JBLU - Earnings call transcript Q2 2020 | JetBlue Airways Corporation

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Operator

Good morning. My name is Nora. I would like to welcome everyone to the JetBlue Airways Second Quarter 2020 Earnings Conference Call.

As a reminder, today’s call is being recorded. At this time, all participants are in a listen-only mode. to Investor call Relations, like Vice to now of President David would turn over the JetBlue’s I Fintzen. Please go ahead.

David Fintzen

Thanks, for joining during this XXXX everyone, update, and and our our we’ll earnings morning, morning quarter reference presentation our This earnings Nora. second call. investor issued release, call. a us Good for we thanks

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

Officer; in here Priest, Hayes, York to Geraghty, results Chief our and Robin Executive Officer. our Also Steve New discuss our joining Q&A are Operating Chief of Head us Planning; future VP Revenue differ Joining Laurence, call and Revenue Joanna may place This therefore, Financial and in President our for me Officer; Dave materially statements. Scott from and are and Sales on those not should of And forward-looking undue many Clark, factors. Actual reliance to events. these statements expressed investors due results statements Management. about the morning’s includes forward-looking Chief

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

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

Robin Hayes

Dave. joining you us. for good and everyone thank Thanks, And morning,

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Turning to of four presentation. slide our

demand per we operations are emerge sheet still our For February, resize past fall in two burn remains quick Despite raised April, day take the the the billion in the our actions in to taking burn track protect our months, to environment. among gap quarter, recovery. a demand to manage industry. liquidity in million reflects and to recent the and of JetBlue $X loss softening have reported In second a a we between Since truly late that on the we quarter. balance Despite in reducing decisive staggering this in third been have $X we and cash dynamic $X stronger in steep in to we $X.XX nearly as been million demand, a reporting share. progress loss strongest started we’ve the to in that made cash

we While changing remain progress April, focused as demand from trends materially we historic choppy in we the the summer. and have remain thought improved low bookings addressing on

not demand. are to respond Our quickly cases see their friends. linear, our But willing smaller and It to likely that seen size we impacted allows in Scott highly have network quarantine would in that recovery continues but us be COVID be by family travel this to changes and spikes measures. is customers to to

confident leisure low model, will cost, coupled in low We recovery. central brand fare instrumental, and our with be our trusted navigating are that

comprehensive rebuilding the ground of recovery customers’ crisis, Let’s call flying of in we move this created We from safety At approach five up. again. starts onset recognize a we the slide on to competence that our with presentation.

emerge precautions to with stronger and out to and Our the years. step members safe air. of health We’ve crew and been course so protocols, customers taking three over set ground laid for all has our the on on focus that recovery safety up a are coming the and in JetBlue success, framework

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to is rebuild step second margins. The our

are the front, believe revenue and is. On accelerate on working it and series a we our working our of recovery through focus will - relevance revenue are initiatives strengthen we that we

on We repurposing network unique strategic our product to and competitive stronger are our service and more customers. and us and assets will seizing us more opportunities actions superior make entering These ultimately bring into make partnerships.

executing JetBlue and be our provide of details low to resizing again down our pivotal will costs the double on to cost mitigate efforts shortly our that model. We our rebuilding we’re On lower will Steve to cost front, the meaningfully impact demand margins. about on believe

The balance is sheet. and to step third last repair our

our committed Mint longer-term, thank start York new launching pandemic. to in to operations amount our to West Although, a we JetBlue for moment the the JetBlue to grow believe the of network July recovery, like Transcon term, Coast, to to city, the cash to out our and Beach. significant between Long new put and respond On base will continuing this a moving short presence airport have to we’ve substantial the I touch will returning flying Beach more from the assets raised in and position liquidity to Airports primary it efforts metrics. XX to announced was their including with a I’d that October. our generate the including period, New leveraged We future, pre-COVID of service work competition In upon strategically focus Long and grow our our to New briefly flying strengthen not we take the Service efforts in World support are LA markets, will place LA. continued recently of to want reallocation for a of demand. our in award-winning just network near Los position of our to strategy prior move In in York, International bring possible support, at Angeles we

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Joanna Geraghty

and shout and out months members. like professionalism, we I’d was caring have with special proud Thank another, heartfelt a our you, of our past Leisure our for for XX-year be in amazing Robin. history, most + work, Travel thank thankful start to caring These their which more recognized the kindness challenging by their magazine. and been for customers. a give few recently one and crew them you also cannot I’ll to

the second year row, world. one the the JetBlue For domestic in a number in XXXX rated was airline

day. our During exceptional members every the service deliver to this unique and that time, this crew hard speaks work award

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also and term us It think set the XXXX, and World support our West of envision we forward the and up term, Longer flights in announced markets otherwise strongest flying. LAX, will constrained to one day. margins, consolidation future performance, Los due Airports. to gate of profitable LAX to reduce longer improve us the an This are help On we moving XX the both internationally. our airport Coast, Angeles expand to look and network. more operation closure growing the taking in with domestically Long to per with will We Beach, costs of the we

of new as a our Airlines. adding routes creates faster JetBlue By both new strengths We’ve XXX access on routes global network, American path with JetBlue to will for built combines announced to we recently frequencies. American Northeast destinations, the for positions airlines, our strategic player, customers customers. to XX partnership partnership and believe a a non-stop This have relationship that customers our recovery. and more and includes to more Moving

airspace. Boston, Our more overcoming Boston the to of airlines, allow current bring able York, strengthen constrained effectively to and will low our case In limitations York larger to slot fares also New networks focus more will in markets us we significantly with compete to New grow combined partnership cities. the In our the quicker. be this will

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during sequentially April, tracked demand quarter, recovery environment. and to our second improved and XX% May to volumes volumes Turning L-shaped in have traffic since revenue XX% the bottom Bookings increased now current and forecast. during eight, and demand down June, slide revenue to our the down from year-over-year, broadly

The June COVID demand. in Although, quarantine we pressured recovery. saw surprisingly, tri-state late resurgence not some demand and has the

We to for continue recovery business, expect rates customer’s demand change be and evolves not to travel be perfectly willingness as regions will over infection will reopen time. and volatile, as linear as

the expect to saw Latin of the VFR Dominican support have through up better given volatility. Northeast tri-state the demand. quarantine, capacity we the we the they by experience the especially terms Republic, strong our traffic strong held throughout VFR, we response Both in quarter, strong demand relatively between case up and during of profit second Due quarter, the remained demand been traditionally travel. and transcon these JetBlue increasing the stabilize, in counts will regions continue leisure In Florida South south, have we for of markets. tactically back geography, strengthening recovery, the to saw a supported in regions to relative near-term and Rico drivers of pent our we half back Puerto quarter, of where added for demands. When these much and and the

the situation to service foreign their by the We coming in to online international portion in have to flying. evolve continues to later are month resumed July, summer the of more demand destinations reopen as of governments XX Latin The the borders strength. driven always, starting region as during with

stations by confidence XX% capacity. to place will making of are We decision our and customers, in put demand, than JetBlue, in Day, to that great extended of choppiness and our expect than is as job this this our capacity to choose a to important carriers. us have summer. approach capacity bring policy forward region take assumptions, to quarter pressure more to our we less demand, a long-term subject continue the returned downward the and our revenue And of international instill cabin. affairs online, policy in margins. this reaching decline continue on base. region the revenue, creating policy third the distance conservative done as are recently on of place fares we to middle tell the small because to is managing given bookings a deliberately to back Based team as estimating XX% effort and protect government concerted more through some industry customers restrictions, Our revenue currently has investments end blocking at Labor planning remain we important our we source planning seat to this be year-over-year, continuing faster flights Latin they the believe committed we cost and a in relatively efforts in our lids in for than to maintain is approximately current superior and our of markets many headwind them a travel putting right even present, XX% that among physical customers We The

our We rebuild burn evaluate with needs continue our of our seat reduce our customers efforts the balancing to cash margins. to and policy,

into to slide place the carriers and Moving safeguard costs of closing we’re since have schedule our managed pandemic to reductions, financial to capacity burns. a been We’ve also cash capacity putting we of security aggressive the for among the avoid X. on make start process to most cancellations the mitigate JetBlue,

capacity following cash of capacity during adjusted to forward XX% year-over-year second schedule was we demand. our actions, result improving. when June, cuts March, and we demand after In generate our a deep in making back As flying added our quarter May declined our

adjust stalling, I’ve to capacity. of we trends we the schedules. And demand reflect demand signs from recently reducing XX XX As to continue pulled back shifted environment. we’ll to our we demand to trends monitor August points saw Overall, will capacity current and

flown. is we to our quarter, XX% and is assumption and trends capacity month rationalizing before the year-over-year, our in least schedule will to generation, continue each react third guiding changes For for is planning criteria at demand to current pulling capacity decline, is needed cash

outstanding will our started cash. Well, to in to strategically maintenance fuel to done have minimize back Our temporary aircraft storage; job remain flexible supporting teams an costs. bring managing we we goals generate our and some have from fleet

cash over economics cash to a maintaining firm our towards capacity continuing have manage a to safe We to customers generation. process grip you breakeven and our on serve Steve, again to members operation. for a solid and you. Thank crew

Steve Priest

quarter. like year-over-year in loss good my our lives, our was and for expenses start XX, I’ll they’ve to and overview I financial tirelessly on down about our XXX values last expenses that, a challenges on And everyone. from thanks JetBlue. year-over-year the slide continued share to results diluted with adjusted care to morning, diluted would crew add GAAP personal financial work of XX% presented million per protect wages share Even XX% to Joanna. members. $X.X. of were the was the benefits their operating you, operating with live excluding and sustainability Revenue Thank $X.XX year-over-year. XX% was the down salaries benefits, brief

Our the non-GAAP effective tax XX% a rate for on basis. was quarter

preserving fluid through focus We manage continue a with to on this environment near-term liquidity.

JetBlue positioning as pandemic. emerge as we the thrive importantly Just to are from we

JetBlue on long-term framework step success Robin three following to a back a introduced. that path We’re putting

building First, third, our margins. are paying reducing balance our cash we’re burn, second, And our sheet. we

an industry that its our collateral. LaGuardia we additional least as XX, raise term slide time Washington by slots, as has an the This raises as, brands. exceptional airline well JFK, team the executing month new backed JetBlue a million brand $XXX Last used job, to under liquidity. Reagan loan has as exceeded and with in and first is million goal to at of $XXX done just capital treasury Moving that raised

$XXX that nearly entered leaseback and during also million the transaction into quarter. sale a raised We

including or to Our of total executed the sell total amount an raised roughly and crisis cash liquidity, further these April June at $X.X additional to In revenue. we July, our close XX% of bringing will $X of restricted the since liquidity, have billion unrestricted add that XXXX our $XXX the million backs billion.

are now CARES back closely also advisors We the for executed government PJT has focus been its U.S. on and working in our XXX shifting March. the that loan team the term application The loan. to with our Act refinancing we

the assess for As will forthcoming a over we loan. needs reminder, are billion, $X.XX the to up weeks, eligible we to access our

As since We’ve revenue earned single in the of terms. trends million $X also during end capacity, cash progress month April mainly cash at Small in cash improvements burn burn. came every to quarter early our our the to quarter to manage manage reduce improved contributed the payment base and June. during proven efforts from our

base the into Looking estimate work respond and reduce our $X to we and mainly cost our $X continuation cash third a in demand. daily of capacity burn changes between continue actions driven our million, quarter, by to the to to

fall While we the environment quarter. will revenue the range within during depend the on third

to the the further uncertainty, of in daily revenue burn, quarter, our environment. a reduce in Our fourth cash but expectation mindful continued the is

while XX, focused we’re the slide on to Turning cash reducing near-term, and burn. our

down also the We’re margins. laying our rebuild to foundation

one so of to levers in much the are from most important resize add midst crisis. cost assumptions, is can JetBlue to effort we a of control, that the demand stronger We wide the company

aggressive better shifted size benefit concerted financial base, rapid is effort costs the at This This in term, who to of our figure operation, impressive the to cost CARES excludes even XX% JetBlue. achievement restructuring have we teams quickly of been the payroll P&L of second the actions focus fixed a short changes our our succeeded operating declined the Act. our taking the demand. from to result is reducing During year-over-year. the our variable our viability protect relentless a quarter, to in In of by respond capacity making organization by and reducing our expenses

support spend continue partners more and on with to make We external business efficient. to focus our centers our

manage that have long announce term entered we largest SelectOne maintenance agreement to of spend. through a items pleased of into us the engines, helping are for We external one our

This most our well added for ramp to also when us added from through flexibility dial serve work to returns. will and of down give a in staffing groups demand up frontline will flexibility quickly have time-off We the us capacity programs. ability need

to stepped future We’re of all protect members thankful truly financial who of up to crew JetBlue. the have our

see Given our voluntary We’ve the headcount programs. off fluid volunteer as members managing increase time XX% we offer already opt-out we program in uncertainty programs. sign continue we of voluntary had additional through or package, up to numbers are these of needs recovery, around to crew and this for environment expect

members, to at it furloughing this possible. all period goal through has been without Our if crew make

support way, With the the gets through and have protecting to we us jobs. CARES many we voluntary that Act path in a our payroll September believe programs

Our as about voluntary team. highly a crewmembers speaks willingness to resilience and actions take very culture the

For network expenses during quarter, XX% expect respond of execution saw we nearly will upon trends are will with cost actions, the line restructuring cost our third our Based to ads our confident program, decline help the believe we margins. the we with year-over-year, that our in that our the us cost recent efforts capacity in by rebuild that we to coupled operating goals. total demand again We second restructure quarter. succeed reaching

XXX to XX. Moving one delivery July, fleet AXXXneo, to took our we In of aircraft. taking slide early

bringing aircraft aircraft early. have back ability the to currently and economics of are the our network, into retiring We some managing start

evaluate our we and of margins. rebuild continue move network our recovery, support plans shape execute the to burn to our cash through our will reduce to goals size As to fleet we and

the that view sale total aircraft expect efficient $XXX we fleet. fuel more of year through our into investment the million, leasebacks. newer the expect to economics to XXXX range for to to We and our finance be our margins, CapEx deliveries $XXX remaining in given adding million as We future CapEx an of rebuild and this

tied navigate our order mindful continue are will forecasts, revisit book and commitments our We current we as to to financial of we crisis. CapEx the the

financing to is Moving cap our to slide debt transactions. recent XX. our which At June, ratio reflects of the XX%, end

principal approximately we reaching interest XXXX payments exhibited, proudly the towards per to We remain working and of long Given again cash, million similar end we quarter. investment anticipate $XXX metrics, ago. our those of committed too to grade current level, that debt through not

couple we making investments for creative the next create approach future capital that JetBlue. our goal balancing optimistic balance of expect Over about of stakeholders. the our We to sheet, structure repairing of while years our value our by remain

us well for we future past low for industry model thank success. crises, certainly we the that in few On believe months. well support behalf I airline. in customers can of the our love. stronger We to cost with and in members that tremendous have our an as emerge crew want high-value As crew operate JetBlue as our our leisure of their We best partners and all brands the geography members leadership as truly the again business during team, past communities all of positions

your take now will We questions.

David Fintzen

the with ready analysts. the session instructions. we’re for Nora, question-and-answer go the ahead everyone. with Thanks, Please

Operator

Thank question from Instructions] the first you. Jamie comes [Operator Our line JPMorgan. Baker of of

Your line open. is

Jamie Baker

to good team. Hey, the morning

announcement? at announced to about So Should beginning be tweaks of management’s proceed appears was Or or smallish primary to deal. the that pilot American It partnership, announce deal temporary viewed appear needed permanent American other month. do in able the some perspective from in the the that deal question to pilot but relationship there cost really do being the relates order my as the efficiencies? is impetus even was first reductions be with you something the we or thinking best any the to

Joanna Geraghty

take this is question. I’ll Joanna. Hi, that Jamie,

over the of And relief. that achieved hour The reduced. new been months, required to pilots. provides the just we of we’ve been hire partners something past like of that pilots happening. our business that’s contract relief, a number scope work particularly given pilots challenges this scope The done so environment, grow clause level and with in is a us great schedule to also not level JetBlue, obviously, several I’d far that’s First, as the and certain requirements say facing. their have minimum the pilot And have

end a no of level the of commitment to and there’s then through level also, there in scope a of April. furlough So relief

So crisis. groups, with absolutely over we’re making as pleased been through to and JetBlue the work with other past this really our the along they, navigate successful months, partnership have we committed

Jamie Baker

relevant? But do be you most consider the the to component scope

Joanna Geraghty

I together, pilots. think our and all work they important both to all to and JetBlue were

Jamie Baker

there liquidity Okay. down is for The brand sources draw just Steve, you update in are the regard pledged unencumbered should with loan, aircraft, Where then, you already, we an run other Thank of what helpful. the intellectual property? remaining, was envision And would you. incremental could pledging you that it? but be

Steve Priest

Good morning, the I crisis and the for a, the thank point, happier starting the question. a into probably we came say that be you fact as with Jamie, couldn’t second I of with, and this sheet to over urgency gone balance focus the has of few last and strongest that in team levels industry; secondly, months. through incredible the then execution sort and the have

under debt-to-cap assets pretty at which billion of strong sort continue $X.X the started balance program as prepared sheet, the us additional that excludes candidly sort loyalty be, the to is, we of remarks, north focus JetBlue. refi one, areas and and in subsidiaries for excludes our The mentioned, and we key we some be view XXX focus in is of additional that got we’ve the facility With us describe to sitting XX%, would a at set. is contract sources we one, regards crisis. is only in relate that you to March. of activity total available out took will And sale-leaseback unencumbered to I as also a liquidity I our moment. on when our the of have terms of of this billion focus, liquidity that the have, that And will $X one, competitive raised continued we’ve fact, of then of since we within In the which

to the CARES with we And focus Act balance close thirdly, the use continue depending loan debt how the raises any a navigate on store. will we for the additional government sheet facility. working we’re then Secondly,

that continue propose to how associated going few use capital return thinking up about make navigate just also that about are we’ll that the we’ll that’s so we our to as on sure program We the think we next end in forward, investment liquidity the passing parallel with the in I’m markets, And loyalty with that. months. best

Jamie Baker

- Any loyalty program third-party of appraisal recent program? the the

Steve Priest

that’s We through that gone we the we facility recent through have our government, as through that sort work forward. of been and and go that to part we’ve continue appraisal, of been work going

Jamie Baker

very you Thank much.

Steve Priest

Thank Jamie. you,

Operator

Your is Duane next of Evercore Pfennigwerth question ISI. from

is open. line Your

Duane Pfennigwerth

good Thanks for Hey, morning. time. the

of by percentage sequentially sequentially, less of improvement, assumptions terms down XX XX looks XQ. it the cash XQ higher about by less points your burn your for planning high Just points, and about CapEx in percentage slightly sequential level, call versus like down drivers revenue OpEx

So JetBlue, I’ve most not burn What a driver it’s unique airlines. one is improvement? cash question asked the the sequential of of to

Steve Priest

you, Duane. It’s Steve I’ll And good And morning. here. Thank that up. pick

the So as I just on would we reminder And with left done sequentially at X.X%. first, $XX burn work a we ended day. say, everyone, June month-on-month, to we’ve a March cash million of I think a

humming of fixed biggest So we very our The some costs, absolutely June. brutally finance made this costs, really I thing, is obviously, And environment, cash team team positive. and focused planning focus our COVID saw tremendous obviously deep recovery going our on and Duane, sure in the of coordination we terms the in progress variable are between revenue exceptional. would that that we’ve on all making in the very, has on flying been

forward And as that’s so as I driver core at that, look COVID of this the continued the environment, in of mentioned. sort focus you going really

saw focused so positive seeing a environment. of move on - of team looking capacity variable and And June from X%, And to growth, of to QX sequential we we what versus reflection a in sort we of making that. tactical process, reaffirmed through QX slight result capacity mentioned, QX Joanna, strategic are because at we’re And the are revenue X.X% in cost flying. came as sequential on some range from obviously, our you I result the say that into about X% sort structure. of the schedule cash terms incredibly sequential that align as candidly as at sure it’s the as our thinking some a of increase In I Scott growth and the obviously, to of of

in August our will reduction in recent XX% to XX% the so schedule reduction show And that. our

on relatively we of wouldn’t financing material. doing side, basis, work cost our at combination lot I CapEx a I leasebacks. it’s flat. little a on a the It’s terms it’s of been and of look but In have choppy, quarter-to-quarter When sale suggest and of CapEx

we of it’s costs of into we function revenue coming the as navigate will why the big off And X% reflection of, revenue we’ve and Duane, so really sort the back be this the that’s quarter. really through. we operating and QX providing of And see environment ranged a X%. our the sort through between that marginal, June environment of, driver, as navigate That a it, and

Duane Pfennigwerth

you Okay. needs And on you And a maybe the XQ what Thanks for that. is then XXXX, cost to too. JetBlue term maybe this demand, its Jamie’s question, do what think? do baseline baseline structure and into intermediate from align follow-up

over better question. hope much things that time? As it do to the XXXX, think your thoughts. we you look of for a the into airline appreciate this difficulty how or to get certainly simply Thanks relative XXXX needs be And is smaller

Robin Hayes

an It’s that three through It’s go of question, sort mind of, through sort questions go one as Ryan. probably teams leadership that. top my of the, and mind excellent the we

about the at said, be sort as be And capacity a we’ll least little We’ve Let give flavor XX%. what nimble assumption reduction think a about very our our I me of assumption bit quick QX, of that. of which mentioned you a and is. planning to just will of

around standpoint, from in of two-third where operating a the QX, expecting about We’re planning schedule. position thinking we’re

will about And give we leave of this sort impact forward, forward. we, and about of, back a how have you think So will all correctly. sure that of, its in and environment. how step obviously, revenue go year the and of on, size it’s When structure our go I terms sense sort making we that sort cost

be As about as to expect when we’ve structure structure smaller I the we cost exit And cash. our COVID. cost we and around relevant think more said, carrier a is

were a, in you to basis, of D&A prior fixed. including about currently COVID crisis equation, cash we’re of, XX% sort XX% was a the variable, of on if costs, our take So and fuel as the

come versus As smaller of our XX% out costs around business, that XX% cash available we fares a is pre-COVID. of

our philosophy sort here how back do go the whole hammer variability. cost to we we is as XX% structure our of forward So

things. in really cost So cost with fixed our work three footprint, things the capacity architecture. One, IT manage structure we’ve about line things ultimately on been structure, about can very our revenue. And that and clearly we the like eliminating that’s like doing the our thinking thinking about and infrastructure our

VXXXX costs contracts. members is in from example made and down obviously, indirect variability costs. thirdly, And provision. business just variable. of unit is variable structure, gone We’ve important, we’ve into things secondly, recently, Secondly, of more done. cost smaller incredibly which also our transition of a down deal distribution our that driving our partner our those including outsourced our the brought really and our where we’re good some more and contracts to fixed And agreements, difficult the hammering this cost more crew about distribution Think the decisions airports sort deep then of to maintenance very, And distribution. or driving direct transitioning like on very

the at costs that going so can getting fixed available going into to think more sure post going a much level, our our continue turning costs I forward. So on that it’s of cost making variable, as and business that possible, to that top fixed we’re to smaller we margins understanding XXXX, driving focus as be out,

Duane Pfennigwerth

Appreciate the thoughts.

Robin Hayes

Thanks. Duane.

Operator

from of Next question O’Brien comes Catherine Sachs. Goldman

Your line is open.

Catherine O’Brien

for everyone. question just CapEx. a the time. morning, Maybe Good Thanks on

have the get aircraft with penalty. of basically you months is your Airbus? companies how late, I And over CapEx have leasing And conditions and XX more an guess, all this an first, PDPs flexibility your after do that you couple aircraft cancel I more… then no your then about can And are shared mind, back some order, much years? have So With next you the in how future contract in one same thinking second, in CapEx? or

Robin Hayes

morning, going I’m you the for and hear heard about half the I I well question first you what’s your didn’t you contract flexibility with how repeat please? particularly Good Catie. Could it, But forward. sorry, Catie. have Airbus much Hi, of your question.

Catherine O’Brien

Sure. Yes.

about now? Sorry me hear Can you that.

Robin Hayes

much better. Yes, it’s

Catherine O’Brien

great. Okay, Yes.

can leasing PDPs noting basically your So I an that cancel, penalty. was shared get late, XX months no aircraft you all just companies back, have more or is so aircraft after some

late just with on I was know I wondering, years this for Airbus? now. running is of couple the case so with And you’ve contract delivery a your been

future couple So like just wondering your CapEx the flexibility CapEx and the looks next years? what in of how about you’re over thinking

Robin Hayes

Great question, Catie.

we’ll I been to of since of say the quarter, about you’re this contractual some they’ve about today the out good expect that and the for in from in our with balance our get challenges partner, and Airbus. to with standpoint. update this the the we we’ve into about and book, as would out would between XX to a remember, you market. bit we’ve of needs, you’ll where, years, navigate that are, getting OEMs new continue the is they’ve say, good as to earnings crisis, financial call I arrangements I billion been we better little terms regards obviously really tune we But improved engage continued the And first is Airbus. further what with us crisis, to of you $X.X few naturally months. rights. as it’s to Again, aircraft we’re think details just MAXs with but Obviously, data sustainability XXX here thing closer I in deferral stuff our markets airlines, conscious in of aircraft sort I ever of some XXXX. we think the CapEx to come partner. a a of the of you as environmental have the you order in and deferral and between announced the drive next side-by-side as discussion, generally market sort commentary the and pertaining The sit go the wouldn’t Particularly with last expect needs, that CapEx right, talking balancing to the are would continue they’re sort in very that’s last and mean, the it’s a any me commercial

Catherine O’Brien

a Duane’s great. follow-up And then question. bit follow-up, Okay, to some a actually of

the be but you driver less noted versus declining is XQ will relatively of quarter-to-quarter, is revenue So less that year-over-year, cost XQ cash negative and burn revenue quarter-to-quarter.

masking better on a sales those talking know net are aircraft the you’re I leaseback. off? top refunds falling there So Is with financing? about with something line going productions improvement

mix improvement better that there? Just costs change trying the to of given in sequential and the understand revenue

Robin Hayes

say, would I our thing first the Catie, helps think size I us.

very be position JetBlue is that nimble. so And in a able we’re to

everybody think June, navigated competitive geography call, the as is of about of we aware where in are. JetBlue’s and earnings we terms we from what think I saw

of our sort out choppy. our geography. with continue June pleased that about thinking came to burn particularly was I does So we, be cash of, with, It

we off the from from why some balance side variable and the is, about think you’ve moving think getting we except CARES we think cost are go X% cost of with we nothing a right, capacity our we’ve it’s to the obviously, Act look into our that’s it’s things a look QX, are as you rolls at and really as structure in where really because QX ranged the we – material where don’t and demand I standpoint, where forward. QX, X% at I structure. but we around got and sort to capacity on QX, as of came that’s reflection there’s

the of the we and revenue reflection a the So that of capacity cash is product we really the that start business. into burn fly bringing

Catherine O’Brien

Thank you.

Robin Hayes

a Have good Catie. you, day. Thank

Operator

comes of Your from Genovesi next Vertical. question Darryl

line Your is open.

Darryl Genovesi

performance. and Hi, you’re quarter, just billion to for is XX% I Duane strong a million per $X.XX X.X guys. which mean, OpEx asked. $XXX This a is a decline follow-up ASMs. just on your about ASM talking in or about XX% Thanks incredibly decline, capacity reduction, planning of you’re I time. for the wanted with which the Catie cost is third on reduction On that reduction.

I going higher especially in with expense demonstrating a crisis, hurdle variable makes than probably also the is capacity But much what furloughs you’d sequentially. assume for into high achieve thought put this You’re back very QX. more cost would a have and structure I rent no to in

that X.X% your your how imagine I’m if understand, can are total of me wrong, as to RASMs marginal that. marginal trying positive And I’m even flight I’d in cash suggest but QX so implying you’re lower And kind than the you be because correct range. flow RASM

down, sorry for the why talking versus long a that’s if lot then you that for the isn’t every save if Thanks you’re capacity ASM down more XX% So question. that case, $X.XX about? pull and the and you

Robin Hayes

I’ll thoughts any if they this very, an environment. got Darryl. very Joanna additional and am work pleased the kick I’ll with OpEx revenue standpoint. it worries, give I on No, done we’ve one-off, from and Scott, to the

members crew Our up. really have stepped

amount partner three. tremendous our quarter, time voluntary been despite so the not on during CARES to to into things We’ve Act available to push only that got of And quarter And spend the forward continues basis. continue really and business rationalize a in that off environment. go us, we’ve and able gives we’re

we’ll that comments So that VTO Duane, company variable continued has as in really my But to thinking this your think to in shift. home. is some I I said I hammer essence, We’ve the standpoint fixed markets are to – is hold very coming the Again, got some feel through. to fixed. of like that of labor of see very, continue

to to a In standpoint? from depth revenue just any to terms I’ll color to if of standpoint, over she Joanna our through add the go that cost revenue wants see hand with we regards

Joanna Geraghty

Yes, sure. Thanks.

is few demand quickly We adjust has I unbelievably our disruptive, planning to really capacity but in. environment. economics enabling months become our process in a say decisions just is somewhat focused line demand. that I up supportive on for ensuring obviously, closer environment. been very Steve’s would cash And we’re members, breakeven us our on picking the being been It’s out. changing crew to This lock capacity we with our about think given And is current understand what to flights. much point they’ve nimble,

numbers. you’re are think what that’s positive. factoring seeing the I what’s not cash We in flights will into not that And of terms operate

Darryl Genovesi

time of yes, guess, RASM $X.XXX versus And I just that deploy actually guess a is - times. you you mean, revenue that you has mean, marginal I if said is what probably like and on stories the But I just tell I this is play that clearly I guys during Well, CASM believe about. mean, flight? today a heard it to that have I’ve that’s $X.XX good than ASM case the hard that’s a in each that of Or below the marginal capacity you’re you’re adding markets or is frequency case? bit. is math additional good you not higher is a sort I first capacity back little average that incremental each last market dilutive? push be $X.XXX, is which just RASM the that entering I to mean, year. likely per your the were it talking rather total and

Scott Laurence

sort we’re is Yes, take level of XX%. between planning and going we Darryl, a with load piece breakeven this. piece, because and about where the XX% this one and how variable how you’re it make again, decisions know versus it’s Look, Scott. it variable I the I’ll here factor about cost, up governing I there talk as think give a Joanna Steve - think these first the it I try and incremental about think when

the of other is a frequencies. market to in portion potential recapture with that The multiple

to plan actually of the what what talked safes at count, closer of got a we look we has then And we can sort as appropriate couple in as about, we’ve So this process is network, Joanna the move what’s it. fly? got frequency fill in

cancel frequencies necessary. of and sense. obviously part days in out. allows this a sort out the making of to of to a plan markets a that the of combine, weeks the we and take the tricky were us in it So we is and we flying make and schedule, combine couple it frequencies then scrub incremental of that then That’s and of sure a move if scrub couple take try And --

drive the our of across better of a the got cash of relatively And result we network, frequency But day. one that’s sort Now the us lot if of course, to places, end at that, with associated low the bottom day. at a goal. in you allows flight that a we’re line look

Darryl Genovesi

time. Okay. Appreciate the Thanks guys. very much

Operator

from comes Becker question Cowen. Next of Helane

open. Your line is

Helane Becker

operator. much very you Thank

beach have all Long I moving about much. the information. question Thank very So just I from appreciate a you to LAX.

flights that driver you I about. and which Beach you the isn’t or fact international allow opportunities allowing talked think So that LAX was I guess the didn’t international there have Long

could So like LAX very Or Is I you in the about little because or - that was a better of to interested you could wondering that bit better margins that? talk about seems LAX just the Thank kind the I to Beach margins. just I’m you. relative had fact a if talk network? market, maybe relative Long guess competitive whole

Joanna Geraghty

Angeles. Long I’ll few take is This we reasons Los one. into There’s why Helane. that in consolidated Joanne. Hi, July a Beach

operation look savings Long the This into two consolidate and to when and didn’t of with us part think, move facility, single it our were through you’re I term. years our when Beach has international lenses, flights And capacity a a airport thereby correct, was short-term, not approve council the at cost disappointed creates at station. ago plan, Long a in short we our to enabled efficiencies customs the Beach yes, city Beach. permitting relocating and Beach longer-term – Long forward Long that for I

was those the one behind consolidating of absolutely reasons So operations. that

JetBlue. In terms of great opportunity L.A., this for is a really

has margin. flying a Transcon Our Los wide by extremely quite outperforms Beach performed Long Angeles well.

we As Los opportunity international, think we in that Angeles. have about

take Angeles. that us advantage capacity And from Los really You the peers international our we’re to. something looking in And forward should of obviously, move, flying. think Coast term, to that’s allows West longer reduced for it

moving of continue well compete forward. against expect and legacy airport, Angeles, to do currently So we yes, extremely the out it’s a competitive but Los carriers we to so

Helane Becker

to, not It’s is couldn’t you – necessarily hook so Northeast, Alaska code would you able then Coast, guess the I the West them going right? on be or the to in here the with just through And American? up include air?

Joanna Geraghty

flights West, a would LA that will flight, the touch covered. flight so New won’t be – include into Boston include area, It York L.A. a JFK, it

Helane Becker

you. my any decision been follow-up, has there AXXXs, on just Got movement for there? the And then any

Steve Priest

Steve it’s Helane, here. morning. Hi, Good

Helane Becker

Steve. Hi,

Steve Priest

And potential some work and book get a mean, the goes this few to analysis, to thought can to once give us of this we’ll then next continued the on to go give we’ll thought through – airline. it We sort decisions fleet. that back over smaller order This sort through the that of we and months. going forward. enable give continue some going of retirements through expecting Catie’s I we are about we’re we any we And make to through. that that. question come specific Obviously, as does crisis

Helane Becker

Thank you.

Operator

Next Brandon question Oglenski at from comes Barclays.

Your line is open.

Brandon Oglenski

Good I asked be expect we Steve, to for JetBlue question. chain morning, investors hate come back guess, should this thanks sort But everyone. that of to And taking things And that outcomes airline other the teams, cure should are is of management earnings normal?’ outcome get I’ve Hey. questions. virus? managing get my down to I any to cutting where once to so that get Or it is some today? to we recovery that JetBlue right to to margin costs making with But ‘back longer-term even manage for much you is revenue plans before too.

Steve Priest

morning. Good Hi, Brandon.

this Cash, you would Our environment. as number expect cash, in focus cash, to is cash, cash, it cash. be

if a in flying term fixed to the pivoting co-automation which the we’re longer of terms earlier, cash in cash to about earlier short and Act the smaller this you work because the we’re CARES term, margins environment, to made to positive. fixed, order a the with only is the preserve we can resetting you outlined you structure in not you managing that. airline, are cost out of level smaller as cost cost cost the Scott then is we as as have do short But capacity, point structure cost the of have a the imagine, so And doing, as longer really for structure. and term our migrating the higher in think our restructure structure the variable And in being about but come the term. It’s

we one seen earlier, So you’ve are very or come JetBlue view with cash; make I’ve the don’t out in the other There’s in term; sequential but short-term the of as to this alignment the for And the with up side as the I burn also that long-term. complete team ourselves said of what at is do like we setting other. pleased the leadership a, as cash and crisis strategically. short a sort conserve improvement sure to I’ve been success our that’s very,

good with prepared ultimately alluded sheet, We’re repair to his the margins then in comments. a Robin as to balance place our in

the short-term, on other, So, the cash. but it’s I suppose, not focused one in absolutely we’re or

Brandon Oglenski

to I share Joanna, smaller response. see where to definitely how have with talk Yes. of and about maybe, appreciate network the flexibility assets, today? can size your of you to maybe us you What you do JetBlue? a are the smart And that just get you some unencumbered the you willing

Joanna Geraghty

Yes. will remains is I think around say of I the mean, a there I what uncertainty timing recovery. lot of

so, planning entirely change. of assumptions. earnings about now, year. talked XXXX, for to slow, assumes yet That a confidence steady And to customer call our an needs said, for toward L-shaped as revenue wide on the and Right planning flying building the look to remaining ramp-up the we last of range That recovery. nimble capacity is we’re rest again, you a of focus if

crew positioned the trusted we’re variable, around product, superior costs it recovery happen, mentioned, resource so out fixed much our spending. that lower getting when feel to brand, of business, capital a As plans for does shifting We members, well Steve structure. our reducing cost

all this and the preservation change, of flip we’re back looking Steve planning which get is moment. But XX% a planning we to down environment, I’ll QX, for into XX%. expect is we’re be are how going scenarios. So, are. cash for are at mean, XX%. focused QX, currently it’s on could we we much and smaller say, things volatile revenue incredibly and to to at - not smaller I we I’m to by what variety why an

Brandon Oglenski

you. Thank

Operator

Savi Our James. next question of Syth Raymond comes from

open. is line Your

Savi Syth

Hey. Good morning, everyone.

for the side, but wondering very a be I realistic on might CapEx Just XXXX. are I fluid, things range what was realize

Steve Priest

morning. Good gone, you we’ve billion. talked we -- said can here. Steve - about several imagine haven’t Savi. Hi, We’ve but yes, mean I as

we’ve effective been Now, of, of CapEx how the a there’s sort And you useful a in also the think I sort but you to share probably basis. it’s got to, about cash we’ve obviously with as think cash about headline number, just short-term. think

about CapEx cash to only that So, $XXX we’ve standpoint in of with QX. headline sort QX and the obviously this about. activities from business seeing the we’ve leave when million the number you’re the book, leasebacks about the year, because of $XXX certain think million about But thinking success had talked a order I there’s

our going are be to we looks profile we like pivot attention we turning but So to $X it’s when to basically macro we and and as our think XXXX, months at navigate a level, the bring. see the we obviously what about CapEx our billion, next CapEx, few recovery

Savi Syth

provide then have also wonder related the sense. I of particularly detail, off makes like long to that portion if to flexibility on goes little the what that of And That off, and the opt voluntary time bit could how programs. with? versus you outs a work just is the time more kind you XX% through,

Robin Hayes

mirrors try resourcing the in uncertainty we I Hey do of I’ll philosophy into details. terms to is take before think morning. and see And that get really Savi, a it’s that of I What align Robin. good just comment the we philosophy future. sort that a on of some

move year. seven last sold mean, they example, last keep we days the as take also for two to choppy. seven our the need the changes quickly did in the that always three just better to It some where weeks a to of as flickers in did And, that. so think cost business need is. the they and demand word an or when same down capture isn’t vacations many see we as I vacations course it in there, We are and days I using it there they we when over did can environment as has

in to of sort we so shifted had environment. it flexible has timing was have and we would so August expected in the remain Now, left this extremely than

way the know look it, of number business approached So, here we a the we going we’re take we we that said be can there’s permanently. smaller, know roles of we to that out

so, of opt And had we a long-term number outs.

between significant credit that We week one that take we other programs most for the in month we time-off up XX in in-flight, programs long-term and time have the groups And months. like groups, that of also month nine option. workers and varied between a amount -- work one off nine go created

team, months interest, do resulting and we out, as people the And we then programs. you roll amount is of so planning to kind the And or really team, we’ve fill sight the line then in, sort what of of the if get term out what team, that. the have schedule and have we more gap short-term three the calling had operation programs we tried to of closer on kind monitoring and for, up like out schedule opt longer of the in we’ve between two

of you shared a the combination is out some that excludes time-off with haven’t we of last of programs that long-term of today that time-off with the gone we’ve and work So, got a XX% out with we quarter what It in shorter the programs number year. yet also opt for short-term them. program

So, the put that we or either the number members in XX% actually will off, some time long-term. call form in the crew summer, gave on last our had go take short-term of programs when higher out of and was we a I quote

a sharing numbers, constantly it’s flux. in not we’re So, because specific

out on medium, we that be We have had future. that going with into short-term but additional the medium and long-term, excludes is time, all programs will and the time bottom-line programs and programs we’ve XX% already out program, going opt out out

Savi Syth

Appreciate the Thank you. details.

Operator

Joseph DeNardi Stifel. Next question of from comes

line Your is open.

Joseph DeNardi

from normal Barclays Or the Steve getting of that morning. is a all the purchase that kind Thanks. cash $XXX combination Good purchase is Barclays? cash is point from of you’re the million plus an advanced transactions?

Steve Priest

Good Hi. just That transaction. was the Joe. advanced morning,

one-off have that executed transaction sort -- steady liquidity back the state we that. obviously, a April. was So, goes of they were sort loyalty activity the with of in That on loyalty

Joseph DeNardi

only was $XXX That’s one. first There in the that’s And second million quarter. the Okay. transaction.

Steve Priest

$XXX it’s we the only million. executed ones, and back No, for it in April

Joseph DeNardi

industry this period, there in capital-intensive one Robin, the a they there environment has assume that investors in been prior structurally an it. a relatively Got of with for why be shouldn’t lower as consolidation one revenue is multiyear environment an are, side cycles? is on as other low where and period as is the margins airlines of where will

Robin Hayes

U.S. goes I more liquidity ever say certainly back, difference in But of with we’ve into this strong should every the the came I or or my obviously, event would a whilst sheet this clearly quite is assume. time than is, what is tell way and question this that I great of balance industry, investors that seen, this memory airline a what can’t A position. think shouldn’t severity

of think, the this, of recovery do to of was And leisure into we about to VFR a and I just that likely think likely we while, only in moving went more of strong in were and as significant out that as the and stay we really amount quick this, markets, that suppressed we sort in. ability, in case stay suppressed was We the counts And XXXX. think, recover I’m the think I the of saw what our routes think up, still by for weather once is significant. we so, VFR am quarantine June, I that for came markets. so we most most it will And leisure and line suppressed still is again a of to that is optimistic once I confident do come when announced, I business the acknowledging, some which is I do. that markets

think may under after exist people is with quickly. some vaccine of control, a comfort back or to think And once that even while, sort immunity a get once better counts so, places get I therapeutics either case I herd that in or more come demand going

partner we reducing next excited strong I’m this of exit I of us larger Airlines this, with in well, on continue our improving think from some think bring of ways, is grow very more ability to recover be to we’ll this our those it’s think way the we to JetBlue the we But the our sheet, the partnership balance does low because And American what we on so, us pretty ability and years especially American do I gives a benefits about focused for what that, cost side. I to lack but organically. leisure us the two I think should do know a fares be to I in sometimes three or But build industry And our for scale What with and also network. focusing competition structure, delevering. innovative that markets. think really over as to many

Joseph DeNardi

Thank you.

Operator

Myles from Walton comes of question Next UBS.

open. is line Your

Myles Walton

different and ample doesn’t than this - we’re situation prior liquidity natural Thanks, take to war why not place that a Maybe the restructuring assume should question, are more of first the want just investors I airlines the where And in side airlines than other take getting could are prolonged good downturns? assume one, a be Joe’s M&A that liquidity enough morning. and getting situation?

Steve Priest

I’ll that of up. sort Myles, pick So

cash storm, uncertainty the this we’ve sort a the sort of anyone I don’t standpoint, around raising just as from of proverbially liquidity are weather I to you the think at we wheel. think seen; right? being want

And some around and so got out we’ve all significant we’ve to and balance gone done out - storm. sure cash the weather the JetBlue has this gone making sheet work

Robin’s terms It’s we to ourselves possible M&A from to side perspective. to perspective back of to the back of so were really sort do get with to position as pre-COVID. get about as it’s we So, other cash paying the just just start quick of and nothing the to that this. we’ve got the feasible be will And making sure in storm the weather

as cash airlines I position sector. in don’t balance see and the US the the viability this So the anything protecting in airlines beyond of sheets

Myles Walton

should per the how Okay. of on top the formulaic line the follow-up million more million to $X is cost, $X to incremental the million that $X below from much and million kind to the breakeven, conversation around or we think the And burn? side as left cost about getting of then the revenue on and accretion delta day, $X from to

Steve Priest

good question. a It’s

or look imagine, reduction. we’ve what the to our But have don’t a be the our again, And at two. So of good end whether Myles, of the on think for look We’ve the on crystal range cost to of a environment structure. will around work QX. us question of about ball I revenue perspective a X at towards X that range of like obviously, environment a where capacity is. sort to determine said It’s and given prevailing a least basis, structure a the cash variable load to I can the And going combination bottom at is X the on on But as done cost focused, we’ve the breakeven range. been we’ve to XX% revenue you based sort at incredibly it X good range gives this top the that point. factors prevailing

Myles Walton

right. you. All Thank

Steve Priest

Thanks, Myles.

Operator

Next question of comes from Bank. Linenberg Deutsche Mike

Your line is open.

Mike Linenberg

include a what actually if Joanna, in differing or slot sort talk reports just about Any there it? press if been been know reported transaction Good that’s at connections not you the Hey. also code morning, swap, on you like. Newark. sharing that sure for was color a share the would you and that and the LaGuardia on there everyone. I’m did can American the about space of I there’s entails. agreement, out Kennedy that’s and it’s question that

Joanna Geraghty

question. and to Scott that step ask in I’ll Yes. answer

Mike Linenberg

Hi, Scott.

Scott Laurence

So question. thanks for the

a to we’re continue do. So what work this, we’ve as bit through we going to talked about

That’s where things us, of at we allow is we to be forward, but transcon There’s come how up. and that also some slots service. -- we American long-haul network of LaGuardia There’s airplanes. at first Certainly, competition opportunities. come some think great at there’s we’re feed the I right? like as this going ton removing part and has markets. look look does of only JFK, slots our new for low for at going the because network, obviously, potential about about there’s those talked American’s room brings there’s And also a to to in LaGuardia, it fares, us long-haul this afternoon excited not benefit, look That creates markets. move freed and to arrive to JetBlue for are other at in to they’re

at want -- regulators here, we this this, at to it. of benefits ability we respect the that We I look certainly move again, we’re about talking when now. the at this. and the right respectful to are we’re faster So obviously forward recover ability we look working look think and because I excited to to again, But

Mike Linenberg

And fact the as the two a takes a curious with Great. the or looks deal second acknowledging then your And believe, pilots have where, stand, just you that company, you either of day question like a and PSP. house is as or ago, it this extension year. was an that it where, looks you the proposing I curious into next I I’m already a think it like Joanna Robin. is

competitive take the more you’re it you - So competitors looks of reasons for the protected are company do same, And be as debt warrant the do a there. industry knowing if others up extension like if an dilution. could in strings that attached, right, PSP, and compelled to maybe there

but you a stand sort of, where So, as of, multipronged you. sort a company? question, Thank

Robin Hayes

the Sure. CARES. Yes, take I’ll

So if it, what that’s I technical I’ll call X. of CARES what sure but mean. the I’m not you know term

Mike Linenberg

Yes.

Robin Hayes

save CARES X job. about industry that, about is think it and the I I think way CARES is, the

QX. a we so And planning going into have assumption

some have uncertainty next into of We There’s that. around going as a level planning year, mentioned. Joanna high assumptions

team, having to things people. planning of or one a is to the up our down lot as play And a scale scenarios. we’re hardest of So

without voluntary furloughs. that considering hard more could far. outcomes if will to you And programs point get some and gap the we to as a you pessimistic it’s voluntary assumptions go view and - we so hard so of programs, is get we where where demand bridge take sort only you if on to a make certain push of but And

right confident the now months but what we’re on high of front few can that over based through so there next get we in means, Well, of And the a voluntary uncertainty. level we see there’s different kind some a airlines perhaps business mirror can industry have that the I more mix us, that may see and across at be look who think of forecast. you to and us concerning

industry, recover. the more CASES would as it doubt when X and jobs at protecting significant And that look a there’s changer giving we time be to in so a no game industry

the And an that’s furloughs manage of protect we but ability certainly this can so I I happen it. would significant things, alternative through is I cost. to think a how the CASX or about And too think number but other if industry, that jobs of think JetBlue, as there. if a about have And we think, as

about how terms see as think interest. just We’ll out. think is Certainly, it see X, on CARES plays how X But that’s would if so of offered CARES that I be out. it let’s I similar plays how And it.

see and in going very sit end is where in think this and the negotiation the I with administration, to at we’ll a senate the difficult the be house it. and we of

Mike Linenberg

everyone. Robin. good. Thanks, Thanks, Very

David Fintzen

for That great XXXX quarter our a right. joining concludes Thanks conference day. call. Have us. second All

Operator

will again, conference. conclude your for that participation. Thank you And today’s

JetBlue Airways (JBLU) 28 Jul 202020 Q2 Earnings call transcript