JBLU - Earnings call 3 2023 | JetBlue Airways Corporation

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Operator

Good morning. My name is [ Joel ]. I would like to welcome everyone to the JetBlue Airways Third Quarter 2023 Earnings Conference Call.

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

Unknown Executive

Thanks, will Quarter morning, us Good earnings release morning, [ thanks presentation our this Joel joining that call. the for we we everyone, issued on during Earnings XXXX and Third and Call. reference This our ].

Robin our www.sec.gov. All of our Hayes, website and at In on Joanna York investor.jetblue.com Chief Geraghty, results these documents our are website are Officer; Executive the Officer; and Chief are Ursula President of at Andres Products. available discuss Financial Chief Officer. New on our to of Clark, joining our Operating Revenue Q&A and for President Hurley, Planning; and Travel Barry, our us and Head Also JetBlue Dave SEC's

within are we of results could materially these and risks recent Securities Litigation in actual implied During will most recent results meaning forward-looking expressed release risks or most harbor of All statements XXXX. subject materially may statements of differ forward-looking make such the the provisions call, forward-looking earnings to refer of Reform Private from a safe uncertainties those the our uncertainties differ contained statements. detailed today's to our the and that Please filings and to discussion and and more from other XX-K those statements. for cause our in Act

of on the we call undertake than these reliance update during during are may financial we of should information. to not certain other call made date call, made course and Also, non-GAAP this statements. the measures. place of discuss statements may as by obligation the The be only as forward-looking our no law, required undue Investors the

a corresponding and and of of a sec.gov. copy on website our these GAAP which release, earnings non-GAAP the For an please available is our refer explanation on to measures, to reconciliation measures

add our Spirit regarding to proposed note for an Airlines. like I'd with transaction Finally, important today's call

be forward and taking trial Spirit questions in we questions remarks. understanding the will your what trial answering is prepared now has not today's look beyond on to or concluded. your our Given begun, has once commenting appreciate We

like over to the I'd Robin now Hayes, CEO. to And JetBlue's call turn

Robin Hayes

everyone, disruptions outstanding deliver morning, crew number their dedication the and crew our hard summer, traffic our occasion high thanking customers. for to exceptionally and start joining by and and me. day Good thanks airlines weather incredible and faced I'd of members experience. every given challenges JetBlue members service to and rose air work, our our each like to support for control This operation the an

as ] results, aware, many began to you of [ today. proposed the into with the getting antitrust Airlines our are Before mode trial Spirit related

industry presenting believe strongly next We to dominant a increasing this choice, our the our few creating court best look by is opportunity case weeks forward Big to combination low-fare and X over competition to overdue lot as the national Spirit for with the we challenger airlines.

and December. trial expect the according week to out proceed during conclude We first the post judge currently is laid scheduled the of the to will

half of outcome, to year. successful transaction next track a remain the first Assuming the we close on in

comments or any matters For Kush [ for while therefore, would mentioned, transaction to relating judicial is call it won't on ] today's a trial any obvious underway. we comment this making And as other is Spirit reasons, the any be while underway. us related proceeding be inappropriate answering to on to questions public

shift ] prepared our the We demand. challenges quarter for on planned to [ of post-COVID moving in the Alliance, share the the including Northeast and customer in third delays per X reported Now presentation. of wind Slide several a loss results quarter, adjusted control down We and $X.XX. of

significantly fuel also costs jet expected weighed in greater on However, results. than weather-related increases disruptions were and

results. certainly are satisfied we these with While not

to working working experience. the is team customer also protect headwinds while mitigate Our hard to these

Turning Slide now to X.

outpacing our including We headwinds, industry outlook higher that are fuel $X.XX prices per share. We is loss now the updating and expect near-term capacity to reflect these of demand. share $X.XX to domestic year impact per full of full a

steps deliver Our we control identifying while focused can taking shareholders. team what additional to levers value to control, on remains to

First, to ATC with and we XXXX, full respect that pleased through staffing weather extended affording step a has needed challenges, we advantage to in be are critical York waiver system. is to its in taking This a October the XX% fragile slot much of. ATC support which FAA New will

Importantly, announced cycle, XXXX. not XXXX to providing in well were capacity, time we efficiently do the was the planning ahead able which waiver to of reallocate

as better travel demand. steps we with to continue evolve, Secondly, are to taking patterns customer match capacity

demand overall impacting are recent X cities levels, the to We markets. prices uptick in other remains closure pressures, healthy pre-pandemic margins capacity fuel of the blue inflationary announced compared While certain and recently adjustments. in including

yield our is quarter which As fourth resilient by year. in be the and primarily we to look moderate ahead, demonstrated international markets, capacity growth this expected driven have will

We've reallocating out one are expensive pairs. continues XXXX [ as progress. ] returning NEA begun of to benefit in as plan Wind return capacity we and into and continue the to to to LaGuardia ] LaGuardia our These head costs expected LaGuardia ] revenues we airports. Finally, most Down as changes XXXX, [ is of American we [ slot additional

Slide to Turning now X.

position the right near place blocks continue believe have we term, success. building for we the to face in we While JetBlue to in challenges firmly

Our constrained competitive large York is footprint key advantage. New slot in the a market

historically remains city XXX engine JetBlue. profit departures with and largest per well has for over York day our focus been a New

in the more work competent margins the as While progress New We margins pre-pandemic for their we rest are our York quickly clearly to have pre-pandemic fully New over York in the time. to do, the will recovered as encouraged not seeing market. have continued but levels by levels in recover of network. We're -- pandemic

cars We're structural profitability where a hotels Travel in also driving for our have in year-to-date. seen increase long-term XX% JetBlue revenues products, we from improvements year-over-year commission and

percentage by approximately compared to TrueBlue important year-to-date revenue, increased point continues program redesigned of our as loyalty revenue be of to XXXX. source addition, total an X In a which

Finally, programs -- progress, this we quarter. deliver continue to on should say, controllable execution steady I cost

is from by great structural cost to our end success to seen $XXX We million on million deliver the program which have of savings XXXX. $XXX track

to We also ongoing fuel-efficient with the program as benefit fleet strides in EXXX margin-accretive make we AXXX. our modernization our continue

conclusion, which provide for I'd crew Whitney work and engine thank towards issue, our in, out, driving headwinds, to profitable to place In deliver like above Pratt near-term they the margins right are challenges members other update focused while as our we we go & confident to foundation have the GTF and including again day current day beyond controlling and to improving growth. customers and continue for we in what on, the will on I'm can control. an Ursula navigate each

that, to With Joanna. over you,

Joanna Geraghty

to our each our team navigate challenging customers like continue operating also support I'd Robin. to a you, take as We and very environment. care efforts to unwavering thank we other. your of much Thank appreciate

We continued worse quarter disruption ATC historically than to experience September we've September, restrictions. weather, with during greater-than-expected seen, unusual due unprecedented far the to coupled operational far worse

ATC versions, ATC. of due summers airborne days The throughout events In the based subsequent time quarter, we had severity the multiple worse the and XX covered. on of taxi third cancellations these were in causing third consecutive days versus days, to was and seen year. the than days Often extended constraints delays in holding, as we last also disruption cancellations on significant quarter previous occurred industry operational XX

faster us investments to and our enabled completion protect However, better recover factor.

for As X.X% quarter, a capacity the result, third grew year-over-year.

we XXXX, we with area and York New mentioned, through FAA's Robin advantage XX% it. decision of City the recent are As waiver October extend full of slot are pleased the to in the taking

schedules published, less after However, given that this changes efficient were fourth and, the QX close quarter. was extension in for in resulted our announced the schedule therefore,

plan XXXX, to hiring For and associated plans. appropriately customer manage be proactively we mitigate disruptions address network, costs, will better able our our

While terms cancellations. long waiver is that initial number of is their we minimize step, getting of go drive performance ATC of level improvements right the a slot staffing to way and the within the a recognize in and in to there experience substantial still good

with plan FAA can issues. With will crew the ] Mike with serve ATC We we on disruptions elevated to and a a as to permanent levels. reserve progress future expect these for recent infrastructure we champion operation we that [ hopeful continue conservatism as the continue are critical administrator and see appointment, foreseeable Whittaker's

between capacity growth scheduled quarter, For XXXX. capacity to are fourth we in X-point of the quarter forecasting grow point X X.X third points to the versus reduction year-over-year, sequential a

periods. are reduced We proactively have in off-peak costs of certain higher fuel managing light our and and capacity and flying markets in constraints aircraft temporarily

markets will growth by quarter seen yields fourth be international up relatively we where well. holding driven Our have

we full capacity year, narrowing to are X% year-over-year. For to X% growth outlook our the

Turning to revenues.

as close-in X.X% decreased operational softer-than-expected Third challenging leisure in and September. demand were well off-peak year-over-year quarter backdrop impacted and by revenues the as

bright X.X year-over a points core percentage remained spot the during offerings Our premium outperforming RASM quarter. mint by with

[ in capacity Mint strength even up XX% see to ] year-over-year. with continue We

deliveries All our premium for foreseeable be to to will future of continue leisure the in grow believe us our configuration, which the offerings. allow ] strong we [ AXXX neo will

have double the continued more EXXXs our are we seeing more look year-over-year on And more that even revenue seats in to with growing We load replacing. AXXXs space digits are also the equivalent in as strength factors. XX on to QX even even roughly space space expansion XX compared forward they of

continues continue strong to to we also deliver as ramp. results Transatlantic

and new expand This and York better the Amsterdam, This network and transatlantic as week match our we transatlantic New to Boston, announced as York wind LR capacity are take seasonal continue Dublin summer Blue of we launched our to Edinburgh. City to last to rebalancing service service we forward to delivery down quarter, New City, in NEA, our additional we continuing includes look third the And aircraft. from supply demand. AXXX to both we and

capacity new Punta stronger quarter in footprint Republic Dominican New meaningfully are Santiago from and [indiscernible] with Orlando and in from where to as at Cana we are York services reallocating this to We Caribbean, our geographies launching the the in LaGuardia, Nevis. reducing performance the such to fourth

also York. beyond. are waiver taking addition, to in the extension These New of from New drive performance XXXX away continued full improvement capacity we will in In changes FAA allocate York our advantage slot and

we fourth travel the peak to to see during quarter, demand healthy periods. Looking continue

Specifically, expectations. demand travel is the our for line around quarter with in holidays fourth

is during said, Labor travel dropping an acceleration after taking However, are in seen in elevated being we demand. off business off-peak that significantly back sign notably seeing bookings summer. industry have through periods, recovery up encouraging That outpacing capacity Day, an corporate we the since

XX.X% quarter, expect be down For the fourth to X.X% revenues we to year-over-year.

now full year-over-year. year, we expect revenues between X% and grow For to X% the

with redesigned of engagement TrueBlue as more have and program pleased year-over-year all levels program has remain strength member loyalty XX% following we the launch in than grown year. Finally, our this customer nearly our the active across earlier doubled members

We grows. digits to recently introduced increased from expect co-brand reach and year-to-date, partner has key directly this double as spend Barclays we to contributions on our points card airlines engagement ability portfolio TrueBlue the on website. Co-brand redeem year record our

are in members are growth of have to far everything part as by deliver thanking like multiyear by our operational excited amid our the backdrop. done TrueBlue these the crew have close our program to again evolving serve enhancements so and gap a challenging I'd to expected We to closing our peers. our and once they journey delivered for customers

With that, to over you, Ursula.

Ursula Hurley

to our add incredible Thank for fellow commitment for their ensure customers, delivering thanks crew my our you, Joanna. and members I'd to work our and like owners. we to are team our

up quarter, we as related end disruptions was of of prices. fuel mentioned, our and and share rising $X.XX faced a ATC loss ex the unprecedented the third weather X.X% high CASM guidance. of As above delivered per fuel just quarter levels for Robin we

investments proactive in pilot the third drove CASM additional and planning boost of to resiliency quarter. pull-downs fuel ex and reserves operational points capacity pressure through Our X

extended points cost delays However, a third quarter. number greater in volume incremental and hoteling disruption-related of higher CASM headwinds plan resulted an in labor of greater X.X ATC ex-fuel versus premiums, of a the driving

the CASM near Excluding these of guide. our midpoint have we delivered headwinds, unprecedented would ex fuel

ahead, to are fourth quarter, ex-fuel the increase for CASM XX.X% Looking X.X% year-over-year. forecasting we to

maintenance uptick events. in our points additional step the and pilot a X to to compensation QX X CASM to related As agreement timing reminder, expected tied points related the up the of ex-fuel includes

near-term In cuts waiver. the slot capacity made number a New York we've to addition, of utilize

mentioned, Robin announced was Joanna However, and as of QX. the shortly before the waiver start

an incremental So of in the to resulting headwind costs with many that CASM our fourth were quarter associated flying fuel. X-point ex already fixed,

challenging up our X.X%, headwinds end outlook our X.X% of For we we ex-fuel to have the X and raising to proactive operational are to summer this This the includes points range. recover the the prior above full quickly year, from challenges. high disruptions just from investments these made we of more CASM faced

magnitude sheer offset staggering. to costs, While levers identifying delays of the we have these been incremental the ATC in has of been weather-related some successful and

Pratt GTF to impact compensation for With respect to engine have the are Our issues, team continue assess is continually Whitney costs. ongoing. conversations additional and around the with to we longer-term mitigate looking to discussions opportunities &

low Pratt anticipate digits digits service. These months, XXXX the aircraft and cost we out be issues grounded the to changes. XXXX also to on introducing an up of to double Based plans with due the a expect number & XXXX engine GTF analysis, to to last outlook measures Whitney's and driving of end impacted. are we number of capacity self-help aircraft X to our engine of of our XX with number single throughout initial over increase And elevated issues, high we out-of-service ending of aircraft expect year despite meaningfully

aircraft we with downtime, GTF-related of a to XXXX year-over-year planning unscheduled the be are Given slightly quarter aircraft retirements, basis. first the the delivery delays down and in on increase in capacity coupled

With delivering cost remain laser-focused the structural program on our efficiencies. we capacity executing growth, slower and

expect approximately XXXX $XXX We structural program. year under cost million our in drive cost reductions million to this $XXX $XX savings rate through in and run million to

We we input as offerings streamlined productivity. XXXX expect technology-based solutions ramp to our and use quickly of enhance onboard up throughout for ramp to these savings costs

$XX we we Additionally, avoidance AXXXs. through have in replace and to date remain with margin $XX fleet track modernization savings program, million our to through our accretive fleet achieve cumulative as cost cost XXXX on maintenance EXXX of million achieved

long-term which our our on Additionally, structure all the for benefit EXXXs we cost the fleet. to be XX to out retired of the EXXX we basis XXXX. as end continue XX% cost is transition to a have EXXXs compared unit a more the EXXXs. will as be of AXXX already efficient by to the exited plan a reminder, And

remains third revolving liquidity $X.X by year. and pleased Slide million which X billion credit undrawn our We we $XXX ended the which in to quarter XX. Turning extended to with announce we're recently including facility,

a as conservative We modernization continue up take step managing fleet our to we liquidity approach efforts. to

$X our We delivery have new approximately financing committed third year-to-date aircraft which our have in been billion financing quarter-end actively reflected We position. quarter, year-to-date, for liquidity is XX total took aircraft. million of of bringing the and place X in in $XXX to

early X take X through now We of expect new pushed deliveries for XX year-end aircraft year, a to delivery of total additional this into with deliveries XXXX.

be full we to expect result, year now CapEx a As our XXXX $X.X billion.

have led prices. Finally, rising increased oil prices fuel to

layer continue hedges in help look to to this We opportunities risk. to mitigate for

provide In we operating through exceedingly approximately the of what today, As our we these we executing of our controlling focused an we which have hedged challenges. quarter price. expect gallon fourth and closing, fourth to dynamic XX% expected for to continue fuel our and benefit $X.XX fuel per environment, we to plans control on manage a to consumption are challenging while mitigate can quarter

margin-accretive pressured. and are capacity We to leisure yields schedules have that remain markets trim York And New our capacity as reduced our where we QX reallocating in opportunities. we VFR

manage fleet aggressively including cost we're focused program levers modernization structural on pulling to our at our disposal the and costs addition, plans. In

take our your are a to are our in strategic actions, confident with coupled return and to strong of profitable value to we now stakeholders. drive our question. all levels strategy that, positioning in initiatives the deliver will us we these believe We place growth, foundation, With have margins creating historical and owners long-term and

Unknown Executive

instructions. [Operator [ Joel please with go Instructions]. ], ahead With that, the

Operator

question Your Raymond with first Instructions] [Operator comes Savi Syth James. from

Savanthi Syth

excluding the then on think should about CapEx spend, kind of next how and as key some kind might, debt maybe inflows or we and think financing the cash and of I contribution any payments? earnings about If of you the year, outflows what merger-related

Ursula Hurley

to program. work we continue reminder, modernization a our fleet through as So

we of deliveries. up next a do have year, So in a number terms of aircraft step

So majority we're expecting those deliver of The XX are aircraft to AXXX. the year. next accretive margin

step-up a to related have modernization will CapEx we our program. that profile So in fleet

healthy assets. debt also balance a of And manageable a really We unencumbered to year have next we tower well. have as continue

done of only previously with inclusive year, So the not we thus debt is we deliveries this but this purchased raises that cash. aircraft that have far year did

We comfortable about is number liquidity to a and we have navigate through year. a paydown level So liquidity I a continue CapEx support the next The is. reasonable feel the where up have step debt in healthy unencumbered base healthy I is headline XXXX. think to do as we

Savanthi Syth

down if view? capacity given thinking can helpful. the timing just you -- you I wonder that's and would know if about -- provide to kind changed the to That's I but it? like and And I you're of ask kind unencumbered wind the of the LaGuardia the of new plans earlier, assets, shared also how just

Ursula Hurley

Sure.

prepared assets, through have of hit of quarter third So in year. liquidity I coming will remaining million $XXX about inflow, door, as the to already unencumbered. unencumbered my and the in has billion regards Once we in the we that still be $X will the end complete that in have mentioned remarks, cash the come door through the that the aircraft we'll XX of

currently we bridge loyalty transaction. is the in As have a That facility to bridge support place reminder, the by program. our encumbered Spirit

We our and we and slot have gates also engines, we have have aircraft, routes.

the so the out, to could bridge unencumbered use And it of And additional once in that liquidity. those that is over fall also will the some I hand assets will LaGuardia back we have raise to question. Dave future into portfolio to we answer taken

David Clark

entered For LaGuardia, NEA. we've X pairs we the at the season winter as the back height of departures much day slot as We handed here. XX flown a as

LaGuardia in XX winter. next late and in step roughly departures continue day we'll then mid-XXs day through that this of per terms down pace March, summer. we're per to we So from And about go through

Operator

Global. Seaport with McKenzie Dan from comes question next Your

Daniel McKenzie

back lot And understand just XXXX, in help but path looking hoping can us the timing necessarily there's the XXXX. of profitability. skepticism. Maybe say, of I a was and stock not the you to at kind Just here,

guess, from costs you level, revenue, cancellations of the I a It huge at so size us just and Pratt go how of can say, hit And just there's York New the City, a pretax size the profits, chunk engine some slower-than-expected the high that? just chunk huge ATC help can away. issues? Whitney in recovery seems we to like & point, And

Ursula Hurley

I The Thanks And business navigate tailwinds goal consistent that slower as that back going has get believe to Yes. anticipated. been we specific have we we is our to JetBlue come to through Dan. are we question, recovery than XXXX. to profitability. the mean fruition for to New York the

to However, to to levels. in back progress opportunities. up get profitability progress. New need we slot meaningful York see we're still levels, meaningful capacity XX% more margin accretive to continue runway seeing redeploy to The We them provides but us obviously relief pre-COVID

issue I plan. And second allows we The is effectively portfolio as XX% of slot the build ATC. plan the as to reduction XXXX more mentioned, us

so And definitely a will provide some that perspective. from relief cost

program. then early still structural We're way in And of stages continued X/X our the execution our fleet of modernization modernization program. We're in. in fleet our cost about the very of

that that so structural the AXXX $XXX then given XX% $XXX and million a plan, I'm unit XXXX and deliver that provides the program commitment with will compared And We've assume cost our cost value pleased the [indiscernible] day to achieved we million achieved we'll made. $XX benefit to continue meaningful a we million to progress.

the have up we whole, profitability. I to the consistent believe the back foundational right pillars to So bring business on

Unknown Executive

X JetBlue reemphasize And expand And of through think growth. York. of loyalty with continuing as margin to 'XX. X expect in products. just to move New Those incremental kind just into and point could profitable are then I 'XX points Ursula's to tailwind add we also I'll Travel you

get back efforts margin it incredibly York a pre-COVID, we strategically pre-COVID and time, of a It network back over important It's where important constrained JetBlue. progressing And our not New engine and environment. for there. think our It's was to was it it's is will part an here. nicely. and

Daniel McKenzie

second address Act Yes. guess you'd Competition question point, And if a to to XXXX. Card be if I that of I'm the willing as wondering Credit here,

would guess this so for I maybe And Robin. be

mean programs -- that particular, how that would this that the I'm We about at that what But I go And for is this Or would guess guess, JetBlue. in necessarily I are you think investors other seeing -- these if revenue CEOs point? think just that can wondering should at predict would about elaborate disappear? away. this

Robin Hayes

Yes.

come the in issue. So the to Dan. competition that -- aware MasterCard interchange merchants everyone isn't transaction. we proposal the so This process an case follow-on space the basically debit if And majority is the whether card a that card thanks I a for is saw sort Visa opposition. those have of to to continue It's lost another have face question, that either that's bring rewards interchange on travel of a And of act card, a really more or this alternative to what Americans of that into passes to be the lot Personally, side network. likely XXXX. would The think to benefit. a or consumer because this benefits

goes price passed argument would get And reductions so consumers. the that on to retailers by

I that of would there's skepticism healthy think happen. whether a level

back from the the it's option, consumers benefits get. card clear want we frankly, cash XXXX. debit cards in available go there can think I were back and of when there plenty that changes cash consumers far they X% now that if were to And saw

the for vacations, and make people other profit they cars these would accessible make rather them more And because or that keep both think a very, of very or then and than be these sides whether themselves. hear cards, I think could hotels are So they want they the to otherwise. aisle number think see significant are these will people things on of be of benefits And whether passed across constituents cash decide travel, kind I big-box for airlines if travel to it's popular. just the of popular thing Congress I it's progresses, who retailers or whether off to complaints that's keep members their this than

would of I've this skepticism got level great as whether So a pass.

Operator

JPMorgan. comes Baker with Your Jamie question next from

Jamie Baker

Mark from from card oversupply about and obviously, loyalty. been one and So remuneration talk credit is [ lots I the of your that. thinking ], partners about and But control that have all thing trim weather hair

about margins closing United, if loyalty might Joanna you earnings, know tie be think if and currently differential do points to internal just or pick back one But I loyalty we estimate So . gap. as how to of we driven? an relative and the Delta to have your talked many margin about

Unknown Executive

just of exposure, travel, products. loyalty more I the Jamie, program to our I report these you Yes. travel revenue that of to wallet right? leisure margin percentage all own on not programs but up clearly percentages us, the so of think it's that airlines sort also what digit, is. as mean, look, travel, This how and focused definitely a high, global we've sort margin JetBlue low not we if roughly more gap dividends. catch gain been assume same then know customers for their well. share of of business airlines these do so single-digit of are our build building some for creating leisure play exposure it's these And is we why do We actually on have

at point over our can So a margin. together be legacy product where JetBlue I'd point point can can a loyalty a and where get our travel goal be -- time airline for to they type program compete call to a what is our

Jamie. the really good road I we're, here making but not that's We're on, So think, we're that, progress.

Jamie Baker

going the fund the as a road, Spirit with hypothetically a a And about particularly you've loyalty means you of contingencies follow-up Do about potential? option loyalty yourself identify thinking do north so a you forward? you year talked is funding as of funding find trading to down business, greater or how loyalty Hawaiian if as are to XX%. some that, guess leverage now terms need I in and to

Unknown Executive

related addressing not to trial, to just the Jamie, today question that I the we're call. on think kick Spirit of any the following really going questions

Jamie Baker

had more fair enough. it with to do Leverage than but Spirit, Well,

Operator

comes question from Research. next Melius Your Conor with Cunningham

Conor Cunningham

is about little a Can maintenance in puts you as and bit. the it takes just structure the think to going to you 'XX, fair the up seems cost speak be bit a like

deal You some have self-help initiatives. a flight attendant also

you're the talking year-over-year XQ year-over-year. capacity it thinking how down Just 'XX. of about ] curious for track to seems just in up is being on Amex like about you're [ It starting context

curious now. how Just you're about it on thinking

Ursula Hurley

Conor. Yes. Thanks for question, the

growth next JetBlue because So to highest look targeted of and the aircraft profile single-digit then fuel. ex year That level, maybe high going delivery to rate at typically flat is different mid- CASM delays. is

We be grounded. And we're continuing plan. have GTF retirement with aircraft also that EXXX will the

And so growth different. profile look the will

we're down XXXX As working in And down assumptions. the year-over-year. our will slightly quarter, you still through be first mentioned, planning capacity

on assume will that where known where we put to ex depending capacity. -- just maintenance we we've which on be should CASM You about to pinpoint year, next always pilot fuel headwinds, up And and inflationary We fleet aging seeing. labor, the been with also given is we which year. continued next right? what pressure of in the The compared competitive obviously another just environment, have put others consistent is August have step

put program. but in reasons by where structural cost place headwinds, the those those the the really are which we So are

is cost are structural headwinds. offset so these And some meant those -- the of program to

through to capacity. next working can year fuel number once CASM So us the you ex have expect process, a planning pinpoint competitive we

Conor Cunningham

even more how X these that up points Is Is called you continuing space curious on products little versus that would the have And reason you specifically why products, you're Mint. Okay. I sequential I think hold protected environment? XQ you is The That's a helpful. from And have thought those that [ from I XQ. then XQ? discount maybe into RASM benefit deceleration to a to ask needing seeing ]. 'XX in are current -- on would are of premium Just bit. out

Joanna Geraghty

is This Yes. Great Thanks. Yes. Joanna. question.

really are into fourth continue those well trends with to continues expect the quarter. premium to pleased We we how hold up, and would

actually As from the scripted XXXXXX taking year, next seats. we're seeing in XXXs to at we retirement you mid-configuration ] look EMS [ EMS mentioned XX and seats the in as the XX remarks, all going

are very in strength So premium pleased we're the moving forward. seeing we that with the sector

Operator

Michael comes question Your Bank. Deutsche Linenberg from with next

Unknown Analyst

This is [indiscernible] Mike. on for actually

newer one. quick rather We're on but time the to and affected into GTF engine spilling and this? based do of dates this a are production And going issue? aircraft Just AXXXs which not manufacturer that can could the mid-XXXX aircraft deliveries, hearing line parts, this you between the your at mid-XXXX, about are by inspection think be be point, you confirm contaminate requirements the

Ursula Hurley

question. the for Thanks

So an us initial JetBlue's Pratt has given assessment exposure. of

we grounded So today, of by this then that next end to on will the we'll highlighted year. increase through X and the have up year, as we call navigate aircraft

digits, we'll low end next single the on ground. aircraft of year number So with high double-digit

to so on number specific the PWXXXX. in your regards So serial question,

important coming solidify view because we AXXX and service beyond. is serial be XXXX the believe that's exposure numbers it of bulletin So imminently, that's very and detailed what will a out aircraft. and in to The it our give will

the In majority regards were X,XXX, to our engines of post XXXX. manufactured the

We engines small were manufactured amount of a that have very pre-XXXX.

and And on terms what were impact part the number terms next the next built that that's aircraft in so of think us handful into have the do single-digit that end I AXXX are need replacements. AXXX digits, to to mid- by the exposure. will in of compared is We full small single are how view low going or year, a high It's referencing of PWXXXX pre-XXXX you the very year.

helps. that So hopefully,

Unknown Analyst

period spring points of over we something? or maybe saw anticipated by really X granting weekend. or that that the that the acceleration Yes. you the the capacity off-peak Was schedules cut, seeing And growth in you're That's before driven break that a this March percentage demand-driven of in helpful. past was something quarter pulled

David Clark

The XXXX QX is the by capacity constraints. question. cut aircraft is Sure. This Thanks driven Dave. availability for

the we that the delays. case the delivery And remain expect to and engines So throughout XXXX. largely,

Operator

Pfennigwerth Duane Evercore from comes question with next ISI. Your

Duane Pfennigwerth

RASM Can compare NEA many much bit over time plan a domestic that were and with X%. And XQ we does within But Can domestic Obviously, up steps maybe outcome, markets entity, in how year. you you that for relatively domestic, early into speak obviously, weaker on little able decline? NEA next the capacity a versus some can revenue the better. quarter? you'd you on X%, of acted revenue the stronger without much forced Latin taking into lead you to bit the guess, I these be about within little about down capacity changes wind-down time, your and talk you're how quantify

David Clark

Duane. that. This is Dave. I'll Thanks, Sure. take

space from transition So sort same we've clearly, a at time, seen been of basis it's third a demand I the on capacity in the demand in seen, business industry. quarter have while of of a year-over-year of out domestic most lot the of the markets environment challenging shorter-haul reallocating in in was challenges out and the have as capacity acute the been we've the Where some think, markets. of coming been some

XX% capacity below continues really capacity done then lot resilient, to revenues we've that corporate but now. Latin those reality focused rightsize to of of The been well have be there industry us, Florida extremely and new pre-COVID. other pretty below side we've there growing So for well like and a right has the in to traditionally recover still it's places the about markets. to some there. And continues

healthy. is Demand

roll out where no concerns seen we've bit, pressured absorb have I'd time. We should, focused there, making But really say, on industry a I'd which over but demand and have say, to New places a temporarily we've York the been July. for it's capacity, did sure quarter late that regards the X-point We we partial until third there -- With for first was a NEA City, about as we're the didn't the headwind. terminate quarter aligned. by

grows and the expect more have starts about quarter. points quarter, which allocate and year to It did the sales New get City next be some capacity better this we redeployments can the done biggest X of out advantage of as recently. we've we for So York take then we to impact to

Joanna Geraghty

ASM there. flying. seasonal strong some performance Dublin see trying in of flat I'll Scotland leisure terms that very advantage I the year-over-year we're also making of with moves add of you to take and think on and transatlantic. growth some RASM Also XXX%

Unknown Executive

a had X Joanna, of the all us honor having question. to answer of you Yes,

I -- that we're quickly. trying what very to is industry. mobile, very It's reallocate moves to be in it think very it easy this capacity

sometimes hot everyone up towards And being oversupplied. and and quickly ends very it moves things become then

got seeing that of trying And now about very immediate commentary. good really what waiver, that news It's redeploy we're which opportunity of know some cost to of new because of XXXX. changes think slot so front what notice, for the that. not the just than the we're is the we efficiently us sits really sort business, be pull We've that more we means to short rather considered of chessboard ]. [ latest But embedded do having and these kind about the a in is now hydecruis be an very of we sort to can order us in much do kind of for different behind have trends we the thoughtful around not

Duane Pfennigwerth

table way looks will your CapEx. $X.X just with question. year? next very deliveries, CapEx likely be total and deliveries. aircraft Does likely some And what a commitments reflect contractual footnotes roughly your the then or XXXX you kind long-winded Simple delivery It Okay. of you asking billion like my CapEx contractual a follow-up of have of for on

Ursula Hurley

what our So and we're there's contractual commitments planning. definitely a between difference

we're So [ receive XX aircraft. ] to planning

However, ballpark the we where referenced up. CapEx you end is number should

Duane Pfennigwerth

would we total billion? to your And add would what What that $X.X be?

Ursula Hurley

be higher. less that. It Actual are slightly will than commitments

Operator

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

Catherine O'Brien

more. wanted a just in I little to York bit dig New on

the this how basis about summer, pre-COVID you like possible? how profitability? impact back New do we to guess, recover. York reliability those should ability a fly I full get was do on full back relief Is that York XXXX you York recovery for operational New to getting to a margins margins think York And to term, have system Now I to -- without your advanced notice New New ] to portfolio the recovery? that York in need [ slot guess, of New upcoming longer

Joanna Geraghty

really than progression recovery. for the with think expect So example, would at we anybody that a we're York bit is JFK I New do have pleased a But JFK, you specifically It's making. hoped. look just full if slower

administrator It how an In underlying years issue with ensure something we'll got waivers, more an York sustainable. to has the air while terms is our from way. ATC, impact slot making. some that to on bring point, but fully that's is a we're greater of a little see of the that staffing, that's couple the at control to there's the that appropriately even that's And operational hope not hopeful takes staffed And now focus in thoughtful on a New in perspective. in be addressed traffic

take here. It's looking return. constrained particularly with do it we're prepared of forward seeing it, to to that 'XX, there. And we little a have a when you're probably, so that sure that's 'XX. But will the advantage to slot be, to leisure full that fully take good carrier, making But we're get New portfolio a while and call York on for pace place

Catherine O'Brien

increasing where course and aircraft between we aircraft goes official that quarter? with 'XX deliveries. the guidance. it. puts just the stay level, of watermark anything should about is high how through like think against takes the declines just Or year-end? But on down high XQ? capacity Is ground, And Okay. on getting the sounds Got high should in then for slightly over we deeper the year-over-year year-over-year It tuned first from level

Ursula Hurley

Yes.

So GTF. close due is the I just aircraft think a XX level, take ] the year. we've representation. to quarter high I put a probably to then first XX next [ retiring to and we right, grounded mean, deliveries got We're

high the single in double -- So digits mid low the to digits.

year. the throughout progresses that So

double year, with low end digits. we that start the So X end will and the of year at then this at

fair quarter that I think representation. the first is a So

are our process. working XXXX planning We through still

color we'll provide call. on So you the next obviously more

Operator

from comes Bank Didora Andrew question next with Your America. of

Andrew Didora

considering most lot Robin, What of for about looking Can are the at some making? structural moving capacity to a product know extensions hold external GTF JFK. the the of slot proactive capacity you're help you're you're profile now? to the international sense real now margin I the changes going markets markets, down is but kind your right adjustments make factors maybe what forward? So coming in of the more you you seems that just talked to on like capacity the speak call like from at

Robin Hayes

I'm going international in exposure extremely proactive we've mean have to I We couple have be we've actually strength Dave. more domestic Clearly, and we seen. made, the too it. much some of Joanna do just really But the and hand then exposure reallocating If others much back as and what think everyone in start to see been capacity. last I thoughtful we may and to bounce over to has quarters don't seen got we've starts the to could over said of we that into quickly trends see to a much domestic that's than international. commentary been then pulling have XXXX. think, around you capacity, I

do reallocating is moving and around. So things that. to of to continue kind And the team constantly we're going

compared the XXX of I XXX, the with that work that other broader think thing renewal that's some to had The set as there's considerations historically fleet on the a going and range XXX XXX. our with that markets remove well. would is

creates of served into opportunity outside sort the by markets that the leisure-focused the that XXX been sort redeploying some so of have business also more And of markets as really more of well. shorter,

of... you, I know, you Joanna Dave, So or don't I if know want sort don't to

Joanna Geraghty

I'll think core on built as mean, butter and we JetBlue got overall, what at this is network. Maybe and that front. for. the I We've leisure bread our I just point-to-point add the were you knowing look

and over also capacity markets results. a with products leisure quarter who and right external facing premium customers product the strength unbundled growing that that then next We a in the we to leisure premium these array it some And have just things well. see in these to challenging that We're product of of as more some an us as headwinds want navigate covers the product perform sector. of that basic just of our as product look JFK, you environments, through offering different that. or a sort We've and we constrained travel then year expect you like now and at ecosystem, time, this a around whether with long loyalty Newark it's very gate Boston engines perform that in these into that in markets. wrap places a being term the over with some constraints, in should more network produce And environment overlaid well got excess leisure creating with it with then nice from we

Andrew Didora

broadly across if follow-up, more Okay. more I improvement? you a I that know And it travel just network? corporate but your quantify York the improved, mentioned a and are has this, travel corporate And can then you comment? Or you seeing is quantify this of New as missed sorry

David Clark

is This Sure. Dave.

the a then summer nice since Labor if had beginning them started to since best since weeks up a months. the end. X look of softened of COVID X be travel X thing admit We'll that X appear has happened seasonal and step to you in very at, look of back booking So X you summer say, years But if sort corporate at bounces had Day. ago, it our and the past to at the over it COVID,

in over low of areas mean XXs, seen has seen sort we've nice are a like summer softness recovered, of seeing entertainment, which that strikes I media in personal also but the improvement picked the seeing we some with back some pickup sequential or here. and still terms So XX% real we're up fall.

still feel it's about we'll of So sort the good going feel just economy largely state, but how with progressing side, we're in steady grow the forward. and corporate on

Operator

comes question next Your TD Helane from Becker with Cowen.

Helane Becker

you just Ursula, think, question. competitive CASM I what have you clarifying a One is, ex So mentioned ex. I have I questions. means? competitive just X Can CASM say

Ursula Hurley

Yes.

I going think profile we're historically. than much obviously a to we have lower have growth

growth us guess expect can on that a I the rate realm. compared if historical being growth in still our we're to a plan performance building But we planning I XXXX. based competitor that at pinpoint ensure competitors' with us at a Again, is to lower you we're performance. profile, same that ex CASM competitive that for process you would so through look envision going And

Helane Becker

Okay.

clear days? are I day, On that how to that back versus just many being can come York out way those helpful. more there are about X my are talking then back. you to X that coming a aren't trips you're And out other think Actually, the a that's just slow question. trips ones parse parse corporate, is way, or like where New

David Clark

Helane.

data times be And indicating but day most we've that global sort the it we're sort a places seeing in robust we're hourly sort markets, the key market, trip day. and to still a yes, now well. when keeping rest short-haul our as counts We're the some pressure rightsizing of network trip on in of one day places couple of day the that parts hourly. the seems and every those the certainly, that's world schedule, So the been at other the seeing of and hours, of of of on we're is then

been come certainly sorts [ of to back. to experience that's sort ] our So of going the hall the

Operator

Trent question Stephen Citi. with from next Your comes

Stephen Trent

doing ease Just one And a something? or to something adding appreciate stuff flight love to your in just of just clarification could AI here. the steps out is disruptions. hear lot in a this was you that crew or if try you whether I bases and control Would but mentioned scheduling your of your taking color some little schedule, give maybe that.

Joanna Geraghty

speak Sure. that. can I Yes, to

So things. a few

do make you one, number think more I resilient. sure the how is day

that place, do or in by have You reserves whether ensuring adequate flight. you that's pilots in

And so we've done that.

and during more we we so place and in the operations smarter limit, up into I foreseeable long their we replace think the good will That's hours periods how But getting news reserves first can have do it, for is crews efficient. when to kind we're additional future, thing. that peak summer of them. protect the it's bump you about the delays so experience

so tools enable can plan day, operations better system We've the much process around a how number today, that think, these. we're AI of our think smarter gotten, introducing team about also I we and in of the

New from for lengthy have longer York one you can long fly example, be Caribbean, air delays and when So traffic that initiative control example. to to

so these want we crude by sure we're it. it you if double most the protect things, save way, doing to And so We that efficient costs. make we in double crewing may flight

building underway to hold yet, our that to better tools environment in. on about and the We're want operating crew well double in sure which making control making through we We're we day we JetBlue team the see on aircraft the to lease terms to as of cancel. making this how you decisions to through flights there challenging day by cascade crew not [ smarter in more smart operates delays double to which example, of also of make versus way and day. decisions getting decisions to we're ] when flights what flights the do but proactively understand may flights enable what we that that cascade address not on So earlier day

Robin Hayes

with And I who on are back to could really that. do that sum just if FAA, partner committed. think the got add I to look we've of a absolutely experience whole and --

We mitigating. the accomplish Whitaker away, have staffing person is lot won't job we the ]. administrator a the And a go new perfect can Mike for who whilst in [ by challenges

or continue JetBlue XX% the slot It's international include XX% done We're got be to XX% may to which carriers. going time, terrific. advocate ahead should been of should be enough -- we've waiver. not mandated. is Now is

and our FAA summer as is well. we the ways final is as decision-maker perspective. working these our the FAA issues, view. for of airlines saw went do of the as advocate sort kind this of we with And on to overall Now and the the but built can on better also Ultimately, that, performance

give I so -- And of do [ and post whole time, protecting revenue from a -- better job. on you're business kind we think more year to When ad a at [indiscernible] out team Difficulty]. nearly if Technical we his quickly, and things

really summer. priorities to So #X than summer this try to we're our better of to -- make is it's improve, operating and sure kind next going continue

Stephen Trent

up were a I of breaking I there, the gist were you you but saying. Robin, bit think got what

Unknown Executive

us? Operator, ahead. can question? we hear can you next you if -- the are to Operator, go move we we can can Operator, hear us,

Operator

that. about sorry so I'm

from comes question Chris Stathoulopoulos next Your International. Karan with

Christopher Stathoulopoulos

I'll to a question. one International. It's keep This is Susquehanna it call. been long

looking square areas with had there's travel capacity here, more destination away that and are all might a but as the that digits. comments perhaps midpiece kind of this of from untapped network made I you at instance, next go leisure-focused realize want I'm I We've some are. reallocating that double about year, you sort capacity to curious trying VFR thinking spoke into it up it leisure fit of seem as doesn't Robin, the back markets. that sort stands Ursula plan these about around kind of heard competitor to and of chessboard for is of It your to how, your those this. today So relates to for products to margin-accretive another here. where

of this wholesale fine-tuning, or we look hear kind a is thoughts geography love just sort to at on of some there would your So this...

Robin Hayes

Yes, maybe up. that going to pick Dave I'm to

David Clark

This Chris. Sure. Thanks, Dave. is

of shorter we're they updated designed earlier tiles we fits our with and service. it before, out our in win. but of of heavily some haul the ability business, more to confident experience compete increasing mentioned leisure we we programs. incentive a mix product, is It you even into feel things through As introduce goes point-to-point even reallocate very right our as more and built when loyalty we markets this JetBlue year loyalty was ancillary are JetBlue get provide It the We ago. designed XX a network, goes customer years in mind. and I like revenue. more increasing to are of our rewards holistic with which it than These the customers, serve like founded to and drive program to markets mean other our travel these lot have had our

or Florida going that We've had cities about And and focus closure win around markets. focus, we're and there'll doing Transcon, have tweaks bread we're in course, the cities. X to and butter So going announced and X with -- market. the in Caribbean we're the our X we're to markets dozen edges, leisure to fight, our win for our we've a closed months. compete hard or over around last we very going those But closed for to we and corner of be actively and going and the we're

Unknown Executive

to last get I the we through the be well of as that We Yes, industry was I is short-term -- I that is sort about think of point see historic. of trends. obviously, data Las the of what week trying point yes, markets have mean, just trying make commentary there to may -- was also lots Vegas. ahead and It's kind think far

put to becomes of there's now stronger forma get gain. capacity And so a so pro Vegas, out Vegas much

the aligned what's front more on next constraints get the do we're things -- what I year. delays more that's to because to we that capacity is not all delivery is of issues margin into as we have. saying going And the to focused think that are and So but with news the to need we trying strategy going to follow and and to drive 'XX be our to what us, respond recovery. think we're engine But be for message of thoughtful be I'm in closely through just

And so flying those make we we're margin to given markets constraints. accretive want sure the most

Operator

at There questions proceed. are no further Please this time.

Unknown Executive

that quarter conference Thank you. And our third call. concludes XXXX

JetBlue Airways (JBLU) 31 Oct 232023 Q3 Earnings call transcript