JetBlue Airways Corporation

Good morning. My name is Mary. I would like to welcome everyone to the JetBlue Airways' third quarter 2020 earnings conference call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. I would like to turn the call over to JetBlue's Vice President of Investor Relations, David Simpson. Please go ahead.

Thanks, Mary. Good morning, everyone, and thanks for joining us for our third quarter 2020 earnings call. This morning we issued our earnings release, our investor update, and a presentation that we'll reference during this call. All of those documents are available on our website at investor.jetblue.com and have been filed with the SEC. Joining me here in New York to discuss our results are Robin Hayes, our Chief Executive Officer, Joanna Geraghty, our President and Chief Operating Officer, and Steve Priest, our Chief Financial Officer. Also joining us for Q&A are Scott Lawrence, Head of Revenue and Planning, and Dave Clark, VP of Sales and Revenue Management. This morning's call includes forward-looking statements about future events. Actual results may differ materially from those expressed in forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For additional information concerning factors that could cause results to differ from the forward-looking statements, please refer to our press release, 10Q, and other reports filed with the SEC. Also, during the course of our call, we may discuss several non-GAAP financial measures. For reconciliation of these non-GAAP measures to GAAP measures, please refer to the table at the end of our earnings release, a copy of which is available on our website. And now I'd like to turn the call over to Robin Hayes, JetBlue CEO.

Thanks Dave. Good morning everyone and thank you for joining us. I'd like to start with my thanks to our crew members for their dedication to our customers. I also want to thank our crew members for their sacrifice during the most difficult period in our 20-year history. We are now over seven months into the pandemic and day in and day out our crew members deliver on our mission to inspire humanity. Their dedication and passion for delivering outstanding service has been truly remarkable, especially as we work to restore our customers' confidence in air travel. We have responded to this unprecedented crisis with action, leading the industry with health and safety protocols to keep our crew members and customers safe. We're grateful to all of our teams for bringing our industry-leading Safety from the Ground Up program to life every day. Our customers are recognizing their efforts and we are seeing record high customer satisfaction scores as a result of their professionalism and care. Let's turn to slide four of our presentation. In the third quarter, we reported an adjusted loss of $1.75 per share. Despite the ongoing demand challenges, we have worked to stabilize and protect JetBlue. Our efforts to raise liquidity, reshape our network, and reduce our costs are bearing fruit and have helped us navigate the immediate crisis. We remain cautiously optimistic that we will see further steady improvement in bookings into the upcoming holiday season. We have seen signs of pent-up demand from customers who want to visit their family and friends or go on vacation, and we believe that we will remain extremely well positioned to serve these customers as they return to air travel. Moving now to slide five. We are confident that our low cost, low fare leisure model with the best crew members in the industry and the brand that customers trust will all help JetBlue to emerge stronger from the crisis. Since March, we have been focused on a three step recovery process. We have made great strides in reducing our cash burn. We continue to manage our daily flying and take tactical actions to ensure we generate cash as demand recovers. Secondly, to rebuild our margins, we are executing on revenue and cost initiatives. Our margins today reflect the challenging revenue environment and in the near term, we are redeploying our aircraft to new cash-accreted markets where we see demand. Further out, we are setting JetBlue up for a strong rebound, taking advantage of opportunities in our network and strengthening our focus cities to produce structurally better margins in the coming years. Starting in the Northeast, we are building a strategic partnership with American Airlines. We believe this alliance, which is currently under regulatory review, will help accelerate our recovery, preserve jobs, and allow us to continue our 20-year track record of disrupting the markets. with low fares and great service. I'd like to pause for a moment and highlight that while we are grateful to Washington for helping to save our industry in the spring, JetBlue made a clear choice this past summer to accelerate the speed of our recovery from the crisis when we announced our exciting New York and Boston partnership with American. We've been working tirelessly with both DOT and DOJ and want to thank the leadership teams of each agency for their team's serious attention to reviewing our proposal. Getting this partnership off the ground quickly is critical to our self-help effort to expand low fares in New York and Boston and get us on the road to a faster recovery and job growth. In other parts of our network, we are positioning JetBlue for future success at LAX and Newark, making our TransCon franchise stronger. In Fort Lauderdale, we are adding connectivity to enhance our position in South Florida and in the Latin and Caribbean regions. We are looking forward to repicking our JetBlue travel product subsidiary. As demand recovers, we believe it will give us a competitive advantage in providing a unique value offering to leisure travelers. We're looking for a trusted brand that offers flexibility and a personalized experience. On the cost side, our teams are working to realign JetBlue's cost structure to a temporarily smaller revenue base. Steve will provide some early details about our efforts that we believe will help us remain true to our low-cost roots as we recover from the crisis. Finally, in terms of balance sheet, we have successfully raised more than $4 billion since March, and we have access to further capital should we need it. Naturally, we aim to be free cash flow positive with the goal of repairing our balance sheet over the coming years. Of course, the timing will largely be a result of executing on our cost initiatives and the pace of demand returning. As we look forward to the expected recovery, we continue to work with our elected leaders to help find the best public policies and technologies that will support a safe return to travel. Rapid testing, we believe, can help reopen domestic and international markets and be a critical step in balancing public health considerations while promoting an economic recovery. The landscape continues to evolve and we are cautiously optimistic that we will see major advancements in this space in the near future. Before closing, and on behalf of all of our crew members, I would like to take a moment to thank the federal government and their advisors for their continued support. The CARES Act Payroll Support and Loan Program has helped save many jobs at JetBlue and across the country. The reality is that we are still navigating this unprecedented crisis and we expect demand to remain depressed for some time. We're optimistic that the leaders of our country will soon find a path to provide additional support for jobs in our industry, giving us vital time to execute our recovery plan. Thanks again to our amazing and inspiring crew members who, despite the current hardships, continue to show their dedication to safely serving our customers and taking care of each other. Joanna, over to you.