JetBlue Airways Corporation

Good morning. My name is Krista, and I would like to welcome everyone to the JetBlue 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 JetBlue's Director of Investor Relations, Kush Patel. Please go ahead, sir.

Thanks, Krista. Good morning, everyone, and thanks for joining us for our first quarter 2026 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.jefflew.com and on the SEC's website at www.sec.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 will make forward-looking statements about our outlook, strategy, and future performance. These statements are based on our current expectations and are subject to risks and uncertainties that can cause actual results to differ materially. Please refer to our earnings release and SEC filings for information about our factors that cause those differences. We may also discuss certain applicable measures, reconciliations to the most directly, comparable gap measures are included in our earnings materials and on our website. And now I'd like to turn the call over to Joanna Garrett, JetBlue's CEO.

Thank you, Kush. Good morning and thank you for joining JetBlue's first quarter 2026 earnings call. I want to begin by thanking our crew members for their continued dedication during what has been another challenging start to the year. And I also want to recognize the TSA agents for their commitment during this shutdown. This first quarter included multiple winter storms and TSA disruptions, but through it all, we are grateful our teams remain focused on delivering a safe and reliable service for our customers. The conflict in the Middle East and its impact on fuel prices is the most significant headwind we've faced as an industry since COVID. Given the sharp increase in the price of fuel and the expectation for elevated prices throughout this year, we are suspending our prior full-year guidance. as we aggressively adjust to the evolving macro backdrop. I want to be clear. Suspending our full-year guidance reflects external factors alone and not a change in the strong progress of JetForward. We have taken immediate action to offset fuel costs with our ultimate focus on minimizing the financial impact and preserving our liquidity position. The three primary levers available to us are adjusting fares to better align with input costs, moderating unproductive capacity, and pursuing additional cost savings opportunities. We recognize that customers expect strong value from JetBlue, and we're continuing to carefully balance our path to restoring profitability with meeting those expectations. Importantly, demand remains strong. This backdrop allows us to recover some of the increase in fuel costs, and as such, we've adjusted fares along with the industry over the last two months. Bookings have remained resilient amidst these changes, which is an encouraging sign. However, the first quarter was already over 90% booked before fuel prices suddenly spiked, reducing the opportunity to immediately recapture the impact of this significant fuel increase. We expect 30 to 40% fuel recapture in the second quarter and plan to achieve 100% recapture by early 2027. Given the broader cost environment, we've also made targeted updates to ancillary fees, such as check bags. This allows us to better cover costs while keeping our base fares competitive. We will continue looking for additional ways to strengthen revenue performance throughout the rest of the year. At the same time, we are aggressively reducing capacity, targeting adjustments in off-peak and shoulder periods. We've acted quickly, reducing capacity by nearly one point versus close-in expectations in the second quarter, with plans to reduce the second half by at least two to three points. While we are able to reduce capacity closer in, as we've done, these decisions are more beneficial when made at least 60 days in advance to take even greater advantage of cost savings opportunities. And with demand continuing to remain strong, it's important we take a flexible approach to trimming capacity as we head into the peak summer season. We plan to closely monitor market conditions and expect to reduce additional capacity after the summer peak, assuming fuel prices remain elevated. In addition to managing capacity, we have opportunities to reduce other expenses and better align our cost profile with capacity. This includes efforts to reduce controllable spending and hiring, and in a lower capacity environment, we also expect savings on maintenance and other variable costs such as landing fees. As we meaningfully adjust capacity to address higher fuel, we are committed to pulling all levers available to mitigate potential upward pressure on unit costs. Alongside these efforts, we believe Jet Forward remains the right strategy to navigate us forward. Across each of our priority moves, reliable and caring service, best East Coast leisure networks, products and perks customers value, and a secure financial future, we are seeing clear evidence that our strategy is working and we remain on track to drive 310 million of incremental jet forward EBIT in 2026 and 850 to 950 million in 2027. And as a reminder, we have transformational initiatives launching this year, including domestic first class, the continued implementation of our blue sky collaboration and our second blue house, which are expected to drive significant value for years to come. In closing, Demand remains intact. Our jet-forward initiatives are performing, and we are actively managing levers within our control. I remain confident we have the right strategy and the right team to navigate yet another challenging year for the sector, even in the face of these macro factors. As we gain greater visibility into fuel and its impact on the macro environment, we will plan to provide an updated view on full-year expectations. I'll now turn it over to Marty.