- Earnings call transcript Q3 2022

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Operator

Good morning. My name is Anthony. I would like to welcome everyone to the JetBlue Airways Third Quarter 2022 Earnings Conference Call.

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

Joe Caiado

reference morning, our Good we thanks joining that for our Thanks, quarter everyone, XXXX for we'll presentation a third release morning, this earnings us call. earnings Anthony. and and during call. issued This

obtain satisfy and available of of closing consequences those In or Geraghty, at the to otherwise alliance, SEC. investor.jetblue.com and Barry, with the also our of the the the Ursula our Joanna to York President the discuss of pandemic, those been conditions Dave This expected All that transaction occurrence terminate this be Hurley, and made thereof; Airlines our could a and All JetBlue Northeast in successfully recent or filed made statements failure subject Investors statements financial of Officer; and should forward-looking timely Q&A are timeframes not both Revenue our failure Chief the are factors discussion XX-K right no date Spirit and on the Chief contained events. Travel including, includes with expected us regulatory operations Chief non-GAAP Operating are our joining Financial Robin Officer; Clark, during and have during or to Hayes, others, among filed failure XX-Q any future may Officer; that achieve website as for manner more our potential agreement, that are by documents statements, course discuss JetBlue may Planning; to JetBlue approval possibility to statements. or may materially. President statements several our lawsuit availability could consummate merger those and forward-looking integrate actual the parties and a COVID-XX for financial New and the uncertainties, and or other the related the to in the JetBlue. most DOJ Products. on Please such undertake our cause of Head efficiencies results call and call we Executive rise results morning's differ operating outcome to of Andres the and Form circumstances risks our give Also to release pricing, update from to applicable call, synergies differ refer of to the obligation call, forward-looking of measures. to we at of results actual detailed the or all Spirit's a fuel place earnings certain to The materially unable reliance forward-looking our of recent and these are within about the the undue only the to information. of

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

Robin Hayes

today. us joining for you thank and everyone, morning, Good Joe. Thanks,

and Our all loved including with the thoughts in hurricanes of many affected recent those crew their ones. customers Southeast the are of and members, the by our Caribbean,

provide the World support several events alongside crew like after assist in these them safety to XX,XXX and above ship long up way. always partners step amazed a and priority And am and more care communities I Kitchen, serve, to crew Central for communities impacted each regions. our efforts. other road to for for service. and dedication, know we're top Crisis challenging members a to of with it's going supporting how the Fund, to else. be always, who the As and prioritizing members is every we're with devastating going times supplies crew working than working these, for their to we with such to were step JetBlue JetBlue relief Crewmember all members thank as patience members and is our nonprofit recovery our like hardest I'd hit, at crew stay we our our

a members deliver crew we in macroeconomic revenue, record our our pandemic. another low quarter continue to first more margins and confident our JetBlue the Our of bring the path also I'm building quarterly year, the Despite of the start increasing the fare, we're momentum half resulting profit since that second customers. we helped experience as uncertainty, in of on to are award-winning

the quarterly results to turn of Let's on X Slide our deck. now

over an quarter, of operational For share this adjusted $X.XX. earlier strides to on $XXX of despite performance staffing reported demand. enhance control point believe we we're operational a where turn and productivity. appropriately made we from The at resourcing X.X% peak of the strong to resourced in improved margin pretax summer adjusted the year made million, an record We've excellent resilience our significant third and earnings a changes the per of hiring, which in translate air are should and challenges we schedule customer weather adjusted now income traffic perspective, pretax resulted we and and

to mid-single-digit look quarter. expect to power. our as XXXX to another ahead, our margins pretax continue earnings Looking We'll restore in margins we through fourth solid momentum in build of pre-pandemic continue further to we quarter the

a demand healthy see slowing revenue air We for to environment with no continue of travel. very signs

Slide now Moving X. to

Four earnings trenched and deliver term. on diligently strategic initiatives more are market. the compete network. Our to we fortifying driving starts benefits carriers business significant long the as continue for disrupt our We're teams our It and to recovery our working business with unique model consumer our within enhancing Big the effectively

stakeholders. for for on Alliance, all this more delivering response Again, not additional that substantial and stimulated. than York with value. consumers benefits. and have consumers our capacity growth choice is to will NEA and airlines and the and service benefiting in and growing from combination frequencies it NEA, Boston. for XXX frequent we competition on of and Northeast destinations. X.X over both been which out running the our routes, consumer build routes more promoted our JetBlue up look and By forward expand increased flyer customers. giving which our I'm Outside is And Together, offering low of a scale Big customers about national these award-winning pleased better benefits across doing to schedule fare all shareholder has and would compelling Four without what continuing it has for fundamentally new dominant and value years American more expand Our Spirit measures, of we'll the do, choice, set The challenger in extremely create be the recent competitive consumer dozens of more to New of further the clear, improved launch possible we low combination, to are fares approval benefits NEA, with reciprocal a are the to

and engagement co-branded in tuned modest daily On delivery And next Airbus remains the look Europe, the record the we and see by the taking our we our forward transatlantic of levels, to London. offer end delivery a JetBlue to continue front, flights of aircraft future. credit on for announcement an Stay XXXLR spend with some between support to we'll healthy of notwithstanding cards. week, expansion near at year Northeast X this Customer delays. handful to

on building of record our testament groups to on what to value subsidiary the to do, to seamless. producing to more to track flows, travel Our to experience million in loyalty XXXX. efforts JetBlue million Products go Separately, this $XX app Travel travel, a is and proposition. Travel True, EBIT customer innovate launch help cash where close continues make the year free $XXX compared when group our generate to is JetBlue which decide with planning of to program Product is a to

committed progress in goal supply XX% We shortly towards sustainable investments. quarter, made one also ESG structural continue growing of from agreement gallons on XXXX. jet great Company, progress our by XX converting and our last to on with SAP in We the fuel JetBlue detail. diversifying of of announced will we make Air which further usage XXXX purchase program to more Ventures the discuss SaaS front, an million to aviation we as fuel starting Ursula the cost our We're of progress to

Organization, We endorsing for had voluntarily airlines appalled net for goal the to. already international XXXX Civil by or ICAO, that aviation X U.S. a also International important milestone Aviation committed an emissions,

that, you you, We to Thank about sustainably. patience. expect our enable your to over to thank lies will I'm members. to innovation with hard drive and momentum, continue this the in your needed investments crew continue our all ahead. the to Joanna. building huge work, that We're another strong excited close to of journey for you I'll With technological industry grow

Joanna Geraghty

a our extremely of most we my thanks add in you, like and storms. team challenging communities very Robin. their the support summer from impacted for and/or proud they've our I'd recover also to through dedication I'm hurricanes. the delivering as for to up each Thank other to stepped fantastic recent customers how recent

X% factor. flown to the recent the XXXX, impacted our for Ian our capacity roughly ATC executed In in well, point. completion of guidance capacity third was our Slide X.X quarter a year Fiona by with resulting X.X% teams Hurricanes constraints, Turning the on and significant compared capacity strong of context X. in flat down our over most Throughout quarter, capacity. particularly

step to over up For the versus up three, year third now Full be the be X% modest growth X% XXXX X% X% fourth year quarter, to we to capacity a expect to expected sequential capacity three. is up year quarter.

chain XXXX maintaining ahead, operational towards that term, a expect the planning assumptions versus we Looking to Therefore, conservative higher for continue to ATC carrying continued fragile, and as to reserves ecosystem medium aviation the in headwinds. given staffing ensure supply are bias up we of levels success. such are remain set more we challenges

later we add third our week. third new transatlantic with quarter, and to the between we During London. between JFK And daily plan frequency expanded Boston service this London and service a

expect As year-over-year. to plans our growth about we return growth for we single-digit high rate our of XXXX, growth historical to to mid- think

our announcing as And our will EXXXs. expect next-generation our delivery to relevance we As next of our XXXs grow Robin older build also mentioned, Northeast-focused European destination we focus and cities. replace soon take we more cities other even XXXneo we be as aircraft in and largest Airbus

the X. history. In delivered quarter, quarterly the Slide third we in revenue result JetBlue's highest to Turning

holiday at capacity. three, expectations. third increased original as Our quarter, over the mile we Ian offset leisure impact to neutral of in high demand peaks. fourth the trends. particularly quarter, was year revenues see September factor upcoming XX.X% in load increased revenue demand the these quarter strong available confident by levels. strong net reduced were X our continuing we Hurricane unit XXXX pleased our and and points the approximately of in here continue per see We We above off-peak was revenue Throughout trends to end VFR month through positive a will the the seat are saw

year product a point, well quarter per third the in further our with ancillary low resonate and proof As offerings prices over revenue continue over extremely customers. grew XX% to our as three varied customer

year revenue XX% fourth X-point includes quarter, Ian, to the between Fiona over we and placement For from loyalty and holidays three. XX% Hurricanes year and This increase this the of expect unit impact tough the comps. a

our enhancing to bolstered performance the consumer initiatives. true our Our growing from new through in a different NEA Northeast. providing with domestic more in We've is our launching customers as growth programs. continues schedules industry well destinations, others, be to Crucially, benefits allowing strong which capacity, the competitor we're outpacing unlocked overall in flights adding Alliance, the ability immense customers and third our commercial benefit X supply with to rooted by loyalty choice Northeast Northeast revenue

the the destinations to pleased Northeast we've also with levels. JetBlue best We as August seen business service, own in new recover again were their to expanding another the business in schedules the and option pre-pandemic in low compelling respond typical and summer by see Alliance well carriers entrenched up enables to travelers, travel region. towards continue Day network step following the post Labor In and consumers. and matching July The region boosting for addition, competition provide benefiting as our

bookings the fully of second of which end now which Alliance, roughly recovered is Our the aided be greater at in us quarter, share are with Northeast customers helping yet XX% corporate contracted to Northeast, roughly capture corporate has recovered. revenue compared XX% by the a our

new pleased to loyalty engagement growth evidenced Last record above co-brand ell front, acquisitions, levels. as of XX% we is by record by spend portfolio our the program month, w I'm accounts pre-pandemic a persistently hit in see year-over-year. On set expand to highs, at over and

XX% to X% gap the As represents in made the a of to revenue traction testament approximately roughly to now revenue our total we've peers, in compared XXXX. outstanding loyalty closing revenue

the of multiyear innings not could of before, loyalty the in more evolution its be and said for early we growth. our excited program, I've As are we

seeing drop-off would to that indications a are closing, we Before no in very environment. any like keeping I on travel we eye air are close of highlight although demand, the type of macroeconomic

we economy is that downturns. U.S. comfort a look take the experience the is capacity prior suggesting economic our was than still industry's it quite much that in larger pre-pandemic levels, to with look different could XXXX, we As industry than the while downturn below fact potential XXXX pandemic, historical to

significantly For as spectrum that JetBlue we a the since appeals specifically, downturn to customers. evolved have a more wide our segmented business model last has of built strategy

our biggest to lever exceptionally each proved crew of the taking for and Our have. our for ancillary stable And work has during all course, you the the capacity of of members Thank also care and even and through again is hard we customers summer an busy pandemic. revenue other. base grown

the I'll Now you, call to turn Ursula. over

Ursula Hurley

the financial what JetBlue Joanna. XX the overview you, for on members crew to we I'd remained Despite share delivering three, three. GAAP team's prices, expansion We our available ex-fuel proud $X.XX. the delivering XX.X% guidance, over items, and that per mile results per year CASM, to arise a original a of important and earnings we action a can like through in the execution quarter, up and and was our challenges supports us. Revenue milestone adjusted tied solid over staffing brief per CASM since customers for improve our of improved up thank from in plans control, I'll our initial on challenges, in XX.X% are hurdles was year result was also start the from to over overcome events our for safely all trajectory. the $X.XX I'm value a fuel experience operational extreme ATC over continued our our staffing industry for hurricanes we all with impact Thank we've Slide line term. our record many revenue to first our seat outlook XX.X% focused that and external per very taking a of strong margin stepping all. fuel creation in share Cost available up profitability it mile the and record to three. pressures and past, performance, special our maintained in numerous quarter. forge pretax excluding pressure trajectory to revenue to year We've quarter long the incredible earnings cost despite tackle weather with laid third was our profitable delivered cost pandemic. of challenges generated very exceeded seat up and margin was and always

in QX. on Looking ahead, we profitable quarter build to and expect another our deliver momentum

Turning XX. to Slide

point third was quarter. to from During X roughly ex-fuel the XXXX. in hurricanes The CASMx XX.X% third impact quarter, versus CASM increased the the

which continue CASM. Spirit-related we combined million CASM we transaction costs, into transition with ongoing more resiliency operation, quarter, $XX EXXX exclude Separately, third the which addition, to were ex-fuel. the pressured build approximately fleet from in expenses, In

year operational capacity the fourth as adjusting sequentially to are to to year by X over For summer is three as XX% forecast CASM EXXX an back ex-fuel cost QX a of after full savings over rate our X to increase to our the growth CASM improving for we also XX.X%. XX% investments conservative from prior year our We're an QX while structural retirements. points XXXX of approach points the CASM in progress program increase increase. forecasting peel quarter, and or X.X% benefiting guidance to XXXX. versus of XX% some three XX% ex-fuel from enter planning to from maintaining ex-fuel The we early early We're we on tightening from

to Slide X cost designed announced quarter, XX. flattish deliver trajectory. Last us we unit a Turning help initiatives to

expect we And of to to cost program, support recovery. planning cost nonfuel in through our into retirements. reductions of structural committed $XXX or cycle. of $XXX our keeping ahead acceleration to Today, year-over-year as look and flat our continued secondly, unit million margin the we our to annual remain XXXX; our we're we XXXX, First, deep which cost drive million better EXXX

the facing sequential major we in next what that structural headwinds we're part program related in strong unit headwinds cost the as through some to a terminals recall manage the but inflationary fourth to of seeing envisioned help the from importantly, of ex-fuel maintenance new new was network. with the cost number of year, costs expensive visits several structural in timing, we're cost program. a most pressures returns heavy You'll as These X cost to benefit driving the offset our from our well as years cost quarter timing currently early to to improvement upgrading in maintenance across are airport We're base. pressures new in addition due

gaining we're efficiencies operability with some without the optimization as sacrificing our in older minimize soft and with in improvements fleet. traction to time initiative, effort, our crew our and of work producing in engines planning enterprise Specifically, investment maintenance our we

date. In we're retirement of from savings fleet X our of already the addition, aircraft EXXX having seeing parked these to accelerated

form a Turning to of $XXX $XX our XXXX billion end million of the $XX our layered an we our capital cap adjusted help and break in consumption which our to hedges XX%, balance insurance excludes to regularly We barrel. At exceeding This earnings help financial roughly uncertain $XXX or a was $XXX XX. of the liquidity derisk facility, funded fuel paid revenue. related the against increased to to with has a QX XX% to flexibility Separately, we million quarter, closed transaction. monitor navigate $X.X In for of mitigate million debt we environment. the credit sheet and as these fee September, JetBlue Spirit for of on also the quarter revolving expenditures market protect debt, we've hedges down to of we'll continue view to the recently on ensuring third XX% oil million, in to and risk Slide paid the profile.

year remains CapEx full unchanged at $X XXXX approximately Our forecast billion.

consistent CapEx through order several we we fleet book our our renewing the next over to with increase years. XXXX, ahead as work to Looking expect our

single-digit believe what delays, high our that production aircraft is While we target achievable challenges on recognize year are moving based OEM a to target we know today. given we mid- next deliveries and growth

we're Spirit transaction triggered the regulatory that voted to making we and receive regulatory week, and front, half million expect Spirit which here of close As for thrilled by good on Spirit proposed progress Robin overwhelmingly the shareholders mentioned, shareholders prepayment our first with quarter. transaction the XXXX. $XXX We're last fourth the of approval the in to

a enhanced delever one of and care sheet again strongest very a and once I'd quickly expect steer balance remains the flow generation earnings of our for teams Finally, national to of challenger create Spirit taking us pro to close, Big again. to pursue the the in all cash growing leverage we our acquisition for sustained JetBlue helping help like manageable we today towards Post-closing, low-fare the and thank Four. us expect stakeholders forma profitability. To enabling and to the our of industry, to position,

could a moves we've more Alliance, excited our I game-changing planned Spirit, the with cost loyalty our the new made, future. not program be and our structural about evolving including With Northeast combination program,

power long-term transform stakeholders. we to will our We questions. the take With of now and right create for are all on value earnings your path that, our

Operator

with come Our Savi [Operator question will James. first Syth Instructions] Raymond from

Savi Syth

you if maybe ask did staffing in of an this terms plans And what in the are provide seeing seems than it in XXXX, like XXXX X XXXX? here you're update for given levels kind Xx aircraft could you're And of maybe what taking on more to your year? I Can attrition? you

Joanna Geraghty

thanks for It's Joanna. the Savi, question.

the think, across of of actually So made. staffing pleased normalization in overall We're work our terms good I most of with groups. levels overall staffing, seeing, some we're progress we've

I other do folks of offer We also on our the groups in Maybe X. that's fantastic. want across us probably click to months, I'll a is hear most think are also double several attrition a where last or which seeing work because view pilots slow

what so So constrained to believe we're be with regard pipeline, strong the protecting to elevated we continue excess that pilot -- for a of very plan pilots, we we levels will reserves environment. on to for attrition ATC a operation and continue ensure we but can have during

of the pilots For close in incremental X,XXX as obviously, XXXX. XXXX, to remains of attrition. we also unchanged so inclusive we're hire to moving fleets. pilots. largely then tracking number drives the that transition for That out, That some fleet XXX midst And is we're

from the be think to attritioning we side, perspective some ATC, into we're the pilot so begins next an where is in as least front to again, And terms that So at normalize, opportunity this over hopefully, on of next. or hopefully, But pace. here cost and on is slowing hiring year track year there'll opportunity this normalize. for as hire X,XXX

Savi Syth

color, you Ursula, deliveries just your That's ever little on don't super are I CapEx think next given more up maybe Joanna. And may year. as follow comment, color provide a as many on if to this helpful CapEx that, able year on I

do So up? like Or CapEx? the should we think how expect step big a about you

Ursula Hurley

Savi. Sure,

challenges manpower and OEMs ramp-ups As struggling terms chain. we're are and the all well supply in with of aware,

Airbus delays. working with staying on hand-in-hand So any we've been close delivery to

year, in perspective supposed seen to planning update to take From our contractually, next assumption expecting today regards we're you've we're XX deliveries. a As in XX.

we're So $X in billion. terms expecting CapEx, of year, this

assumption $X.X anywhere logical $X be is we'll Next year, a think billion. and I billion between

the delays. XX However, still our single achieve that work high can we I rate even we XX mid- to going the the believe over planning or in managing XXXX. with to in to remain aircraft, so Airbus continue is think assumption this the with we I months want next fluid to also reiterate, growth with as

Operator

will next Wolfe Group Research. from come with question Our Scott

Scott Group

basis. a guidance So an drop on the implies absolute TRASM big pretty

not of the anything Just color terms cancellations? sequential color there, said seeing drop any anything on with Just you Is fares any know but or there? just in -- that any you in TRASM? you're changes I demand, seasonality? seeing Are

Joanna Geraghty

the for question. Thanks

color. So little maybe a

seeing we're by positive our positive foremost, obviously geographies, across and then and First we all fare. in VFR We're as performing followed all cracks load and seeing which of QX in into transcon, step those strong positive underlying are not very demand, well any Mint well. factors, extremely markets as RASM both all led of by

we're the really through specifically few pleased with you're seeing environment. are with Dave walk a to that holiday you're to demand I'll December from Christmas underlying So What QX period specifics. shift, seeing for flip the But the it things. QX to a shorter peak holiday.

modest in You're a from had Ian; very also seeing Hurricanes seeing on Florida. and with And loyalty of a you're loyalty. regard DR a issue Rico, strong Fiona, Puerto impact number then XXXX. the very, QX to comp We

So script, strong terms. the a but in in extremely slight we remains as you're decrease there, loyalty, absolute seeing noted

put So to But of other are trends X remain to color maybe little a these X? underlying bit there's Dave, that you QX. that, a just take. want extremely to the X-point all than difference demand the give and QX items that strong, a of

Dave Clark

Sure. a And magnitude. in I about very of and all points roughly terms think transitory here are pushing X just strong, you X the covered well. they're headwind Demand of same for size that the QX, items it

is of in some ongoing build there loyalty, then some QX performing. There strength some as choppiness to ongoing but mentioned, we were continue extremely how happy loyalty, our in choppiness As loyalty XXXX XXXX. sort with the from and one-timers just

very on three. over basis year both growth a and a We have continue quarter-over-quarter to high

comp XXXX. a concerns So hard in just all at no

a the this where from. And holiday was weekday actually the later originate school we is than days and calendars the out a well XXXX with was impacted lastly, placement, think I most the did an in And Fiona. seen, of QX the lingering leads And from to Rico the outbound are September. some on the capacity Northeast, peaks. Puerto you've in for some other the have Obviously, we late we both especially but perspective, On volumes on some have for trough set Rico, lower our airlines redeploy of passed chunk Sunday have Fiona, for Christmas from called Puerto opportunity back, it did which Republic is placement X a had some week and then hurricanes, Myers Rico and had with in Fort in improving for that seeing effects which revenue Puerto the capacity The QX. Dominican given business but hurricane. about great fare It's and customers then the to a in the on trajectory largest than Ian completely regards as before tourist. week, we're to fully a experience open

little that back concerns week, it here. no But fair and have XX seen sort we it's points creep below So of XX each where a bit but about still was.

and So all with no all transitory the demand. items at underlying concern

Scott Group

anything for at secondly, some hedging, the are just hedging And Okay. 'XX is on or QX of this this point? the -- it, just fuel rationale you why you're starting is it just

Ursula Hurley

question, the Scott. for Thanks

last to few the fourth volatility going over layer So something in the window hedges to a pretty costly It's opportunity or constantly we'll market protect enter been months XX that against to so, monitor we're hedging the of here monitoring market. it's the saw continue We months fuel back a in quarter. some forward. to

hedging insurance, and reminder, as a hedging extreme prices. volatility view against we we As in utilize to fuel protect oil

expect So hedges. the to future continue as we layer you and enter potentially monitor XXXX, us can to in market

Scott Group

anything for is hedged? there at this 'XX point, But

Ursula Hurley

have We at do point. this any not hedges XXXX for

Operator

come question will Baker Jamie Our with next JPMorgan. from

Jamie Baker

rates? to if to locked-in there's financing a deal I current fell trying if just But I'm point at missed delay understand line. off what deal the be your when does expire? the this, Sorry, exposed with I would you

Ursula Hurley

we in mid-XXXX. have currently bridge has financing the expiration the place that of So current

on drawn the we're currently not reminder, a As bridge.

you markets. financing fee when We will are paying receive at bridge. regulatory we takeout that look the in at approval, potential commitment that recall, point a time, we for And as small

point I markets remind time today. everyone, And where in at so the different compared could that to very sit look financing we

Jamie Baker

Alaska's Okay. that If pilot no That's look specific deals on and CASM rates, flat struck fall for XXXX it's allowance I helpful. And then may at any XX% or there current assume looks recognizing for about XXXX, I your than contract. movement in other the higher like rates, now better, then? be ex-fuel there's just between

Ursula Hurley

CASM ours year assume purposes, for change of not currently guidance planning the flat-to-better Unlike that a our are So contracts opened. is does just to lot for ex-fuel any current next CBA. actually open, our

negotiation to working We update the are the the complexity table, CBA. potential through a of at

of as year. And so for we're to changes from a current planning CBA CBA -- assuming the next perspective, no now, the right

Operator

with Our Didora next from question Andrew Bank America. of will come

Andrew Didora

change CBA? that the assume last to question. your Just a follow-up any in Does CASM XXXX assumption

Ursula Hurley

haven't provided CASM for any So yet ex-fuel XXXX. we guidance

Andrew Didora

thought Okay. the the CASM through you flattish -- thought flattish said in I I XXXX. ex-fuel presentation

wondering So anything if there's for just I X pilots years out. in was

Ursula Hurley

Got it.

structural -- program, a deliver period. is result we've flattish CASM committed intent our structural to the over our next cost as the So program, multi-year cost ex-fuel of

mentioned, So include as change to not CBA. XXXX I the a does

so in And not that, and guidance. multiyear goal yet on a to period. flattish is over provided that -- -- But get addition our to XXXX have to back we multiyear a

Andrew Didora

as think on he's do may you the the same. I next said XLR transatlantic competitive Got over change of the several that considering transatlantic think strategically, how it. Robin, flights ask do because CEO the think delivered, other ULCC ULCCs I the would the the years? just dynamics is I U.S.

evolves curious how Just the thoughts on transatlantic your you think get to here.

Robin Hayes

No.

think that the Boston We of as we total. a percent small you probably flight. I transatlantic plans. When out X% of around fifth and and fly market player with we think X% are pleased to the and number be are I tiny of legacy to a had progressing our on to very relatively first starting I to European mean that think say I know, of the the But those an represents in transatlantic. certainly, a thing see our are York of always mix to ASMs New carriers. historically, low-cost it's about markets, confidently opportunity and a we

our we're Norse a so seen carrying the gauged a that competitive what to continue. travel which of customers, legacy premium carriers to mix and I you're has with to and also years, with fare And for think We been mean for come in. seats is low-cost because And combination transatlantic We we number think markets be great the appealing with includes of carrier most these our segment I continue entrant overcharged believe We've to low offering large of out Norwegian, I to market. LR right new that's and niche the whilst a airplane a low-cost of product grossly product. want But we see called think Mint coach have we a a our by there. going customers that. XLR serve doing or both that saw that's what think and core a making the a is to great niche. that's going many

And very that plan so we feel confident to have right the market. serve this to continue we

Operator

Cunningham from come will question Research. Conor Melius with next Our

Conor Cunningham

production? XXXX, about think revenue you there's would for bunch Like opportunity that historically, above-average revenue levers so that of think I outperformance. outsized you would When what had a think best do is you the think -- pre-pandemic, unit JetBlue generate

higher. to numbers next those that loyalty, out is that's there Just juice but there there's anything that curious could spoke about know else And you you're year? I into thinking anything if else

Dave Clark

I'll one. is take Thanks, that Conor. This Dave.

like to levers do a look on very deeper outlined, performance initiatives want as talked couple next ahead continued we lot we've go a for that the year, about of Travel strong strong seeing in is the Products. growth well we're in to we as though, them, of haven't that revenue already the things JetBlue loyalty As it yet. of I

buy-up choosing we've products, the the come will been XX%, leisure But all our has really lot core XX deliveries is next year given very you'll seeing or cabin, made the buy-up seeing there. strategy, about strength Mint core is and is system. last which year, than XXX seen configuration to above better which having like see excellent really And with premium customer RASM has one within things Blue strong customers Airbus also a and progress of now of our It's in Blue family a improvement Extra So segmentation strong with points numbers fair. a Mint our well our the X.

we're up. in response be pick more area to our So this seeing low there thrilled and and really secondly, we're customer Northeast to the very to And pleased there. more Alliance, then fares, offering customers be choices

of our network. remain quarter, of example, our above in revenues really our really rest in response accelerated profit and the margins good and then We're for is the than So more targets third the there. quickly growth the quarter-over-quarter NEA sort share And improving. seeing corporate code

stickiness, and our and roll the has to As benefits account improve corporations the because been accounts NEA. really continues more than seamlessness loyalty our booking the greater and our additional non-NEA growth co-brand to points And some the out, card future we're of geographies. seeing NEA geographies this in then We're code share. lastly, seeing faster signed

to of us go really XXXX. help these through revenue up we been speaking So continuing and we've initiatives a as good think ramp we tailwind that execute should give

Conor Cunningham

program, as And what's your on focus through hold lot we helpful. than start quicker on I'm expected? of to you into curious a then That's your just would next cost work buckets maybe have taken then what's structural Okay. the biggest that? year And

Ursula Hurley

Thanks for the question.

building our reminder, see planning. to is we're risks. and in So optimizing collectively rules, smarter, how building resilient hidden planning we're operability we've inefficiencies, We're we're our meaningful reducing doing and more we're and existing enterprise identifying what any started a progress schedules pairings. And we're work structural around here as

actually seen So in associated and improvement with improvement a point work. between QX, QX enterprise sequential the we've planning our of

that we as So continue to to going up next ramp enter year. is

we're entering on to also addition opportunities make our year. In meaningful maintenance that, going progress next to

retiring airplanes. moved which we're we in to a So phase

and do airframes strategically we've or we been engines. so in not investments what on level And of decisions make making do certain

you next continue benefits. as will maintenance see year, So enterprise as to benefits planning well

remarks, our started as in we retirement that, airplanes. In actually EXXX the of mentioned my I have addition to

associated to So up. with QX we savings -- savings point QX ramp continue that actually that, a and and have sequential between will of

reminder, deliver that will are in the want think savings $XX In between drive of regards carry we've will of the So will to as these cost costs, year. I as a through. retirements of program XXXX, next reiterate, cost structural and and those retirement, structural structural items. avoidance savings million assumed onetime in million, $XX terms million EXXX $XX to the EXXX

run rate, million the will isn't savings So years. over the it's but that onetime X next achieved be $XX necessarily

Operator

come Duane Evercore with from Pfennigwerth ISI. question Our will next

Duane Pfennigwerth

to peeling could which a peaky what little reliability that summer. sequentially just of you in So I kind of and investments is specifically piece Or a the kind you I there's the What back just it's of you on over guidance bit. that less wondered really are you expand of you improvement a that you CASM think kind made if slack kind are confidence the on loosening? do it? gives seeing a to do more it time enables system, is function that? of of And

Ursula Hurley

Thanks, Duane.

and and points back So are between summer of external to of QX and investments, the that is internal related X.X QX, majority we peeling labor.

a are throughout we you ATC network, recall, somewhat in As given delays. of the operating environment challenging

so built labor And deliver to of our ensure we that and naturally into planning we around a can level resiliency operate.

Joanna, So else anything know don't if have to I add? you

Joanna Geraghty

of Yes, a things maybe. couple

back I think summer made we the this biggest investment the was pulling schedule.

And as adding you capacity to we're into so I back QX more QX, think schedule. the see

paid showing some investments have that's So these off. of think I

be, which teams. and hiring peeling is sort higher, even slight -- in program we're to things We're on this is and mentioned rest In seeing the that's our up framework. ease before. of some ago a more pace then pilots, a trough, where our the which obviously, terms year I a on a QX actually, some a back, we were across in-flight great reserve relaxation which a place higher, We're QX, cases, levels. airport some higher offering piece of of fall, to is And that given of other actually of slowing great

would high reserve have XXXX, but will as We XXXX greater to reserves XXXX. not level expect to to have in continue I plan as a

time. improvements there you'll so And see, I think, over meaningful some

has because ATC we of in challenged, fragile. of to terms careful this particularly remains FAA they're environment staffing We think correct next partner, are is few seeing though, ton The don't bringing course a is great what know been challenges. We a the in going around being transparency NXX the and months.

them working are days. they handle of with So programs and assumptions that and some see closely in we to aligned what operations are of our planning how expect we we some irregular to the ensure these

levels. remains there opportunity investments there, but some in reserve pilot continuing So

Dave Clark

aircraft And to this see well. is several in improved back move continue from utilization on so I'll our towards helps note XXXX as to utilization. that year-over-three ramp we Duane, one well a is to we'll basis QX, Dave. thing continue as pre-COVID QX And that points as as our we

Robin Hayes

leaders the only award the X so this is And you're to to your to because Duane, win person question. answer far Robin, get you're going

Duane Pfennigwerth

It's is answer, comprehensive a appreciated. very which

Robin Hayes

more about We're in you're -- where But see so we're years to more to sort of to I the do back not XXXX. If buffer were peaks that well. in confident go going of all, future in think the we first in we of as the going going think -- to that. we -- if the about the than flying we're more we -- pilots think XX% did about been we're if about the November, we of XXXX. have for capacity pilots, to talked sort about going for Joanna same -- be example, We've at look

some know -- by, over and What we know those will what to as don't unpeel driven can So as -- there's reduce environment step know is we to Joanna we quickly be this cost that because clearly, it's we we time. external quite significant investments issues the unpeel that We do up. fully is very the year. we still don't how a we've don't opportunity seen But it's a it. said, going of there significant

don't look And said, lower ball to coverage reserve have so a we I of will -- I if a Joanna was into year, that until year, know if be kind big won't would get this a crystal back we sort step down next to into I at take how of as be. had we yet, XXXX we levels. planning cycle, but just than

Duane Pfennigwerth

a I hopefully do quick follow-up, quicker. have

that build served markets very LaGuardia? you that routes out JFK that pricing? you you've terms markets essence, historically you demand completely LaGuardia, and from from in in look LaGuardia, So out different as surprised have to of anything respect maybe that there Are set, as has very different built -- with different Just from right? now

Dave Clark

since we that schedules different over does improvement time, plan with customer is we've improving lot flights into this looks that we Dave. lot the team a that. a This completely to several thought, ceiling that LaGuardia sort been align Thanks, say only improve nothing that the surprised And by has take naturally a constantly July. XX it the more not capacity months raise here, there's to up closely so but or over as reworking accelerate learning than ramps in went certainly Duane. capacity past us the I'll I'd especially day and of is schedule but the demand. this

year So to surprises, no York improve New that our the but out and big months refinements and over rolling performance. be continue we'll tweaks next to lots of

Operator

will Our next with from come Becker Cowen. Helane question

Helane Becker

-- you to change to in has the as Newark the alliance? IATA designation way respond for So the change have government NEA the you on

Robin Hayes

absolutely The that construction we codes. take made fare change relate to that. proposed not. I'll really to city IATA No, has what doesn't of only. relates Helane, It multi-airport call or sort

get and to up, clearly the see into move regularly you pretty Expedia so JFK. and York York if GDS, as Newark. or airport New come authority we customers Everyone NYC, by if And those type who airports go in system airports go you're the including you a into of And works going all same between managed part as well. Newark knows New LaGuardia lives is

but NEA, So business the also on other -- any airline I no, impact it business. has JetBlue's impact or not on mean, no no

Helane Becker

a just then And of helpful. point very That's clarification.

for are in aircraft say, what are and replacement year you percent aircrafts planning XX next of you're just the can aircraft percent out, growth? of terms In what and

Ursula Hurley

we're so to contractually, take -- AXXXs. next Helane, delivery XX we of take well, year, to -- take we're expected supposed

that is that XX, can X of replacement. we we retiring also assumption well. And of those consider contractually some We're be will those so XX then planning retiring Our take the as EXXXs. own, you we

airplanes, AXXX that the summary, replacement. margin-accretive aircraft So next year that will the we next year, take take XX in we be

Operator

with Mike from Linenberg Bank. Our will next question Deutsche come

Mike Linenberg

remind CapEx. being this that's question cash. and of billion $X out a on airplanes, The just year, predominantly that's paid just Ursula, of out to us, --

debt aircraft on of Your a are commitments that's for CapEx given that in to call, cash and that gotten you be presumably, mix have aircraft the $X that you -- any earlier of finance as the guess, add-on, coming guided to I size? actually $X.X sort of an XXXX? billion do going billion for to is And

Ursula Hurley

Mike. year CapEx year to next $X billion be $X.X billion, going at estimated of correct, financed. moment. be range XXXX cash. funded billion The this currently We're of the the is you're will none completely The through $X So by process that planning

in share we'll color the so baseline and with And around January you cash assumptions financing. between

Mike Linenberg

know down the or an Okay. don't in is an from I Joby. know And specific, in guys have that anything you investment Joanna, X or that investment Delta doing I not I specific question, then the airport a with road? news or Great. And Does like if That's geography if was making also preclude just them exclusivity. you exclusivity. Robin I'm sure it it's Joby. helpful. read somewhere this week at the something ago, a an about

know of a sort I comments, years. any jumping Just I'm ahead few

Robin Hayes

No. think mean, they I seeing and investments in had there. We priority exclusivity now has and of very grow partnership executing subsidiary on really spectrum very have. right transaction are provide initiatives important we yes, our their for Spirit Mike, we the very business many I'll We're with we period that airline. that. have Delta I But this that them, early Joby. Yes. JTV strategic across years. focused of great on and we And the appreciated announced No, focused a done an because is our getting were does opportunities a the dozens And ventures, X partnership investor take with develop.

Operator

question come Susquehanna Group. International Stathoulopoulos with next from Our Chris will

Chris Stathoulopoulos

So give mid- grow more that you modest year? next that a on still you the remarks digits could your think aircraft can to X% in you X%? mentioned for delays that prepared Is bit Robin little color Ursula, you or do And or single in capacity have the to for that that CASMx easier you're answer in with the with aircraft modest fleet could down this you it said looking for? that the way, you're planning I the you delays? And another it's schedule fly XXXX the way, with now guess, if just

Ursula Hurley

I XX supposed mentioned, is deliver to Airbus So, contractually, us airplanes next year. so to as

supply driven they're that aware well all challenges we're by and manpower think I from ramp-up chain. struggling

those. We're can CASM believe we seeing planning the to the better airplanes, ex-fuel. also that supposed get to manage single-digit are And a believe flat turn, XX perspective, assumption in we're rate delivery XX We're high working of that get we we From that next through next can those growth we're or for minimum deliver hand-in-hand contractually, deliver we mid- we year. So to planning a And them delays. we with with year. XX. assuming

be next of to down utilization we in here as points fourth handful the year. by quarter continues a Our enter

we well. fleet-wide points Our a to of expect increase couple as utilization,

rate. assumptions based on can today again, to with we been we've we Airbus confident feel growth that the what So mid- high that on know working single-digit we and deliver

Robin Hayes

Yes. much we today. is as And of and I signs question XXXX in -- people And option know a out be today, delaying we macroeconomic I also but what we could also add think have. concerns can we're can there around the there that on of We just color not need any that we trying it We're that, accept recognize give to. have future. the on to retirements mark if seeing if to as we based

around so next And margin. year take by driven ultimately decisions will we

of And the so do to capacity to we that's if also what flexibility have because economic adjust down, we need environment.

flavour think bring year in about our built by delivery to see down of end lot we the this increase day. clearly, CASM up significantly to today. go capacity flexibility we're governed of making some we’ll I that retirements, environment of what utilization. next day, Ursula terms count economic delay be around derisk next a have we as taken to We've assumption the is we So going But operation, forecast the spare of our that year. into capacity the the the And talked at the off year.

Chris Stathoulopoulos

nuanced watching your and that signal slowing? to so cyclical that. a And are the about might An what you data believe day the follow-up, you're Okay. daily some key planning a cash points Joanna, but are some guessing, more of bookings, around being one What potential spoke that? every points cautious in with comments, you slowing data obvious respect intake, I'm

Joanna Geraghty

Yes.

opposite, slowing, be signal strong. the any We're Just It's didn't we clear, quite seeing not cyclical any very to actually. slowdown.

we are But not we're positioned being the in is the largest. speak with we we to levers of we Specifically, down road, underlying demand. capacity did to the pull, one think well slowdown if number of there seeing terms any have

In of terms things any load, of things we or seeing nature. we're But not bookings, in fare, anything terms that, signs it. beyond look of that slowing of of kind for

Robin Hayes

Yes.

time, since have probably up between -- and indicator. about has long that in one Again, have. those was GDP for correlation the also addition, no kept significantly think the XXXX. all a has and metrics could probably struggling economy sort there's not in number point. I at of grown growth. think the look card If industry concerns in growth with a that with Capacity And we're this a of who is what data -- I other capacity we been we was can at best good terms you credit here think linker GDP the is capacity of of

a have GDP growth since that occurred XXXX. we of so And lot has

that a And And a again, how so who the already much that sort haven't flown demand, recession into that higher people of base and period we've that question a eats got. to is we if have we of of see lot continue time. of for pent-up

factors to on very into. we're me factors, haven't historically that demand there's seen days still a we see of eating high to lot pent-up load high load where continue which We suggests still

Operator

Hollins will Our next James from question come with BNP.

James Hollins

really or your it to want I corporate run I the Maybe through you're in immediate. how the is you the good conspicuous corporate of either absence from pretty current could pre-COVID, come talking by it's on just season? looks your its seeing how I thoughts perhaps mean sort on maybe travel to presentation. it into travel. back I release think trending Just mean But up recovered corporate travel, the XX% me,

Dave Clark

X still certainly with weeks Sure. seen is here. trends There We're travel Dave. corporate to Thanks, choppiness. the is some James. the I'll X we've that. in This last pleased take

want our is it's clearly still bookings. completely I declare whereas So to revenue think being XXXX up rest about levels, we and It's more success the XX%. don't of below the than XX%

on number So ways X in revenue that, we're But bookings, the a have relative revenue, to where this only to seeing week a we month did still not of actually go. higher the this things, We we're higher lag. a we travel, obviously, seeing weeks follows but travel same had so week year the it's loan long got XXXX. few than a earlier which did

before, the record, the we that So is for is, really us was And thing And very mentioned for corporate big a in new our which is New and Boston. us the helpful. accelerating the of past see lion's too happens NEA share quarter. in -- York as

ramps the have seamlessness, corporates heartening things like see code-share it So as with the additional loyalty benefits, layer additional NEA bookings, to responded very as in up continue how we that. the accounts, to with is

as as So corporate we recovery NEA general about good the feel the driving. very that just well it's benefits

James Hollins

American Northeast on that case, the if I'm wondering of not traction from headlines brands? obviously, afar, on Alliance. merger of you're the a with court court And mean, I your I was it's just, then in any idea having a lot getting

Robin Hayes

Yes. thanks believe compelling the court question, that, the wrapping a soon. for put that The trial and we’ve case. yes, I James. I'll is take up really case on --

lot conviction to Everyone loves want flying. New don't having more a to York The have see. benefits consumer the how They flying, in back in for it NEA. JetBlue there JetBlue loves more are about go everybody was. of Boston to everyone We having

we'll so But of to I'm it's will The our that the a -- on at a day, decision. that. judge have case the pleased the are have put team we very And that -- process. hear end wait with forward. we make the confident And we're

Operator

Seaport Global. Dan will question with next come Our from McKenzie

Dan McKenzie

a Street what the put and in is $X a I'm how more about and modelling be on seems could guessing in you're Street to earnings for cost utilization mack thinking place the bow that. revenue some drive share pieces the to shared Robin, comments, through are business the truck drive in and you've you the in. past, to point And the at a XXXX, dismissing

do to just, early is, what embedding outlook? question have tell today? based recession to the back next on you that you to It's here. consensus guess say in sustainably that continue higher know I model. a the And you confidence from not to ability would is what's given course, year in your margins of again, point, conviction the going the And us drive So

Robin Hayes

conviction, the We around -- geography had challenges we everyone that down diversification to capacity hiring a we as to we during in some that lot of reflect, pull a some a constraints made cargo I in have. some question. planning impacted. We and didn't this a we of I had. revenue think, the lot COVID others thanks in bump Dan, the deeper assumption We April the streams like had of mean out were system as external for different of that we the some accepts have to most I I No, a Yes. of of was hole of that some think mean, had we climb COVID. confidence the have than because

have momentum others also correct. course, Of think I we course good had And to now. have

see We some some performance, Dave Joanna strong to on of QX. through CASM. executing continue the We're notwithstanding QX that to walked and one-off revenue headwinds

program new cost We have structural underway. a

fleet on as the have We going modernization well.

Our last revenue we've of geography years of and the from fully initiatives benefits we've then with degree not Travel what And forget top like that on other all still the couple seeing NEA. that are is we're the around loyalty pleased York let's U.S., recovery And geographies and as said we're seeing same recovered to not the that, the Products doing in New now. those. exactly and doing for now, been we're

are that's confidence on past We has and to do. recognize we a of we that be the that, results lot on delivering So have to exactly earned conviction. intending what quarter-by-quarter

Dan McKenzie

Okay.

sit, Second regulatory XXXX, there that that question merger wondering counsel? what your give that by points simply might I specific. guess time early guess some that a messaging to where you you there -- Spirit just approval I'm slip? is frame certainty data cause that? the by here, from -- And think for that is are legal outside the Or kind anything -- seems pretty And is I is around of that

Robin Hayes

at mean, I space, quickly line than if you No. I Thanks, historically, conservative out look Dan. in I mean, a that. No, been more the and time there. they've pretty think laid transactions we decided previous precedent

through recognize, and this, we cautious time oversight a this to beat wanted we've regulatory will a think as I and been face lay that out hopefully transaction lot it. of overview. pretty we line And

time a around the We're in down we're of and and Fort very speeding of a creating bit right down changing merger. lot our challenger the prospect about not excited several there more there's organic this geographies JetBlue this national true years. And to bring effect So more I've quite low-fare excitement by spending been and Orlando recently anything. And markets plan now, of Lauderdale. up to

made And very we quickly get to to as regulatory get that the being the permits. by and with Justice on Department respect that's are requests the we're excited with but hopefully approval as fully to regulatory comply a so are time going of it, process under way

Operator

the conference to question-and-answer Joe This would session. over turn to closing like our concludes any remarks. Caiado back for I

Joe Caiado

day. us. joining Thanks, concludes our a Anthony. That great conference quarter Thanks call. Have for XXXX third

Operator

you conference Thank presentation. now The concluded. for today's attending has

You disconnect. may now

JetBlue Airways (JBLU) 25 Oct 222022 Q3 Earnings call transcript