JetBlue Airways Corporation

Morning, everyone. My name is Jillian. I would like to welcome everyone to the JetBlue Airways third quarter 2026 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, Koosh Patel. Please go ahead, sir.

Thanks, Jillian. Good morning, everyone, and thank you for joining us for our third quarter 2026 earnings call. Yesterday, we issued our earnings release and a presentation that we'll 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.sec.gov. In New York, to discuss our results are Joanna Geraghty, 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 about our outlook, strategy, and future performance. These statements are based on our current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release and SEC filings for information about risk factors that could cause those differences. These statements speak only as of today and we undertake no obligation to update them. We may also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable gap measures are included in our earnings materials and are available on our investor relations website. And now I'd like to turn the call over to Joanna Geraghty, JetBlue CEO.

Thank you, Koosh. Good morning, everyone, and thank you for joining us today. I want to start by reinforcing the bigger picture and the progress that we are making. Despite significant fuel headwinds and a challenging summer operation, our revenue performance is among the strongest in the industry. with unit revenue of 18.4% in the third quarter and further acceleration expected in the fourth. Customer demand remains resilient and we are seeing jet forward benefits compounding with some of our largest opportunities still ahead. Importantly, we are already expanding margins year over year despite elevated fuel prices. We remain focused on operating profitability in 2027 and see multiple paths to at least $1 in earnings per share and positive free cash flow in 2028. Importantly, our liquidity and financing flexibility provide an important bridge as these benefits build. The fuel challenges the industry faces are real, but so is our progress. JetBlue has a strong brand, a high value network, customers who are loyal to our differentiated offering, great crew members and a clear strategy to achieve sustained profitability. We are confident in our plan and focused on delivering the results that this airline is capable of achieving. Turning to the third quarter, I'm very encouraged by the strength we saw in the underlying business this quarter. Revenue materially exceeded our initial expectations and strengthened as the quarter progressed, with momentum continuing into the fourth quarter. For me, two highlights stand out from the quarter. First, demand remained resilient even as industry fares moved higher in response to elevated jet fuel costs. This revenue strength helped us recapture higher fuel faster than initially expected, and we achieved 87% recapture in the third quarter versus our initial expectation of 70 to 80%. Second, Fort Lauderdale continues to demonstrate the strength of our network strategy, delivering strong unit revenue performance even as we significantly expanded our operation. At the same time, the quarter was impacted by an unusually challenging summer operating environment. Severe weather and air traffic control constraints across our core northeast geographies reduced our completed capacity and increased our disruption and crew costs. Through it all, our crew members worked tirelessly to care for our customers and recover our operation. And I want to thank them for their tremendous dedication throughout such a demanding summer. Even with elevated fuel prices and the air traffic control pressures we faced this summer, we still expect to deliver year-over-year adjusted operating margin expansion over the second half of this year. We saw modest margin expansion in the third quarter and expect one to two points of further growth in the fourth quarter, even with fuel up 85%. We know there is still work ahead, particularly given elevated fuel prices and macroeconomic uncertainty. but our third quarter performance provides further evidence that JetForward is delivering results. We've now delivered four consecutive quarters of improving year over year RASM growth and are among the industry leaders for second half revenue expansion. We remain on track to achieve our 2026 JetForward targets with several important initiatives continuing to build into 2027 and beyond. And we are already seeing that execution translate into results in Fort Lauderdale. We expect our seat share to reach approximately 37% in the fourth quarter, up 14 points year over year, reflecting the scale that we are building as our operation expands. We're also deepening our engagement with local customers and co-brand acquisitions in Broward County increased 55% year over year in the third quarter. These actions are driving strong RASM growth in Fort Lauderdale and illustrate the early success of our strategic capacity growth. Blue First is yet another important driver of our growth and is our largest jet forward initiative. Seats are now on sale and we look forward to welcoming our first customers in early December. We're excited to offer customers a domestic first class experience at an accessible price point. At Runway, we expect Blue First to deliver nearly five points of Rasm improvement with its revenue and margin contributions building through 2028 and beyond. Turning to our financial position. We ended the quarter with $2.2 billion in liquidity and approximately $7 billion in unencumbered assets, including $2.8 billion in aircraft and engines. Together, these resources provide substantial financial flexibility and an important bridge as we execute JET Forward and move toward a stronger earnings and cash flow profile. The progress that we are seeing across our business is real. Our revenue initiatives are delivering, We are beginning to expand margins year over year and the benefits of JetForward are compounding as existing initiatives mature and new ones come online. With the financial resources to support our plan, our focus is on building on that momentum to achieve sustained operating profitability in 2027 and achieve positive free cash flow and at least $1 of earnings per share in 2028. Let me be clear, that is where our attention is and that is how we intend to create long-term value for our shareholders. With that, I will turn it over to Marty.