JetBlue Airways Corporation

Good morning. My name is Rob. I would like to welcome everyone to the JetBlue Airways first quarter 2025 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 Director of Investor Relations, Kush Patel. Please go ahead, sir.

Thanks, Rob. Good morning, everyone, and thanks for joining us for our first quarter 2025 earnings call. This morning, we issued our earnings release and a presentation that we will reference during this call. All of those documents are available on our website at investor.chemblue.com and on the SEC's website at www.scc.gov. In New York, to discuss our results are Joanna Garrity, our Chief Executive Officer, Marty St. George, our President, and Ursula Hurley, our Chief Financial Officer. During today's call, we'll make forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding our second quarter and full year 2025 financial outlook and our future results of operations and financial position, including long-term financial targets, industry and market trends, expectations with respect to tailwinds and headwinds, our ability to achieve operational and financial targets, our business strategy, and plans for future operations, and the associated impacts on our business. All such forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in these statements please refer to our most recent earnings release as well as our 2024 10k and other filings for a more detailed discussion of risks and uncertainties that can cause actual results to differ materially from those contained in our forward-looking statements the statements made during this call are made only as of the date of this call and other than as may be required by law we undertake no obligation to update this information investors should not be we may discuss certain non-GAAP financial measures. For an explanation of these non-GAAP measures and reconciliation of corresponding GAAP measures, please refer to our earnings release, a copy of which is available on our website and on sec.gov. And now I'd like to turn the call over to Joanna Garrity, JetBlue's CTO.

Good morning, and thank you for joining JetBlue's first quarter 2025 earnings call. During the first quarter, we continued to make progress on JetForward, ran a strong operation, and efficiently managed costs. We've remained focused on controlling what we can and executing on our long-term strategy while managing the challenges of an uncertain economic backdrop and weakened consumer sentiment. When we guided the first quarter back in January, we saw early indications of softening demand, which was incorporated into our RASM guidance at the time. I'm pleased that RASM for the quarter met our initial guidance. We also finished the quarter at the low end of our initial capacity range and firmly beat the midpoint of our PASMAX fuel guidance. building on our consistent track record of executing on costs. The relatively strong booking trends we saw throughout January deteriorated into February and worsened further in March. As we look to the second half of the year, the outlook remains unpredictable, and given the macroeconomic uncertainty, we are not reaffirming our full-year guidance. We plan to provide a more meaningful update on our full-year expectations later in the year when we have better visibility. We are leaning into our experience successfully navigating the 2008 financial crisis and the COVID-19 pandemic to inform our immediate path ahead and take decisive action. Additionally, we are fully committed to executing our long-term strategy, Jet Forward, to drive necessary long-term transformational change to our business. And we are confident that this is the right plan. In the first quarter, we saw several proof points that Jet Forward is working. Turning to page four of the earnings presentation, Our efforts to deliver reliable and caring service have led to consistent year-over-year improvements in A14 over the last three quarters. In the first quarter of 2025, A14 was nearly four points better year-over-year, despite significant weather events across our network. We're proud to have entered 2025 with industry-leading net promoter score performance. And for the first quarter, NPS improved double digits year-over-year, marking the fourth consecutive quarter of year-over-year growth. NPS is a strong indicator of customer retention and brand loyalty, which will be important as we navigate through the uncertainty. Encouragingly, we are seeing reassuring signs that the premium segment is holding up better in the current environment, which supports the evolution of our product offering as part of JetForward. Initiatives under our products and perks priority move are advancing nicely, and Marty will go into greater detail on their progress. We've also seen early indications that our network changes are working in the Northeast, particularly in markets where JetBlue already holds significant relevance. Lastly, we continue to make progress on our cost transformation program, and we expect savings to ramp during the second half of the year. While our strategy did contemplate a stable economic backdrop, the current macro environment does not change our ultimate goal, break even operating profitability and eventually a return to sustained profitability. which remain our North Star. As a reminder, Jet Forward is a multi-year plan, and as we continue to make progress, we are also acting expeditiously to manage near-term uncertainty. We were the first carrier to make meaningful capacity adjustments in response to changes in the environment, pulling 2.5 points of trough capacity from March and making early changes to April. Since then, we've executed similar reductions across the second quarter. and we'll continue to make adjustments to better match supply with demand throughout 2025. Simultaneously, we continue to evaluate all opportunities to reduce costs and return our focus to our core business. This includes efforts to limit discretionary spending and to reduce non-essential hiring. Additionally, in a lower capacity environment, we also expect savings on maintenance. As we meaningfully adjust capacity to address economic conditions We are committed to pulling all levers available to mitigate potential upward pressure on unit costs. The actions we are taking are intended to support our business amidst the current macro backdrop and build resiliency against a prolonged economic slowdown. In that scenario, the capital structure decisions we've made over the last 16 months have resulted in a more durable liquidity position to support the near-term demands of our business. Remember that in August of 2024, we raised over $3 billion of strategic financing, primarily backed by our loyalty program. As a result, our total liquidity at the end of 2024, excluding our $600 million revolver, was $3.9 billion, representing 42% of our trailing 12-month revenue, the strongest liquidity ratio in the industry. Last year, we also made the decision to defer $3 billion worth of CapEx, pushing out A321 neo-deliveries to the 2030s as we focus on returning to profitability and generating free cash flow again. In addition to a durable liquidity position and a manageable horizon of spend commitments, we hold a healthy unencumbered asset base of more than $5 billion. This provides us with the financial flexibility and liquidity to weather a broad spectrum of economic outcomes. I'm confident we have the right long-term strategic plans. and we are taking the appropriate steps to navigate what is ahead and position JetBlue to deliver long-term value for our shareholders. And to our crew members, thank you. Thank you for continuing to deliver a safe and reliable operation over the quarter. The improvements in our customer satisfaction scores are a direct testament to the reliable and caring service you continue to provide. Over to Marty for an update on revenue trends and our outlook.