JetBlue Airways Corporation

Good morning, my name is krista and I would like to welcome everyone to the jet blue airways fourth 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 jet blues director of investor relations kush patel please go ahead, Sir.

Thanks krista. Good morning everyone and thanks for joining us for our fourth 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.jetblue.com and on the SEC's website at www.srcc.gov. In New York to discuss our results, our Chief Executive Officer, Marty St. George, our President, and Ursula Hurley, our Chief Financial Officer. During today's call, forward looking statements within the meaning of the safe harbor provisions of the Private Securities Legation Reform Act of 1995. Such forward looking statements include without limitation statements regarding our first quarter and full year 2026 financial outlook and 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 potential targets, our business strategy, 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 the 2024 10-K and other filings for a more detailed discussion of the risks and uncertainties that could cause actual results to materialize. The statements made during this call are made only as of the date of this call. Other than as may be required by law, we have taken no obligation to update this information. Investors should not place undue reliance on these four statements. Also, during the course of this call, we may discuss certain and get financial measures. And now I'd like to turn the call over to Joanna Carity, our JetBlue CEO.

Kush, I'll get you some water. Thank you. Okay, good morning, and thank you for joining JetBlue's fourth quarter and full year 2025 earnings call. I want to thank our crew members for their continued dedication to running a safe operation, especially during winter storm firm. We've canceled over 1,100 flights as a result of the storm, and the industry remains in recovery mode. While today's forward-looking guidance excludes the storm's impact, given January is typically a trough period for us, we don't currently expect the impact to be material to achieving our full-year earnings guidance. Before we get to 2026, let's take a look back at 2025. In the first full calendar year of our Jet Forward transformation, I am very proud of what we've accomplished. In the face of a government shutdown, macro uncertainty and related groundings disproportionately impacting JetBlue, we stayed focused and continued to work toward our goals. Operational performance has been a key proof point of our strategic transformation. In 2025, we beat all of our on-time performance targets, improved every one of these metrics versus the prior year, and narrowed the gap relative to others. What makes this even more significant is that it follows an equally strong 2024 when we also beat all of our on-time performance targets. Two consecutive years of reliability improvements are a direct result of Jet Forward Investments' smarter planning, disciplined execution, and our team's daily focus on doing the basics well, all in the most challenging airspace in the world. Our customers are recognizing these meaningful reliability improvements. I want to emphasize this. In 2025, we achieved an eight-point gain in Net Promoter Score and a 17-point gain since the beginning of 2024 and the launch of JetForward, making us once again a leader in customer satisfaction. This improved experience is driving loyalty and in turn has increased the rate at which customers return to fly JetBlue. The progress we've made on delivering reliable and caring service not only increases customer satisfaction, It also sets a solid foundation to enable the success of our other priority moves. Our products and perks are increasingly capturing more premium revenue, following the enhancement of even more than continued outperformance of preferred seating, the release of our premium credit card, which far exceeded sign-up targets last year, and the opening of our first-ever lounge at JFK. And not to forget, we won the J.D. Power Award for the best business class product last year. Our network changes continued to progress well, even as we capitalized on near-term strategic opportunities in Fort Lauderdale, where customer response to our close-in schedule additions has greatly exceeded our expectations. Underlying it all, we maintained a tight hold on costs in the face of meaningful capacity reductions. Taken together, these jet-forward initiatives delivered $305 million of incremental EBIT, slightly better than our initial expectations. This outcome gives me great confidence that JetForward continues to be the right plan. Macro uncertainty pressured industry demand last year and impacted results versus our initial full year operating margin guidance of 0 to 1%. As previously shared, we estimate this uncertainty represented more than four points of headwind to operating margin for the year, impeding our path to restoring operating profitability in 2025. and resulting in an adjusted operating margin of negative 3.7%. Looking ahead to 26, we are focused on turning the progress from our JetForward initiative into improved profitability. At a high level, our full year guidance is based upon 3.5 points of capacity growth, 3.5 points of unit revenue improvement, and 2% non-fuel unit cost growth, all contributing to our forecast of break-even operating margin or better. guidance assumes the macro environment continues to provide a constructive baseline for demand any incremental recovery in gdp or reduction in fuel prices beyond consensus estimates represents potential upside as 2026 progresses critically we expect to deliver 310 million of incremental ebit from jet forward this year for a total of 615 million in 2026. this keeps us on track to deliver 850 to 950 million of total incremental ebit for the full year 2027. The incremental EBIT growth in 2026 is driven by the continued ramp of our existing initiatives and the launch of several exciting new initiatives, including rolling out the remaining key components of our Blue Sky collaboration with United, the opening of our Boston Lounge, and the launch of our domestic first-class product. Though it has already been a dynamic start to the year with the temporary closure of a portion of Caribbean airspace, and Winter Storm Fern, our focus remains on controlling what we can and translating these efforts into several points of operating margin improvements in 2026. With that, I will turn it over to Marty.