JetBlue Airways Investor Relations
Lisa Studness
(718) 709-2202
ir@jetblue.com
Investor Update
April 22, 2008
This investor update provides our investor guidance for the second quarter ending June 30, 2008 and full year 2008.
Current News
JetBlue has recently announced service to the following new city pairs:
City Pair |
| Frequency |
| Start Date |
Austin, TX – Fort Lauderdale, FL |
| 1x |
| May 1, 2008 |
Austin, TX – Long Beach, CA |
| 1x |
| May 1, 2008 |
Austin, TX – Orlando, FL |
| 1x |
| May 1, 2008 |
Austin, TX – San Francisco, CA |
| 1x |
| May 1, 2008 |
Boston, MA – Chicago, IL |
| 1x |
| May 1, 2008 |
Boston, MA – New Orleans, LA |
| 1x |
| May 1, 2008 |
Salt Lake City, UT – Las Vegas, NV |
| 1x |
| May 1, 2008 |
Burbank, CA – Las Vegas, NV |
| 1x |
| May 21, 2008 |
Long Beach, CA – Seattle, WA |
| 2x |
| May 21, 2008 |
Long Beach, CA – San Jose, CA |
| 3x |
| May 21, 2008 |
San Diego, CA – Seattle, WA |
| 1x |
| May 21, 2008 |
Washington, DC (IAD) – Burbank, CA |
| 2x |
| May 21, 2008 |
Specific details regarding frequency and start dates can be found on our web site www.jetblue.com.
Capacity Growth
(Year over year percentage growth range)
|
| Second Quarter 2008 |
| Full Year 2008 |
Available Seat Miles (ASMs) |
| 3-5% |
| 3-5% |
ASMs by Aircraft Type as a Percentage of Total ASMs
|
| Second Quarter 2008 |
| Full Year 2008 |
| ||||
| A320 |
| E190 |
| A320 |
| E190 |
| |
Estimated ASMs by Aircraft Type as a Percentage of Total ASMs |
| 87% | 13% | 87% | 13% | ||||
Our average stage length is projected to be approximately 1,141 miles in the second quarter of 2008 versus 1,135 miles in the same prior year period and approximately 1,134 miles for the full year 2008 versus 1,129 miles for full year 2007.
Aircraft Delivery Schedule
As of March 31, 2008, our fleet was comprised of 107 Airbus A320 aircraft and 34 EMBRAER 190 aircraft and we had on order 138 aircraft, which are scheduled for delivery through 2015 (on a relatively even basis during each year), with options to acquire 123 additional aircraft. The 2008 delivery schedule and related financings for the remainder of the year are:
|
| A320 |
| Committed Financing |
| E190 |
| Committed Financing |
| ||||
|
| Mortgage |
| Lease |
|
| Mortgage |
| Lease |
| |||
Q2 ‘08 |
| 3 |
| 3 |
|
|
| 2 |
| 2 |
|
|
|
Q3 ‘08 |
| 3 |
| 3 |
|
|
|
|
|
|
|
|
|
Q4 ‘08 |
| 3 |
| 3 |
|
|
| 1 |
| 1 |
|
|
|
Total at Year End* |
| 107 |
| 83 |
| 24 |
| 37 |
| 6 |
| 30 |
|
*The total fleet included in the table above includes the sale of nine Airbus A320 aircraft in 2008. In 2008, JetBlue plans to sell four Airbus A320 aircraft during the second quarter, one Airbus A320 aircraft during the third quarter, and four Airbus A320 aircraft during the fourth quarter.
Passenger Revenue per Available Seat Mile (PRASM)
(Estimated year over year percentage improvement)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated PRASM |
| 8-10% |
| 12-14% |
Revenue per Available Seat Mile (RASM)
(Estimated year over year percentage improvement)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated RASM |
| 12-14% |
| 16-18% |
Cost per Available Seat Mile (CASM) at Assumed Fuel Cost
(Estimated year over year percentage increases)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated CASM |
| 22-24% |
| 20-22% |
Cost per Available Seat Mile (CASM) Excluding Fuel
(Estimated year over year percentage increases)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated Ex-fuel CASM |
| 6-8% |
| 6-8% |
Operating Margin
(Estimated operating margin range)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated Operating Margin Range |
| 1-3% |
| 2-4% |
Income (Loss) Before Income Taxes
(Estimated pre-tax margin range)
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated Pre-tax Margin Range |
| (3)-(1)% |
| (2)-0% |
Tax Rate
We currently expect an annual effective tax rate of approximately 36%. However, our actual tax rate in both second quarter and full year 2008 could differ due to the non-deductibility of certain items for tax purposes.
Fuel Hedges
We continue to enter into advanced fuel derivative agreements to reduce our exposure to fluctuations in fuel price. As of April 17, 2008, the agreements covering the full year 2008 are:
|
| Gallons |
| Price |
Q2 ‘08 |
| 54 million (46%) |
| 11% in heat collars with the average cap at $2.19/gal and the average put at $1.85/gal 35% in heat swaps at an average of $2.56/gal |
Q3 ‘08 |
| 39 million (33%) |
| 33% in heat swaps at an average of $2.54/gal |
Q4 ‘08 |
| 26 million (23%) |
| 23% in heat swaps at an average of $2.72/gal |
|
| Second Quarter 2008 |
| Full Year 2008 |
Estimated Fuel Gallons Consumed |
| 118 million |
| 465 million |
Estimated Average Fuel Price per Gallon, Net of Hedges |
| $3.09 |
| $3.05 |
Stock Based Compensation Expense
We estimate that our stock compensation expense under FAS 123(R) will be approximately $4 million in the second quarter of 2008 and will total approximately $14 million for the full year 2008.
Weighted Average Shares Outstanding
(millions)
Share count estimates for calculating basic and diluted earnings per share are:
Second Quarter 2008 |
| Full Year 2008 |
| ||||
Basic |
| Diluted |
| Basic |
| Diluted |
|
225.2 |
| 225.2 |
| 222.8 |
| 222.8 |
|
These share count estimates assume 20% annual stock price appreciation and are based on several assumptions. The number of shares used in our actual earnings per share calculation will likely be different from those stated above.
Capital Expenditures
(millions)
|
| Second Quarter 2008 |
| Full Year 2008 |
Aircraft |
| $185 |
| $700 |
Non-aircraft* |
| $35 |
| $150 |
Total |
| $220 |
| $850 |
*2008 non-aircraft capital expenditure estimate includes $40 million in leasehold improvements related to construction of the Company’s new terminal at JFK, of which $15 million is expected to be spent in the second quarter.
This investor update contains statements of a forward-looking nature which represent our management’s beliefs and assumptions concerning future events. 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, our extremely competitive industry; increases in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy, including the ability to operate reliably the EMBRAER 190 aircraft; our significant fixed obligations; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market and the effect of increased congestion in this market; our reliance on automated systems and technology; our being subject to potential unionization; our reliance on a limited number of suppliers; changes in or additional government regulation; changes in our industry due to other airlines’ financial condition; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to, the Company’s 2007 Annual Report on Form 10-K. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.