merit and, along with American, intends to defend itself vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our business. Refer to Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

ITEM 1A. RISK FACTORS

The global COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the travel industry generally and, as a result, on our business and results of operations, and these impacts may persist for an extended period of time or become more pronounced over time.

The global spread and impact of the COVID-19 pandemic is complex, unpredictable, and continuously evolving and has resulted in significant disruption and additional risks to our business; the travel and hospitality industries; and the global economy. The COVID-19 pandemic has led governments and other authorities around the world to impose measures intended to control its spread, including restrictions on large gatherings of people, travel bans, border closings and restrictions, business closures, quarantines, shelter-in-place orders, and social distancing measures and vaccination mandates. As a result, the COVID-19 pandemic and its consequences have significantly reduced global passenger air travel and have had a material detrimental impact on global commercial activity across the travel and hospitality industries, all of which has had, and is expected to continue to have, a material adverse impact on our business, operations, and financial results.

The extent, duration, and magnitude of the COVID-19 pandemic's effects will depend on various factors, all of which are highly uncertain, difficult to predict and not controlled by us, including, but not limited to, the impact of the pandemic on global and regional economies, travel, and economic activity, as well as actions taken by governments, businesses, and individuals in response to the pandemic, including vaccination rates in the markets where we operate, and any additional resurgence of COVID-19 and the development of new variants. These factors include the impact of the COVID-19 pandemic on unemployment rates and consumer discretionary spending; governmental or regulatory orders that impact our business and our industry, including mandates that require all passengers on our flights and our crewmembers to be vaccinated; the demand for air travel; levels of consumer confidence; the ability to effectively and widely manufacture and distribute vaccines and broad acceptance of the vaccine by the general population; and the pace of recovery when the pandemic subsides. Moreover, even after shelter-in-place orders and travel bans and advisories are lifted and, vaccines are more widely distributed and available and vaccination rates increase, demand for air travel may remain depressed for a significant length of time, and we cannot predict if and when demand will return to pre-COVID-19 levels. In addition, we cannot predict whether business travel for in-person meetings will decrease over the long-term due to technological advancements in, and consumer acceptance and adaptation to, virtual meetings and/or changes in customer preferences.

~~The COVID-19 pandemic has subjected our business, operations, and financial condition to a number of significant risks:~~

~~Demand, Capacity, Revenues and Expenses~~: With the global spread of COVID-19 beginning in March 2020, the Company began experiencing a significant decline in international and domestic demand related to COVID-19 during the first quarter of 2020, and this reduction in demand has continued through the date of this report and is expected to continue for the foreseeable future. The decline in demand caused a material deterioration in our revenues, resulting in a net loss of $1.4 billion for the year ended December 31, 2020. The Company expects its results of operations for full-year 2021 to be materially impacted. Additionally, the U.S. Congress has considered legislation that would mandate all passengers on our domestic flights to be vaccinated, which could negatively impact demand in certain of our markets. The continued decline in demand, which is expected to continue for the foreseeable future, is expected to have a material adverse impact on our business, operating results, financial condition, and liquidity.

~~Table of Contents~~

The COVID-19 pandemic has caused us, and could continue to cause us, to incur additional expenses. While governments have and may continue to implement various stimulus and relief programs, it is uncertain whether and to what extent we will be eligible to participate in, or successfully access, such programs, whether conditions or restrictions imposed under such programs will be acceptable, and whether such programs will be effective in avoiding or significantly mitigating the financial impacts of the COVID-19 pandemic. Further, we have incurred additional costs related to severance payments and may incur additional expenses related to restructuring activities in future periods. Even after the COVID-19 pandemic subsides, we could experience other short or longer-term impacts on our costs, including, for example, the need for enhanced health and hygiene standards or certifications, social distancing requirements or other precautionary measures in response to the health and safety challenges presented by the COVID-19 pandemic. These effects could impact our ability to generate profits even after revenues improve. The Company has and expects to continue to focus on reducing expenses and managing liquidity. While we lowered our cash burn from an average of approximately $18 million per day at the end of March 2020 to approximately $6.7 million per day in in the fourth quarter ended December 31, 2020, we may not be able to continue to reduce cash burn at the same rate in the future. Cash burn is calculated as net cash used in operating activities, net cash used in investing activities, and net cash provided by financing activities adjusted for certain items such as: grant proceeds received under various federal payroll support programs, proceeds from the issuance of long-term debt and finance lease obligations, proceeds of financing arrangements reported within investing activities (such as certain aircraft sale-leaseback transactions), early repayments of our debt and finance lease obligation, cash payments associated with our voluntary separation programs, net purchases of investment securities, and net proceeds from our common stock offerings.

~~Operations~~: In response to the significant decline in demand for air travel across our system, we have taken actions and continue to evaluate spending to manage operating expenses and optimize our financial resources. These actions include a permanent reduction in our workforce across our BlueCities and our support centers, eliminating non-essential spending and corporate initiatives, and reducing costs. We have received, and may continue to receive, demands or requests from labor unions that represent our colleagues, whether in the course of our periodic renegotiation of our collective bargaining agreements or otherwise, for additional compensation, healthcare benefits, or other terms that could increase costs, and we could experience labor disputes or disruptions as we continue to implement our mitigation plans. Additionally, as a result of a federal government mandate and by virtue of JetBlue being a contractor to the federal government, our crewmembers who do not receive an approved medical or religious accommodation will be required to be vaccinated against the SARS-Cov-2 novel coronavirus. As a result, we may face staffing shortages as we begin to enforce this mandate that may disrupt our operations. Further, once the effects of the pandemic subside, the recovery period could be extended and we expect that certain operational changes, particularly with respect to enhanced health and safety measures and global care and cleanliness certifications, will be necessary over the long-term.

Further, certain crewmembers of the Company, its suppliers and its business partners, such as airport, air traffic personnel, and those working on certain production lines, have tested positive for or been suspected of having COVID-19, which has resulted in facility closures, reduction in available staffing, and disruptions to the Company’s overall operations as well as that of our suppliers. The Company’s operations may be further impacted in the event of additional instances of actual or perceived risk of infection among crewmembers of the Company, its suppliers or its business partners, and this impact may have a material and adverse effect if the Company is unable to maintain a suitably skilled and sized workforce and address related crewmember matters.

~~Financial Condition and Indebtedness~~: As we manage through the effects of the pandemic, our level of indebtedness has increased and may continue to increase. To enhance our liquidity profile and cash position in response to the COVID-19 pandemic, the Company suspended share repurchases under its share repurchase program, executed two new term loan agreements and immediately drew down on these facilities for the full amount available, borrowed on its existing $550 million revolving credit facility, completed the public placements of equipment notes in an aggregate principal of $923 million, completed a public offering of 42 million shares of our common stock for net proceeds of $583 million, executed a number of aircraft sale-leaseback transactions, and temporarily grounded a portion of its fleet. There is no guarantee that debt financings will be available in the future to fund our obligations or will be available on terms consistent with our expectations. We also expect the ongoing impact of the COVID-19 pandemic on the financial markets could also adversely affect our ability to raise equity financing in the future. Changes in the credit ratings of our debt, including our revolving credit facility and outstanding senior notes, could have an adverse impact on our interest expense. As a result of the general economic uncertainty and the impact of the COVID-19 pandemic, our credit ratings have been downgraded. If our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our credit rating levels, our industry, or our Company, our access to capital and the cost of debt financing would be negatively impacted.

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The Company may also take additional actions to improve its financial position, including measures to improve liquidity, such as the issuance of additional unsecured and secured debt securities, equity securities and equity-linked securities, the sale of assets and/or the entry into additional bilateral and syndicated secured and/or unsecured credit facilities. There can be no assurance as to the timing of any such issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all. Any such actions may be material in nature and could result in significant additional borrowing. The Company's reduction in expenditures, measures to improve liquidity or other strategic actions that the Company may take in the future in response to COVID-19 may not be effective in offsetting decreased demand, and the Company will not be permitted to take certain strategic actions as a result of the CARES Act, which could result in a material adverse effect on the Company's business, operating results, liquidity and financial condition.

~~Growth~~: The COVID-19 pandemic has negatively impacted, and could continue to impact, the pace and timing of our growth. As a result of the COVID-19 pandemic, the Company reduced its planned capital expenditures and operating expenditures in 2020 (including by postponing projects deemed non-critical to the Company's operations), suspended share repurchases under its share repurchase program, and grounded or redeployed aircraft.

~~Capital Markets Impact~~: The global stock markets have experienced, and may continue to experience, significant volatility as a result of the COVID-19 pandemic, and the price of our common stock has been volatile since the onset of the pandemic. The COVID-19 pandemic and the significant uncertainties it has caused for the global economy, business activity, and business confidence have had, and are likely to continue to have, a significant effect on the market price of securities generally, including our securities. In addition, certain debt covenants restrict our ability to engage in share repurchase activity.

The impacts of the COVID-19 pandemic on our business, operations and financial condition are continuously evolving, and the continuation of the pandemic, any additional resurgence, of COVID-19 or variants could precipitate or aggravate the other risk factors included in this annual report, which in turn could further materially adversely affect our business, financial condition, liquidity, results of operations, and profitability, including in ways that are not currently known to us or that we do not currently consider to present significant risks.

~~Our Northeast Alliance with American Airlines is Subject to Challenge~~

In July 2020, we announced a strategic partnership with American Airlines Group Inc., designed to optimize our and American Airlines’ networks through certain flights operated by us and American Airlines to and from John F. Kennedy International Airport, LaGuardia Airport, Newark Liberty International Airport and Boston Logan International Airport, which we refer to as the Northeast Alliance. On September 21, 2021, the United States Department of Justice, along with the Attorneys General of each of the States of Arizona, California, and Florida, the Commonwealths of Massachusetts, Pennsylvania and Virginia, and the District of Columbia, filed a lawsuit in the United States District Court for the District of Massachusetts against us and American Airlines concerning the Northeast Alliance. The lawsuit asserts and seeks an adjudication that the Northeast Alliance violates Section 1 of the Sherman Act, and that we and American Airlines should be permanently enjoined from continuing and restrained from further implementing the Northeast Alliance.

We and American Airlines established the Northeast Alliance to unlock capacity growth and customer benefits neither of us could achieve independently and to better compete in the northeast market. We believe the lawsuit is without merit, we, along with American Airlines, intend to defend this matter vigorously. If we are unsuccessful, the failure to achieve the intended benefits of the Northeast Alliance could have an adverse impact on our business, financial condition and results of operations. Additionally, we are incurring costs associated with implementing operational and marketing elements of the Northeast Alliance, which would not be recoverable if we were required to unwind all or portion of the Northeast Alliance.

Part I, Item 1A "Risk Factors" of our ~~2020~~2021 Form 10-K, includes a discussion of our risk factors which are incorporated herein. ~~Other than the risk factors described above, there~~There have been no material changes from the risk factors associated with our business previously disclosed in our Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In accordance with the Payroll Support Program Agreement, the Payroll Support Program Extension Agreement, the Payroll Support 3 Agreement, and the Loan Agreement with the Treasury, we are prohibited from making any share repurchases through September 30, 2022. We have suspended our share repurchase program as of March 31, 2020. The acquisition of treasury stock reflected on our condensed consolidated statement of cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the ~~period.~~

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~~PART II. OTHER INFORMATION~~

respective periods.

In consideration for the Payroll Support 2 Payments, during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 we issued warrants to purchase approximately ~~1.0~~0.8 million shares of ~~our~~ common stock to the Treasury at an exercise price of $14.43 per share.

In consideration for the Payroll Support 3 Payments, during the nine months ended September 30, 2021, we issued warrants to purchase approximately 0.7 million shares of our common stock to the Treasury at an exercise price of $19.90 per share. See Note 3 to our condensed consolidated financial ~~statements.~~statements for additional details.

ITEM 5. OTHER INFORMATION

~~None.~~Executive Compensation Awards

On April 28, 2022, the Board approved a form of Performance Cash Award under the JetBlue Airways Corporation 2020 Omnibus Equity Incentive Plan, and two forms of Executive Retention Awards (collectively, the “Awards”), which the Company intends to utilize as forms of short- and long-term compensation to certain members of the Company’s senior leadership team, including the named executive officers. In reviewing and recommending the Awards for approval by the Board, the Compensation Committee, in consultation with its independent advisors, determined that the Awards were appropriate and necessary to help ensure key leaders of the Company with deep airline industry expertise continue to steward the Company during the unprecedented economic disruption caused by the COVID-19 pandemic, and the uncertainty to air travel created thereby. The Awards were designed to retain and motivate our key leaders and to further align their interests with those of our stockholders. When setting the forms of the Awards, the Compensation Committee and the Board considered that such key leader's pay package was reduced substantially as a result of the effects of the pandemic on the Company, notwithstanding their extraordinary leadership during these unprecedented times. In addition, the Compensation Committee and the Board considered the challenges expected over the next several years due to continued uncertainty as to the long-term effects of the COVID-19 pandemic on the industry coupled with certain Government Support (as defined below) restrictions affecting the Company’s ability to provide market-competitive compensation opportunities. These concerns are particularly acute for the Company given these crewleaders’ expertise and demonstrated leadership, which are, to varying degrees, valued and transferrable to other companies both within – and outside – the airline industry.

Each Award is subject to the lapse of compensation restrictions under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, the Payroll Support Program 2 as established by the United States Consolidated Appropriations Act (the “Payroll Support Program 2”), and the Payroll Support Program 3 as established by the American Rescue Plan Act of 2021 (the “Payroll Support Program 3”) (the CARES Act, Payroll Support Program 2 and the Payroll Support Program 3 are collectively referred to as the “Government Support”). In addition, the recipient must remain employed with or performing services for the Company on the payment date, provided, if a recipient experiences a termination from service without cause or for good reason prior to the payment date, the recipient will receive the Award, or a portion thereof, on the payment date. For all other terminations of service prior to the payment date, the Board (or Compensation Committee if delegated by the Board), will determine continued eligibility for the Award.

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PART II. OTHER INFORMATION

Upon satisfaction of the terms and conditions of the Executive Retention Awards (“ERAs”) each of the recipients will receive ERAs in the aggregate of the equivalent to a pre-established multiple of their respective base salaries as of April 28, 2022 as follows: Robin Hayes (1.28x), Joanna Geraghty (1.00x), Ursula Hurley (2.62x) and Brandon Nelson (0.99x). Payments pursuant to the Awards, if any, will be made in cash or fully vested shares of the Company’s common stock, as applicable, as determined by the Board (or Compensation Committee if delegated by the Board) in its sole discretion. No portion of the Award may be paid earlier than following the lapse of both the Government Support restrictions and, with respect to Performance Cash Awards, achievement of the performance condition.

The foregoing summary is not complete and is qualified in its entirety by reference to the form of Performance Cash Award and forms of Executive Retention Award Agreement, filed herewith as Exhibits 10.1, 10.2 and 10.3, and each as incorporated by reference herein.

ITEM 6. EXHIBITS

See accompanying Exhibit Index included after the signature page of this Report for a list of the exhibits filed or furnished with this Report.

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EXHIBIT INDEX


Exhibit Number						Exhibit
~~10.1~~10.1†						~~JetBlue Executive Retention~~Form of Performance Cash Award ~~- Ursula Hurley, dated September 5, 2021—incorporated by reference to Exhibit 10.1 to our current report on Form 8-K dated September 5, 2021 and filed on September 7, 2021.~~Agreement
~~10.2~~10.2†						~~Amendment to Employment~~Form of Executive Award Agreement ~~between Robin Hayes~~(award vesting on May 1, 2023)
10.3†						Form of Executive Award Agreement (award vesting on May 1, 2023, February 1, 2024, and ~~JetBlue Airways Corporation, dated September 5, 2021—incorporated by reference to Exhibit 10.2 to our current report on Form 8-K dated September 5, 2021 and filed on September 7, 2021.~~February 1, 2025)
31.1*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32**						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Labels Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)
†						Compensatory plans in which the directors and executive officers of JetBlue participate.

*						Filed herewith.
**						Furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JETBLUE AIRWAYS CORPORATION

(Registrant)

Date:

~~November 1, 2021~~April 29, 2022

By:

/s/ ~~Alexander Chatkewitz~~Ursula L. Hurley

~~Vice President, Controller, and~~Ursula L. Hurley
Chief ~~Accounting~~Financial Officer
~~(Principal Accounting Officer)~~

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	September 30, 2021		December 31, 2020
Available-for-sale securities
Time deposits	$	1,060	$	1,130
Equity securities	36		—
Debt securities	5		7
Total available-for-sale securities	1,101		1,137
Total investment securities	$	1,101	$	1,137


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Fuel derivatives
Hedge effectiveness losses recognized in aircraft fuel expense	$	—		$	2		$	—		$	5
Losses on derivatives resulting from the discontinuance of hedge accounting recognized in interest income and other	—			1			—			6
Hedge losses on derivatives recognized in comprehensive income	—			—			—			11
Percentage of actual consumption economically hedged	—		%	27		%	—		%	25		%


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, LOSS BEFORE TAXES, NET LOSS AND LOSS PER SHARE EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS
	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except per share amounts)	2021			2020			2021			2020
Total operating revenues	$	1,972		$	492		$	4,203		$	2,295

Total operating expenses	$	1,786		$	1,008		$	4,164		$	3,555
Less: Special items	(186)			(112)			(841)			(214)
Total operating expenses excluding special items	$	1,972		$	1,120		$	5,005		$	3,769

Operating income (loss)	$	186		$	(516)		$	39		$	(1,260)
Add back: Special items	(186)			(112)			(841)			(214)
Operating (loss) excluding special items	$	—		$	(628)		$	(802)		$	(1,474)

Operating margin excluding special items	—		%	(127.6)		%	(19.1)		%	(64.2)		%

Income (loss) before income taxes	$	190		$	(578)		$	(100)		$	(1,381)
Add back: Special items	(186)			(112)			(841)			(214)
Less: Gain on equity investments	54			—			54			—
(Loss) excluding special items and gain on equity investments	$	(50)		$	(690)		$	(995)		$	(1,595)

Pre-tax margin excluding special items and gain on equity investments	(2.6)		%	(140.1)		%	(23.7)		%	(69.5)		%

Net income (loss)	$	130		$	(393)		$	(53)		$	(981)
Add back: Special items	(186)			(112)			(841)			(214)
Less: Income tax (expense) benefit related to special items	(55)			(28)			(250)			(53)
Less: Gain on equity investments	54			—			54			—
Less: Income tax (expense) related to gain on equity investments	(16)			—			(16)			—
Net (loss) excluding special items and gain on equity investments	$	(39)		$	(477)		$	(682)		$	(1,142)

Earnings Per Common Share:
Basic	$	0.41		$	(1.44)		$	(0.17)		$	(3.58)
Add back: Special items, net of tax	(0.41)			(0.31)			(1.86)			(0.58)
Less: Gain on equity investments, net of tax	0.12			—			0.12			—
Basic excluding special items	$	(0.12)		$	(1.75)		$	(2.15)		$	(4.16)

Diluted	$	0.40		$	(1.44)		$	(0.17)		$	(3.58)
Add back: Special items, net of tax	(0.40)			(0.31)			(1.86)			(0.58)
Less: Gain on equity investments, net of tax	0.12			—			0.12			—
Diluted excluding special items and gain on equity investments	$	(0.12)		$	(1.75)		$	(2.15)		$	(4.16)