JBLU - Earnings call transcript Q4 2018 | JetBlue Airways Corporation

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Operator

Good morning. My name is Felicia. And I would like to welcome everyone to the JetBlue Airways Fourth Quarter 2018 Earnings Conference Call.

As a reminder, today's call is being recorded. [Operator Instructions]. to Relations, call David like Director to now Investor of Fintzen. will turn over the JetBlue's I Please go ahead.

David Fintzen

call. issued Thanks, Felicia. update during our earnings this for for and joining morning, Good morning, we everyone, fourth and a presentation call. quarter will our earnings release, our thanks that us This investor we reference XXXX

All documents are investor.jetblue.com filed been have SEC. of available at those with and on our the website

Officer; Operating in materially here EVP, many therefore, Hayes, investors Officer. future York differ to St. results and from our about those Commercial Robin Executive and reliance statements Chief should Joanna our not New discuss expressed factors our and, Geraghty, place forward-looking and includes these This are to morning's undue statements. Planning; Chief our in forward-looking due Joining may Marty Officer; Priest, events. EVP, George, President me Actual on results Steve Chief Financial the call statements

from results concerning information and filed additional For Also measures. press with may release, of call, discuss the financial to during other we differ factors statements, non-GAAP several XX-Q reports our SEC. could cause please refer course our the to the that forward-looking

these to JetBlue's copy end of to Hayes, the to reconciliation a now, would available And at I Robin which please of call to CEO. refer like on turn measures For is measures, the our GAAP of earnings non-GAAP over a the tables release, our website.

Robin Hayes

I'd completion members to This my customers their an busiest our you our times the as all thank safely also impressive is January XX our to network of during at through December and airline everyone, us. XXXX. the crew from for members delivered like congratulate work start morning, joining of year. the across at destinations achievement through we like a their hard one crew to thanks XXX% Good operating XXth. I'd to our XX,XXX for with for

government air our FAA acknowledge and the and not partners, to our the significant their and the the support for hard shutdown. especially our control work Protection, want at nor federal this and TSA, Customs traffic of a impact our during partners seen At at bookings. operations point, we've Border also to professionalism continued We partners our

are the convenient efficient the air shutdown's about increasingly we However, concerned for economy and and for consequences travel overall.

tipping to We paycheck. miss about to are these close are a many as a point second employees of

will air crew longer And flight members lines, are cancellations. Our travel to customers even delays on, -- face and this to security extended the extended infrastructure rebound. the likely take and for longer it goes delays the security

must Our find this stalemate nation believes they today. a resolution to

events We will provide updates be closely monitoring if any needed. will the and

a to strengthen the continued position on of I to be the this company our proud of very JetBlue close, bringing busy we work XXXX, year to not foundation could and accomplishments. our plan In thrive. During to

in to fleets, we the with progress our kicked restyling fleet, operations. Just as our first AXXX significant to our a cities. guidance, improve and taking all-core grew negotiation focus winning need aircraft. to our strong made off and award labor to largest to our step invested AXXX XXX even plans continue EXXX the mention goal, we In grow to the X both our X of them. some and Mint ensuring replace fleet major program our we CASM cost we CAGR We X% We infrastructure gates our We executed contract. of announced our towards have completed on relevance our

our platform. Ventures travel members in our with We and new for customer lobbies, JetBlue products positioned technology experience, self-service investing crew invested Tech Products, JetBlue leadership. growth our service and completing employing subsidiaries, in Travel enhancing and XX continued to and customer digital We improve

at of comprised October, directly fleet we and control early and higher in on financial cannot produce can oil laid significant our our plan the building forward. to that pricing, create $X.XX cost We going plan EPS Day. to to for EPS will building ability but We confident margins $X owners. volatility. X our XXXX we focus economic be we the blocks, believe out Day Investor initiatives our We network to target of achieve drive of remain a value our at Investor we in fuel was growth announced on significant executing and comprehensive year blocks price will Finally for able XXXX. our returns and long-term execute believe we or our growth,

towards step strong XXXX. a in goals take to expect our XXXX financial We

and will, be pressures course, emerge. they We should nimble short-term of respond any to

relentlessly team progress we we've on our made blocks. with are executing remains the plan, on date and pleased Our to focused building our

Over with reallocations. past revenue took X fuel actions the implemented to recapture quarters, our ancillary higher we have and initiatives announced network costs

we cost the directly are after the full cost program and results seeing reductions positive important results in also of $XXX on areas capacity. in managing X delighted our the million cost control. secured fourth already of remain through unit even our savings commitment hit that reported we to year recognize the We is cost most all better-than-expected the impacts and of structural to from perhaps are can XXXX have X-year and that quarter full We flowing We seeing the cost revenue. track these earnings. approximately actions We're

of efforts. we margins see revenue jet if In but XXXX. a network higher. to and stepping move benefit expect We have prices full gone our goals, reallocation to XXXX even since drive earnings stone improved last beyond call, improvements be towards down we to and year will back continue to deliver fuel on ancillary Fuel XXXX prices work further expect the our XXXX,

us our returns continue drive loyalty the Thanks, Option and committed our execute the required path create year. plan but to on to on our and customer program We're value maturing executing drive. mindful of our X.X you. and making JetBlue revenue Fare we the this to environment, owners. our plan of ancillary are also later and putting to helping strengthening which control, proposition, remain We our for value again, the initiatives external grades over Marty, for roll ITF focused members we will believe crew

Martin George

Thank you, Robin.

on me Let with the capacity outlook Slide X. start

During fourth due in to was range which X.X% X.X%, midpoint our the our in capacity it the to the impact scheduled quarter, above above was guidance fourth to quarter due XXXX, of We capacity completion strong XXXX. flown points of X.X in is of X.X% hurricane the growth flown quarter. the call growth of

first XXXX. growth between continue and and to the capacity X% for quarter expect we For X% in X.X% XXXX, growth to X.X%, plan

margins. And on the low in higher to mid while remains believe of XXXX prices. the our be to high our still our clear, for spot sweet CASM mid in the that business we the growing of fuel continue to growth growth sustain in focus revenue that EPS relevance growth aim ex-fuel our a Our remains out target at capacity assumption a rate, single-digit we To performance. to to half manage of strengthen We be convert our solid trends cities, improve continue to single-digit range. and can build We high range. as we to and

discussed this to of block month, network implemented routes. at building our network. redeployed Moving underperforming phase Early our Investor the as second and Day we reallocation

our further RASM support will block our in building this expect margins improve and cities. focus We

reminder, to and third Beach effect took redeployments transcon during fourth markets a the of which As January the Long XXXX. network quarter changes from followed

upguage we fourth with also routes all-core cities, the a our and quarter, X our York margin newly New AXXX During from restyled and focus continued largest accretive Boston, aircraft AXXXs.

growth Lauderdale delighted for Xth RASM once outpaced system Fort consecutive quarter, the again We and that average. are

improvements in Our transcon franchise in non-Mint strong remained the Fort Mint best the also coming both Lauderdale. Mint and in markets, year-over-year with

a X strong X.X%, was network. close-in Turning to quarter We demand higher and completion factor. driven by the above point X.X from initial impact range, outlooks. guidance midpoint the with We're fourth very of trends Slide across our performance RASM ended largely quarter revenue our of the which pleased the excluding

Our RASM continued peaks much especially expectations, and improvement quarter-over-quarter. showed Then line performed trough with periods. with in the close-in in quarter, improvement in strong fourth very sequential it a

sequential RASM demand. in were strong New York continue do in parts Caribbean, of improvement we show pleased forward to and in were looking performance although our region We growth Fort Boston. with in the encouraged see to strengths, RASM we respond by and the Lauderdale capacity

our outlook. quarter fourth to Turning

At your X.XX% calendar weather. of to of We to minus and X% Up added the this we X% first year-over-year. and guide RASM. material With quarter positive quarter positively trough between shutdown, was shifts impacted we RASM which to quarter between This not impact that regards first modest have quarters. our Passover RASM impacted points have a winter in underlying second roughly the expect in modeling, be shift RASM very of X.XX%, the impact growth and first active Easter, weeks. government XXXX, date placement the demand. that by on X RASM shift an to impact seen more calendar the back translates Also guidance seen to point, of recall year, first

We modeling demand expect our in in annualized and are ancillary to made August deploy XXXX, quarter. highest we $XX to to going benefits focus uses last the on initiatives ancillary focus executing and we've million and by pricing RASM in our the our run with to first pleased but our remains around we carefully, are the ensuring strengthening our plan. In our aircraft best ancillary network. We've the been realize the changes full rate

care with calendar X revenue I turn and hard to point for points expect support like and XXXX. my RASM customers. for to their to that, add the over work We I'll to for would call the thanks taking members our continue And the to X.X initiatives executing Steve. add benefit and will our JetBlue across crew plan, of of

Stephen Priest

Adjusted highlights onetime strong GAAP up that Good Jobs control as as related X $X.XX X.X $X of Thank year, mainly signed start points XXXX. Act at the margin the into the quarter. fourth $XX costs Slide quarter performance XX% related principally transition some per diluted was and Revenue due EPS on includes contract the a pilot was signed cost law fourth to Cuts everyone. This Adjusted recently and non-fuel million fleet EPS. from EXXX to We Tax was $X.XX I'll the the end morning, from you, benefit quarter. the through well of Marty. up last year-over-year. an was to billion, reported with revenue share. XX.X%, and pretax

was Our adjusted effective rate quarter this tax XX%.

for XX% rate expect XXXX. approximately be our to tax effective We

remains I'm our full plan second both unit lower CASM Slide our capacity, pleased cost our a underlying according a initiatives program. quarter below ATC from XXXX. of our laid The our I'm guidance. ex-fuel higher successfully want year and their phenomenal we XXXX growth. managing half X-year guidance. Moving deliver cost half in opportunities budgets. hard our delighted job initial and pressures we efforts ended cost exceeded our team second guidance, including to I the did work to below capacity thank ago, manage executing the we execute inflection all We to active our of Executing pressures winter, their to XXXX XX. midpoint mitigate business and priority. and CASM to my ex-fuel mitigating first say, fourth our fuel through continuing risks adjustments JetBlue growth structural reported these for prices, #X Exactly teams and to on in cost cost-reduction finding mitigated, underlying added additional within plan and the to very

Moving XX. on to Slide

from during CASM our a minus points minus end decreased low of small to ex-fuel below X.X% benefit During quarter, includes XX factor the X.X% the improved year-over-year, of quarter. This of basis the approximately X.X%. completion guidance fourth

XXXX Our annual for X.X%. ex-growth reported CASM was

growth first range the we into between X.X% ex-fuel and expect X.X%. to CASM Looking quarter,

a last pilot approximately signed includes X-point from contract our reminder, guidance this August. As impact

second In cost as greater modified further the with from on expect range In than between of to ramp we X%. end impact largely half, fleet see efforts XX. second work XX of to continue half we the growth we be Slide cost We in and the X, ex-fuel program X% structural XXXX, of to the to result contract expect first pilot signed our half to higher of XXXX, anticipate the AXXX AXXXs. year Moving to and the the restyling XXXX. CASM the unit benefits August our

and to on report XX, Moving Slide on our our structural cost progress program.

out now We October. savings run $XXX million from achieved have called by in rate late we million XXXX, in $XXX

parts million. base $XXX We continue result initiatives, run more These renegotiated which on our expect on reset assets. nearly into some fleets examples of our helping individual progress X and sourcing the members long-term our EXXX recently between JetBlue. will components in XXX partners, current a The airplanes. and and our efforts initiatives agreements business savings productivity that for integrating seeing processes contract technology fleet, our side, cost-effective our a we we're with $XXX increasing cost result heavy and us agreements of our maintenance AXXXceo signed future are on crew as rate To million to encompass give our NEO and for throughout

Turning support improving while to customer We've and decreased making service communications more costs customer technology. levels efficient.

self-service on We thrilled of improving cost reducing and benefits network. aircraft. XX multi-proof-of-concept completed We're includes lobbies, biometrics gains. early Finally projects of which efforts, our results productivity experience, the with reinforcing our customer also up-gauging currently scale while within our

Turning to Airbus in Slide of XXXX our We been officially notified fleet. in ended NEO XXX aircraft deliveries. with by delays widely XX. known We've

recently our our we delivers announced order anticipated is last XXXX year to minimum a there when We purchase from We also shifting XXXX AXXXneo capacity July the XXXX XXXX. X guidance a of to changes for book deliveries shift Airbus AXXX our AXXX our guidance to X of to EXXXs. will our impact and as XXXX in XXXX. and CASM expect gave aircraft agreement transaction to we replace as X given or the from accordingly. There with XXXX deliveries many aircraft, in executed be Two that XX we no fleet on XXXX,

to retain our in flexibility order book. continue We

in For investor our desk of earnings order we in update. included have book reference, our anticipated appendix the section and our

aircraft additional XXXX. restyled an have restyled AXXX anticipate the XXXX, the XX balance fleet aircraft and of in We with during XX

the expect in We AXXXneo, improved latest and aircraft. we costs reduced fuel includes NPS our This to technology restyled year, take efficiency. first on continue to scores which see also unit the

CapEx $X.X a $X.X Given the to to our of billion our anticipated for are changes billion. to billion, order $X.X range recent range $X.X book, lowering and guidance increasing and to in XXXX of XXXX we billion guidance our

Our our engines aircraft CapEx is restyling focused efforts. on and purchasing

XX. to Turning Slide

cash and in the revenue. of quarter, investments XX-month million an debt closed aircraft raised in debt. debt-to-cap XX%, our quarter and million secured we with ratio was This of XX.X% adjusted $XXX $XX nearly We repaid and trailing

strong allow balance remaining million to of We our sheet to capital under us repurchase authorization business opportunistically to continues to and Our excess to balance a have in invest return owners. the $XXX shares. currently

to turn their would our our create to crew for hard thank for further members work our I we value Q&A, customers like Before owners. helping and in

to grow emerging cost We our thrilled of the see are to margins benefits and earnings. resetting unit our trajectory

your take now will We questions.

David Fintzen

ahead the instructions. for Felicia, the with Thanks, now the we session are everyone. ready question-and-answer analysts. go Please with

Operator

Instructions]. [Operator

of Our Morgan. JP comes first question Jamie Baker from

Jamie Baker

you through that influence snow I'm to weather the will the degree quarter then really on, So come on us cost range don't capacity better the the the achieved. moves live think that any, for the high about your IROPs the has flake the conclusion how Can never CASM color? understood as the we see of it to that Northeast, guide in and at think degree, X.X% ex-fuel which end help X.X% if and is I if how in on if that as foregone influence any first understand outcome? is a much assumptions weather just we really X.X% ex-fuel the about ourselves we another CASM quarter, the

Stephen Priest

in pick and Steve and are budget the Jamie. Hi, a fly, our inclement that I'll the for in one the the used this typical Jamie, winter Northeast during very up. here. we cities we to based winter weather focus on generally network we Northeast.

a specific is, and seasonal would is a us it you So storms, change you should anything plan a us winter that's prolonged item. winter. winter time would what a standard think we saw what budget of and guide and only when out I about you you The with about we normal if But that's what for. differently for number capacity challenging think think pretty guidance, a we see call then see

guide We expect. guide patterns That's capacity quarter of our put that that included normal weather we'd out all have our CASM for in and we X XXXX.

Jamie Baker

winters one those of imply would that if more midrange outcome we less? sort have or typical So of a

Stephen Priest

correct. Yes, absolutely

Jamie Baker

price that went realize is carrier to just I didn't accretive. similarly it out specifically does X.X we phases? have how markets overlap lower economy already. has ultra question, Also may for and I'm points. risk? trying assess is at go for been about any it how offerings. of others. that Fare roll basic I I does should some those JetBlue does X.X, smoothly, X.X it helps. price be realize low-cost Okay, you all execution thinking Options fares but likely accretive second systemwide introduce X.X in lower identify And once mean, or On live out there it

Martin George

I at economic our for by [indiscernible] X.X. I would looking gave was Options in looked X.X. of Thanks base. I'm we're price the Fare from combination We've points Investor with side, customers as very Marty. far perspective, the different other these question. Options and most that at get more price speak it's bundles created carriers, love I'll that Jamie, And as which different the having customer just execution the we as far help risk very the how of Day execution is, Fare the From for guide points with we the an benefits in as X.X successful segment, forward value. the comfortable

Jamie Baker

once? at And roll out you will all

Martin George

Well, again.

different We'll pricing business I like we had a for it's test of most learn going fourth with normal going back earlier, individual 'XX and of just and quarter to us, event sort It's bundles. forward think in initiatives do said it's markets, really today. we like of what with JetBlue. just course

Operator

Pfennigwerth with Your next Evercore. comes from question Duane

Duane Pfennigwerth

respect with on give cetera? ramping backup? split an in you longer-term you what Just see et revenue that on are update your where to off. And you attach Can rates, us JetBlue vacations you've opportunity that the

Robin Hayes

I'll it's take that. Robin. Duane,

middle issues of cycled some had sort that in a we previously, now definitely the year. highlighted We challenged cutover news had in that are were with as we XXXX back with good we think QX, we of, look XXXX. against and we've the we as The is that, were sort transparent. of I that we at,

We of travel on, some who to products that as businesses has a of our numbers very we're can EPS the we're hit we are Andres, we back president shared now his to that and is that where of of part we're There our team, a look were -- build XXXX forward. different working space. is our tech trajectory in sort number new taken goal. hired and they've comfortable

Duane Pfennigwerth

could where you rates where then, can you update and think attach them are And you us today on sorry, get to?

Robin Hayes

before rate of attach we talked So our about sort single-digits. very in low

the course, Of X.X%.

we said Day. X.X% think, I Investor at

So higher But take Caribbean already. me you certain increase the opportunity the know We that's should that's an -- a that. year rate attach rate. and is X.X% rounding, certainly markets focus of I the not team we the where that to signaling first and those X as in Duane, see do fruit. so than customers. and think hanging low very the improvement It's incremental or on sort now is attach But the of average,

this converting do job to customers. have over them a the We than flight. better They're the product product have just today. We buying to other JetBlue

focus And to upside on, seen we've so rate. attach what that's the is that

Duane Pfennigwerth

that and fourth already. if the year? And are I for of quarter my of how many the But that AXXXs do then course said you number year? currently? you restyled the see just So And what's this by over how it progressing follow-up, apologize

Stephen Priest

it's here. Duane, Steve

have aircraft. completed As additional year, by XX now aircraft. of done. X end got an we We XXXX, running. we We end XX And XX have the lines restyled of will completed the of the

the total XX So by you can year-end. expect

Operator

Sachs. Your next with Catherine from O'Brien Goldman question comes

Catherine O'Brien

this of about for What's how gauge, really think International some combination maybe on versus Maybe be on then a year. on to of question it And just that? complexion both? destination, domestic capacity that color the driving growth the would Is your helpful?

Martin George

for Thanks the question. Matty. it's Cate,

we little light earlier So that on fleet if of our extent of focused on Florida XXX look a took focused are call, bit is of the in gauge geographically, be you year, direction XXXX at will our last growth the Mint transcon. we I our all-core while. lesser at and on to plan a Caribbean, and year This the think configuration. stage. very much Steve I the And getting and definitely growth this year last still will especially a mention from changes announced the configured for that planes some end

both plans very with I Mint and Steve has our margin how airplanes of are those think, as earlier, had said happy grown. highest

more the going we in unannounced some Mint we're think to for while switch before a I of take some to planes all-core the future. at back point

Catherine O'Brien

got maybe one Steve. it. for Okay, And

what main And we run to now on rate So million buckets $XXX get to these when expect full biggest your left million? you've to program the on cost are the $XXX should update locked million from $XXX in items?

Stephen Priest

very million refer terms delighted we Catherine, wanted the XXXX. with the firstly comments initiatives my that for to of basically And And a we've that thanks been XXX progress say, in just much prepared had I made. we've I back for question. underway. to $XXX where there's completed rate all are I've run

you We refer items. And can of if bit those continue significant of our XX deck, on a you color to little those. Page against to see execute

-- XXX pillars think with, the the forward power on of components areas got which that will progress of one operations, I also we where out doing a we've technical the aircraft, work as more RFP the suppose, we to are our XXXX. of VXXXX the around we progress one I be continue final bigger that engines through is, couple X Airbus that and

excited they've tremendous through to that. CSS over told more and and with -- then be distribution. sourcing well as on the there's and XXXX investors XXXX, continues the going RFP our underway. made progress from core go and in in And calls other come heavily and strategic invested got about pillar, is XXXX we've that in we've outsourcing team our leadership, we so The to our before that's area the you earnings forward, We've about

plenty in going to we're get I go, $XXX of So track in of well glide am initiatives on confident terms million and have forward. the the to we There's to $XXX million. that to path

Operator

Michael Linenberg from Bank. comes of question Deutsche next Your

Michael Linenberg

as Two at maybe think for to, year you to Robin, guess, pertains version Airbus the narrow transatlantic, is about Robin. body. first it decision questions launching longer think as of haul here. and guess, XXXX least the I I I that the or

hearing sort about points from some as and as geopolitical some about talking $X.XX commentary that as think other seeing be carriers issues. that data that well, that asking well you transatlantic the the the sort pause? the may see and EPS As give we're of And of then of also this there softness up some you coming we're within from the in XXXX. of of I'm that to for you Does $X context target of hitting some

You it's Does parts? it put you Atlantic, about that's do And consider to be you think XXXX a you sort that if given all together. just of do XXXX, the going pause? phenomenon? moving all give those something that How

Robin Hayes

Mike, thanks the for question.

and how As guide we what York, about geared transatlantic said our think around us ultimately how relevance. thoughts, out And Boston I very will we before, it's is when talked about much build margin. New we

these European of markets of some largest the some now markets serve. like Boston we in And the don't that London and

the take airport and access so that things to the do fly time. we we And certification, issues a at work those way Obviously, time. ETOPS terms margin. there context. choice that of of number at Europe, take decision through if we drive are But most to need we in may other really that's to add take the any any going What to route we decision other look is the is that that new in important same

the Clearly, during be economic factors of I year, of we Now on market. at fly launched to things these tend of fare if that we we today. decision transatlantic, have And these, number a come. think transcon those communicate a sort has when Mint say that to -- were the will itself customers and strong we're as mindful than but premium paying of expect in are paying the are course opportunity cyclical. do sort And -- to stimulation most not we I lower very on the on the offer And anything a of effect people saw a ready significant now. that on Mint XXXX, the we a in much is offering to

of them. relatively we those it a evaluating we're ASM all will of if were still even to into small So our go, But part and big things constantly would remain cost put part, structure. that overall a

Michael Linenberg

to relates great. second it Joanna Robin ops. to as either maybe even Okay, And question or my just

dealing I past maintain come and schedule, mean, was the for I through over most more think too Boston conservative of on had other think, North probably So of think I of some of your The comes tried approach noticed, this its maybe afterwards days Northeast. JetBlue somebody a weather canceled drove it? storms carrier, did And have all challenge. the quickly to they is we it not. I they week, in was moved the basically lot others and your And the I that a one to semblance given that carriers bit what lot through, through Boston that flow with in a more your and or realized conservative a assets I a just that you of fact bit when it -- but know take York. Boston, day you intents -- shutdown do centric still were Eastern do and New a little traffic, of purposes, maybe all

Joanna Geraghty

for so question. the Thanks much

the XX, schedule, a portions that area, unpleasant XX the operate to of So exceeded believe at look at think when challenges known you X, based the if from Boston on faced based decisions. the decision their for we in we the to other upon guides hours. some us on And And perspective, customer decision. plan that's our that's our the saw I time. And Sunday And correct a cancellation Boston plane what cancel those rather of forecast carriers trying forecast strategy delays actually you experience. the X, was

plan over the weekend in forecast. I have. our we actually resources Robin So operation and and based our upon were based that the on operation into the We up we Boston plan I recovery that And struggled continue if some challenges. firsthand. the of the in you saw of so think Monday, look weather the we terms Boston given conditions the with icing Boston,

So of real which those other a lot well. up time, Sunday as Unfortunately, ended being is a cancel carriers optimal on for lot anybody. not

Robin Hayes

the Michael, Monday delay just was up we biggest challenge, the was back were And running. we actually to to because to get and Joanna's hours slow on ground had bit point it the X during field because programs. open there. day,

we them And as cancel a you or become whether and should experience call judgment you to so want whether and advance, come protect airport this to the does in customers delay. to other flights long into

we So experienced at very team that. have looking a

anybody I than through good overall been our all a geography, these balancing of think our team very, did very this else factors. and because of we've more job

Operator

Your Brandon Oglenski from Barclays. next with question comes

Brandon Oglenski

Robin, to just is the the here, the thought. the guess, than outlook wrong initial down, with it positive I is side, we in bit lot look But quarter. -- a single aspects there like initially higher on But mean up, the the here don't step feels to the little cost focus XXXX, metrics revenue I side. RASM here maybe CASM of on we potentially story a through direction. when at want and I here the

and we we think get so reconcile of as we more view just anything? do timing So lot this? revenue how quarter, second this back do in a than should And this

Robin Hayes

it. question thinking hasn't and want answered Steve? that to throw answer to I Steve to few, a a because out in Brandon, he's he

Stephen Priest

Brandon, not from X. of standpoint, Easter Passover things. quarter let's From points X X quarter the moves and that shift to a couple about forget RASM the

earlier heard QX house the the of So Marty, timing. environment. -- And soft side you is comments Marty's current of purely RASM about prepared the

trajectory explaining it's a full in it what's bit little the happening CASM is because time the little choppiness. the a quarter bit for candidly, spending year on think I worth of probably of

from The the around when path first out. for have that maintenance time want on our thing and XXXX the say to our we performance. CASM with elements been CAGR I is X and structural move where program choppiness has our delivers with look on be hit to underlying had to which do of to we've laid and us is QX, cost negative in impact commitment I around I does cost CASM to at underlying The materials do keeps that very that quarter-to-quarter. really is line it the need that X Airbus engines pleased And plan,

not a costs laid XXXX And so are as shown. reference take I basis look on a QX, you our a progressed And would you point. and encourage quarter-to-quarter the at HX XXXX unit out quarter-by-quarter maintenance basis both why both how we a they see that's that HX see to for guide XXXX. and savings a and equally on

deck, which we of Slide XX As clarifies that the showed choppiness. really of sort in

the we that you would doing exactly I how each look at out versus we're standpoint and exactly the And So XXXX, and we you in exactly at HX from delivered. for laid to it's same. It's encourage XXXX, HX quarter. process look

the as year. with and So what we go I'm exactly very, very pleased outlines progression through we're 'XX for guide going with 'XX. I'm pleased we trajectory in make the the very to delivered cost that the

Brandon Oglenski

the and tech a I appreciate in XXXX that at big Do contracts to savings guys deliver And that, ago meeting. that get on the to recently maintenance you I was years those Steve. analyst lower? even portion goals highlighted you believe that of you X and have CASM ops guess, place

Stephen Priest

NEO's engines and business. because those, the over would strategically at with for our percentages over existing been maintenance, the Brandon. the we GE as laid We XX we have, number last say, we significant of a yet, disproportionately on Investor our the out Again, have not we VXXXX with on of we our good actually the as both on focused years. looking a fleet progress significant have fleet. fleet the the And in mind be CFXX on fleet over significant the Day, when the go The is initiatives months we at it I Airbus and been AXXXs. engines on it's seen CASM done EXXXs bearing cost forward. made and Airbus increase And journey The through we've news firstly

proportion leverage PMA. We parts, of deals, more those using have not a bigger only some been generic we and been used but which call materials some using from we're them

engines. In are both optimization who with addition at servicing the to MRO's looking scope those

track. are, on large for And So the as in which to a we I earlier, more there is RFP going is nicely mentioned engines forward, VXXXX come.

trajectory before, laying because to long-term. to need confident the we're I've quarter-to-quarter Look As execute CASM for I'm cost confident we it the said look at resetting maintenance rush maintenance CASM. are out we're the to going we team and what I'm not savings But deliver. for what at for in our XXXX XXXX. for CASM the in path,

Operator

Citi with question from Group. Kevin Crissey Your comes next

Kevin Crissey

integrity off, line hiring management in Dave something Talking this have of I competitive revenue about room. Would evolution, without responsibilities management so a part you're I the, as be away to as kind the you My revenue apologize. doing is he revenue Marty Maybe able for tools essential kind a management, it's revenue or with see of if robotics. the as the of NextGen about in things talk Clark, position called I the that doubt any repeat. you giving one information? obviously, cut well for is

Martin George

we it's a JetBlue of it's Listen, say No. pricing, effort there. I and We working management, lot a would than airline, to of and year sizing carry very management spent of individual customer a have I bundles would see of it's lot model point-to-point started about think, -- perspective, with what's encompassing, thing when customers. a last figure my the pricing the view comes models. pricing year revenue of Thanks to question. number our earlier think we little different I [indiscernible] and last revenue primarily what from our inventory, one it for competitors. of the opportunities relatively years a is, like be in trying We're We all out again, future things is simplistic its of a most the

we because we but any I and announce. I are do mean, very details opportunity are competitors we great I own think have follower really that is not a a are, we things, our there think don't of here. to sort a lot like of our optimistic about it.

to I announce right lot that would of going of a and We think of than but be imagine. that, in is learning upside. AI the now. lot progress an we much going to made We world even not it's much, bigger realize awful we're machine

Kevin Crissey

something Okay. RFP I an I'm an update it's I I know reservation maybe question on or Do difficult like just that answer. that remember or missed system totally or to maybe for wrong.

Stephen Priest

Kevin, it's Steve here.

a As had about are. opportunities I -- you dropped asked Catherine unfortunately similar the what question off.

announce moment we have to certainly know So anything will. RFP we don't at and the we when

Operator

Your James. with Raymond next comes Savi Syth question from

Savanthi Syth

the to core wanted trends. just bit little on clarify RASM I

go issues. think to there though have it of from by really I growth, even seeing contribution. network real Is are the but you X.X% X.XX%, growth not ancillary driven schedule-to-schedule quarter, last kind of some and of because kind capacity was You the that capacity capacity was higher

Just kind core of side? there trend the curious the sequential on about

Martin George

Savi, it's Marty.

we've if that view. look the I was. our year like been I is seeing more along actually of all where our at other entire is midpoint think you our performance in blip sort across very was fourth of quarter really we've sort This than which think We're not our growth. guidance less at in third with for or thought We're consistent on the look of chugging we the handle two slowing in material just out it and laid X.XX%, XXXX, in the is quarter. guidance it cleaned basically RASM first --

Savanthi Syth

transcon. trends was of you curious going kind that That's is helpful. there. now of on know kind is itself? accelerating, city in just called And because contribution strong. Mint I of just out on you And to revenue unit focus lapping the Mint Are trend just decelerating it kind then of I breakout. the is fully the probably kind seeing similar, kind consistent of the is are or of

Martin George

in doing One transcon about Mint both thing thing non-Mint I'll the -- give about one the you travel. performance, regional markets. our to specifically is and well Mint respect Mint, premium With

RASM and growth Mint mid-to is the up Our in is X% high-teens. capacity the

see We you I why. any product for it, who of amazing continue to have recognized demand think this you've for flown

product You and the delivery been up. of and air, has And opportunity that RASM It ground both frankly, no industry the absolutely great have upgrades. had provide combination us. and everyday using on our best the really an get a in with crew no maximizing members in for the margin that low pricing to builder trouble we've service and as the

Operator

Your next with Research. Hunter Wolfe comes question Keay from

Hunter Keay

I you a you of, with that's sort Robin, forming in vocal have pursuing and it? foreign to And know, in your JVs to to International codeshare, dovetail does do guys down opposition decide but your International the you that curious pretty opposition when from I'm with preclude JV airlines. road path JV, a going U.S. the own Obviously, if of guys airlines the plans. been difference kind to

Robin Hayes

JVs, we the it. a for we've clarify, to question. comments thanks not competition better in are said have necessarily they around actually entrant number -- to is we're of given. allow promote Hunter, opposed new my Actually, and talks just public to need to I've but What conditions

for example, that the were X in being final Aeromexico we up Delta order. proposed landed our you that if remedies there filing, So look,

the competition. exclusivity to as barrier remove to because was first The provisions that act a we believe those

work come were we us, want unable us, JVs, in who to who other to airlines they Now with are so. do have but

line, X-years when time don't things approved again, be Delta in is, authorities we a line promote so, these Aeromexico and forever. the was fly adopted time do joint they Other are around to into that joint put airports, get to these and a to the X-year needs to competition. regulatory X Secondly, because that proposed ventures venture. actually divested And congested third thing slot it

entrants needs other be better JVs with that a Hope if compete against was se. successful. It of and again, on that. the It that airlines have comments -- so, clarifying being a we can chance And there continue, they per are to helps so very our wasn't of and new language. a protection in clearly sort no

Hunter Keay

NDC can related a is really why there? that see missing is unless mistake, and I is don't understand doing, and angle are But unique guys to why in On something there related. bucket. then know And you that me help Slide system I'm maybe multiyear it an you mean, Steve. some it. you contract this new I kind aircraft XX, for distribution appreciate dropped it's question the for I curious something into IFE good. That's of I'm with

Stephen Priest

perfectly out Hunter, Cost We're for December Program pillars. pillars And not being that Structural of at each cute the those fits X back into not great Hunter. is key The laid us question. initiatives all, thing of XXXX. all we in

you're couple in of descriptions. the so And of going see terms to a outliers

do we as our is analysts. last want you investors, to the guys to have noticed stop and So thing confusing

pleased So it RFP It's it. is with the what be. system, you We're that we it IFE to with. would results an of out went expect

specific under So nothing happens just to that a that be initiative It's pillar. to see here.

Operator

Your next question comes with from Becker Cowen. Helane

Helane Becker

and XX debt you So have year balance this we for slide guess, if and XXXX about I your look as as repayment. well I as natural, sheet, CapEx on at think the page --

we of two your financing aircraft One, priority in about are year deliveries two, your from now, questions. paying and you or thinking are how So of after slide, should you the think CapEx market the other investments. cash? thinking decisions And a

Stephen Priest

of set look the Helane, to peer level, proud the U.S., XX% we I balance when we to flow in I at sort close debt-to-cap between about when see the delivered strength see in have the and XXXX, I of in. you'll when and sheet. pleased the our aircraft XX as the XX first free thing I pleased To normal that place a is adjusted be would certainly liquidity balance start honest, how JetBlue our purchases, K. to would say say I it's we course the sheet of first of shape think am cash a of results it's across I'm the like with business. mean, to to

and XXXX free and cash continued XXXX. flow to continue We generation forecast expect during

throw about that. of deployments we the as best will, business, We thinking the cash of we're

we ever as balanced the really approach capital So allocation. to with continue

forward, of happy markets keep as sort going trajectory very debt of and very, the of JetBlue's to to a I'm the updated. confident going And we'll with forward. But blend purchase aircraft expect to and again, sheet. raises continue continue could things balance progress You cash

Operator

Joseph Your next question from comes from DeNardi Stifel.

Joseph DeNardi

seems it airlines RASM America commentary heard Marty, trends. positive some we've other from South like Latin, about

makes that what exposure guys what forward. your comment it on exposure of Puerto Rico, business seeing kind you going have about expectations a Just you're are and from you are? just piece but talk your can unique, little there your of in maybe given what The there, expectation your bit

Martin George

Sure.

flows. sort at I it's seen Latin real think we different capacity spotty into come region. the some -- non-hurricane think been But story only XXXX when hurricane-impacted in I optimistic hurricane some of now. and for look markets, have capacity markets performance again, bag We're there. really the has of places. is, high or ebs very of our It's markets. we our Certainly position Caribbean. on not It's for mix point several bit years overall, a It's the a

we any think I this look So don't of as at a market-term trend.

Joseph DeNardi

give just Okay. peak book, the us, profile. based order Steve, CapEx and you Can then, your what CapEx And on just just current on that when is given book?

Stephen Priest

we I in that. appendix is our That of as progresses we're replacement Yes, think of organic growth. it's should laid very, addition how to through what the morning. presentation Obviously, very book the through We're out sort delivery in our is this of the you fleet good think question. schedule order about navigate EXXX C -- moving a

from incredibly and accretive of AXXXs. in both to the transition as start can revenue you see where margin we and the think I peaks XXXX the the from that EXXX to XXXX, standpoint

will little probably you're it XXXX. bit. think So peak ramp a And thinking about in I 'XX,

was CapEx the XXXX. sort aircraft and the thing of seeing to alluded we've which that in presented X with XXXX, deck And I directional NEO in comments, guide, we've is at we've looked prepared aircraft. given the a other minimum we're of in The in is, and my that shift

with should Airbus you'll 'XX, of in 'XX, as that. to through 'XX forward. it But sense continue get a peak go way some we we we in progress work as So as

Joseph DeNardi

to expectation CapEx book? finance be Steve, are enough to the you generate the to that JetBlue that is sheet be balance be to to of and environment performance the going that cash to order just willing business use enough to is the have the or going business is -- -- support good

Stephen Priest

that from sort As incredibly today, balance previous the I've it foundation the of that. absolutely focused of important. JetBlue think in question we're Helane mentioned on came look would jet about about was is a through macro I And that. sheet associated even plan a environment was it. compelling very in a I out for encourage talking with to you with laid We XXXX, and at fuel XXX to I

We'll on macro eye about confident we're continue the obviously the environment. keep a path. close to So

other we The our level order I of in say, thing, flexibility have a would significant book.

then at margin. So we'll continue going to to is that. look the thing JetBlue is drive key finally, And that

forward. right both investments will relative going sure the the and investments we absolute we're and to make so And margins driving that CapEx fleet make right

through into few we'll that decisions that So years. navigate as the the next progress we plays

Operator

[Operator Instructions].

from Caiado Suisse. comes question with next Crédit Joe Your

Jose Caiado

enable of right follow-up about offerings, of to question Kevin some Day, I but capability. was on basic you're Fare successful implementation something working of to those First announce new new tied I tools? you're the should Options, help And in to also asking management you've distribution said these to a a QX new new as product is timing Marty, economy. also merchandising, investing have tools and got now, basic recognize Investor the nothing earlier. revenue the we economy new but with you of think on the in development about launch At

Martin George

doing the dynamic not some work the we're Joe, I I already question. of say, together tie those we're some would that with for explicitly. modeling would things thanks doing.

go leisure I'd the same think, back competitors I And our necessarily don't big opportunities business. we about very bang than evolution an follow some as orthodoxy opportunity We to I do. of primarily primarily have of that that going this to have call the direct but the really we to revolution, business, So would there. optimistic out not a we're again, be launch there's everything. rather see

there here. we is So us think a opportunity for great

Jose Caiado

my also on long-term expansion Got kind And focused big is picture second then it, a of thanks. a transatlantic. potential into the question

AXXXs going next that's beginning year, fleet. to replace got EXXX the the you've and obviously So coming

of potential AXXXLR anything. was not recent trigger, I I to pull you certification all you're expansion the go just around and the comments on focused into Your as ready am know decide to you consider fleet kind evaluate you ahead you market? But off just I Do AXXX given transatlantic transatlantic or flexibility here? for could platform fly platform, the the the that announce European consider if to the wondering, for way and ETOP potential deploying its service transatlantic, ability that

Robin Hayes

question. No. for the Thanks

that. So, I'll take Robin,

we role replace of As the XXX. the primary AXXX the is said to

European a focus around the our our JFK And thinking so really of cities have Most that and around the of expansion from is been platform. Boston focus. potential XXXLR

I emerge, beyond think this opportunities the time there a -- time lot but so be lots we're may of that's into far the of in that different at spending future that that active considering.

David Fintzen

great And fourth that conference concludes Have XXXX our Thanks joining call. quarter day. for us. a

Operator

Thank call. And XXXX that quarter your you concludes for fourth our participation. conference

JetBlue Airways (JBLU) 24 Jan 192018 Q4 Earnings call transcript