JetBlue Airways Corporation

Good morning. My name is Mel, and I would like to welcome everyone to the JetBlue Airways' fourth 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 now like to turn the call over to JetBlue's VP of Investors Relations, David Finson. Please go ahead.

Thanks, Mel. Good morning, everyone, and thanks for joining us for our fourth quarter 2020 earnings call. This morning we issued our earnings release, our investor update, and a presentation we'll reference during this call. All 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 the 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 tables 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's CEO.

Thank you, Dave. Good morning, everyone. I hope you're doing okay. As we've done in previous earnings calls since the pandemic began, I would like to pause and remember a lost crew member. One of the 10 we have now lost to COVID-19. Garrett Gant was part of our ground operations team at JFK since 2005 and his teammates will remember him for his kindness, his passion and warmth and his willingness to always go above and beyond. Our thoughts go out to Garrett's family and friends, to all of our crew members that knew him and also everyone so impacted by this pandemic. Now I'd like to recognize our 20,000 crew members for their unwavering commitment to serve our customers. 2020 was a year like no other. And as the COVID-19 pandemic challenged our industry in ways we have never seen before, our crew members rose to the occasion and delivered on our mission to inspire humanity. The very foundation of our business model, our culture, our passion, our customer service, and our focus on safety continue to guide us as we march towards recovery. At JetBlue, we have been investing in our culture for over 20 years, and our longstanding commitment to empowering our crew members is now more important than ever. As a service company, the pandemic and crisis of social justice have underscored our role in reducing biases that have existed for too long. We're starting 2021 with a reinvigorated diversity, equity, and inclusion plan, Our commitment is to better embed DEI into the fabric of JetBlue and to continue our minority and female representation in officer and director ranks. Continue to increase our minority and female representation in officer and director ranks between now and the end of 2025. We're also reinforcing our commitment to invest in our crew members and improve their access to development opportunities. Lastly, we intend to better reflect the diverse communities and cultures we serve in all areas of JetBlue. We believe JetBlue will continue to set the standard in our industry with our comprehensive ESG strategy and we were the first airline with SASB reporting. Our commitment to the environment is to reduce emissions across our business as we respond to the changing expectations of our customers, crew members and owners. Today we are the only U.S. airline that has achieved carbon neutrality for all domestic flights. We also intend to achieve net zero carbon emissions across all our operations by the end of 2040 at the latest. Our plan is to accomplish these goals through fuel-efficient aircraft, expanding our use of sustainable aviation fuels, and purchasing carbon offsets. Later this year, we plan to publish our annual ESG report detailing new initiatives, strategies, and disclosures, and we'll continue our conversations with all our stakeholders. I'm proud that while we are in the middle of a pandemic, our team continues to prioritize our work on ESG. Now let's move to slide four of our presentation. In the fourth quarter, we reported an adjusted loss per share of $1.53. Despite the financial results, I'm proud of what our crew members have accomplished in this extraordinary year. And I could not be more confident about our future. Our team has not only managed through the ongoing demand challenges, but also has made important progress on strategic initiatives, including revenue capacity and cost actions. Through this work, we believe we will emerge as a stronger JetBlue. Moving to slide five, we continue on our path to recovery. which consists of three steps. First, reducing our cash burn. Second, rebuilding our margins. And third, repairing our balance sheet. As we moved through 2020 and meaningfully reduced our cash burn, we are now starting to shift our focus to rebuilding our margins. We remain cautiously optimistic that demand trends will improve later this year. More importantly, this crisis has made us a more agile, creative, and resilient airline. and we believe our initiatives will allow us to emerge with structurally better margins. Let's start with our network plan. We have taken aggressive actions to protect cash and remain relevant in our focus cities and announced over 80 new markets while accelerating our expansion in historically constrained markets such as Newark and LAX. We are thrilled to incorporate new aircraft into our fleet that will support our network plans. This year, we are bringing in the game-changing A220 and its fantastic economics. We'll also fly the low-density A321neo and the A321LR, both of which include our incredibly exciting new mint product, which will carry forward our success in disrupting and reimagining premium travel at significantly lower fares. We're so excited to shortly launch our landmark Northeast alliance with American Airlines. This is a truly innovative partnership between two independent airlines. Through our different business models, we expect to expand flying in highly constrained markets and bring more low fares to more customers. We plan to offer new and increased flight options, improved schedules, better connections, and more competitive fares. Our customers will have access to more domestic and international destinations and an improved frequent flyer program. For JetBlue, this alliance will help us recover more quickly while also protecting jobs. Beyond fleet and network, we plan to continue to enhance our digital experience and develop our JetBlue travel products offering. Last year, we relaunched JetBlue Vacations, bringing innovative new benefits to vacation packages such as personalized service in destination, travel perks, payment flexibility, and a best price guarantee. We also enhanced our travel insurance products We are now working to scale up a platform to help our customers easily add products to their travel plans with JetBlue. The initial results are encouraging, and we believe that as leisure traffic returns, we will see attach rates improving compared to our pre-COVID rates. Lastly, we remain committed to keeping our costs low and ensuring that our efforts across JetBlue translate into better margins and higher earnings. We continue to find meaningful opportunities in both our fixed and variable cost structures, which reinforces our low-cost, low-fare leisure model. Steve will provide more detail on our 2021 cost plan and how this adds to the cost savings we achieve through our structural cost program. Of course, all these efforts would not be possible without our incredible crew members. I want to thank them for their personal sacrifice as this crisis has impacted their lives. with reduced hours and reduced paychecks. And on behalf of all of our crew members, I want to thank our government leaders, particularly at the US Treasury, for their continued and vital support for our industry, which has helped save many jobs. We are, as we all know, navigating the most challenging times in our history, but we are starting to see light at the end of the tunnel. Our team will continue to do everything we can to protect the future of JetBlue, protect our crew members, and emerge as a stronger airline. Joanna, over to you.