Key Financial Results
- Q1 RASM: +6.5% YoY (in line with revised guidance, beat initial midpoint by 4.5 points)
- CASM-ex: +6.6% (4 points due to operational disruptions; 2.5% adjusted)
- Q1 Fuel Price: $2.96/gallon (26% higher than initial guidance midpoint)
- Liquidity: $2.4 billion (26% of trailing 12-month revenue, above 17%-20% target)
- Unencumbered Assets: Over $6 billion (25% in tangible collateral)

Suspended Full Year Guidance
Management suspended full year guidance due to fuel volatility, emphasizing this reflects external factors only, not JetForward strategy performance. Immediate actions taken:
1. Fare adjustments to align with input costs
2. Capacity reductions (off-peak/shoulder periods)
3. Additional cost savings opportunities

Fuel Crisis Response

Fuel Recovery Timeline:
- Q2: 30%-40% fuel cost recapture expected
- Target: 100% recapture by early 2027
- Q1 already 90% booked before fuel spike (limited immediate recapture opportunity)

Q2 Guidance:
- RASM: +7% to +11% YoY
- Capacity: +1.5% to +4.5%
- Fuel price: $4.13-$4.28/gallon (midpoint 75% higher YoY)
- CASM-ex: +3% to +5%
- Easter shift represents 1.5-point RASM headwind

Capacity Adjustments:
- Q2: Reduced nearly 1 point versus close-in expectations
- Second half: At least 2-3 points reduction planned
- Focus on off-peak days/times (red-eyes, Tuesdays/Wednesdays)
- Benefits greater when made 60+ days in advance for cost savings
- Additional cuts expected after summer peak if fuel remains elevated

Strategic Performance & JetForward Progress

Revenue Highlights:
- Premium RASM outperformed core by 9 points in Q1
- Core demand now strongly positive YoY (improved from 2025)
- Domestic RASM outperformed international
- Caribbean airspace closure + winter storms reduced capacity by ~4 points (benefited RASM by 2 points)
- Remaining 2.5-point beat reflects demand strength and JetForward effectiveness

Loyalty Program – Historic Quarter:
- Cash remuneration: +19% YoY
- Card spend: Double-digit growth
- Card acquisitions: +45%
- All-time highs for TrueBlue active members and attach rates
- New feature: Points for ancillary purchases (strong start)
- Family Tiles launched (industry first – parents earn status faster when traveling with children)

BlueHouse Success:
- JFK lounge: NPS well above expectations
- Premium credit card sign-ups exceeding initial targets
- Boston lounge opening later summer (further premium growth catalyst)

Fort Lauderdale Focus City:
- Q1 RASM growth: +5% on 23% capacity growth
- Now JetBlue’s #1 carrier in Fort Lauderdale (larger than pre-COVID)
- Added Cleveland destination + 9 route frequency increases (March announcement)
- 21 new city destinations launched over past year
- 4 connecting banks this summer (up from 2) – improved Caribbean/Latin America connectivity
- Comprises all Q2 capacity growth
- Target: Grow to Boston size over time

Blue Sky Collaboration Milestones:
- Launched interline flight sales with United (Q1)
- Reciprocal loyalty benefits (Mosaic/MileagePlus) expected to activate Q2
- Rental car sales through Paisly platform launching
- Early results encouraging; already seeing expected booking patterns (LA-NY, SFO-NY, SFO-Boston, DCA routes)
- United content integrating into Paisly: JetBlue Vacations packages with United air now available
- Rental cars launching very soon, hotels early Q3
- In RFP process with one additional partner (non-United)
- Goal: Prevent customers from choosing competitors by offering global connectivity

Product & Fleet

Domestic First Class:
- Launching second half 2026
- Currently in certification process
- Not yet available for sale
- Expected to drive significant value for years

Fleet Updates:
- 12 aircraft deliveries expected in 2026 (down from 14)
- A220 delivery timing slightly shifted
- CapEx: ~$800M in 2026 (below $1B annually through end of decade)
- Q1 CapEx: $141M ($59M lower than guidance due to delivery timing)
- Q2 CapEx: ~$275M expected
- 30% of Q2 capacity powered by fuel-efficient new engine technology (5% efficiency improvement over 3 years)

Cost Management

Near-Term Actions:
- Reducing OpEx and CapEx spend
- Slowing hiring in some work groups
- Targeting variable cost savings (maintenance, landing fees)
- Ancillary fee increases (checked bags)

JetForward Structural Cost Initiatives:
- New technology/AI for crew and operation planning
- Sourcing center of excellence for contract spend optimization
- Efficient in-sourcing/outsourcing opportunities
- Fleet simplification (E190 exit complete)

Cost Outlook:
- Second half CASM-ex growth: Over 2 points less than first half
- Historical relationship between capacity and CASM-ex continues: Roughly flat CASM-ex on mid-to-high single-digit capacity growth

Balance Sheet & Liquidity

Recent Actions:
- Raised $500M secured by aircraft (with $250M accordion feature for total $750M)
- Likely to draw accordion given fuel magnitude
- Repaid $325M of 2021 convertible notes
- Q1 free cash flow positive

Capital Priorities:
1. Maintain strong liquidity (17%-20% target)
2. Ensure JetForward has runway to perform
3. Eventual deleveraging once profitability restored

Financing Flexibility:
- $600M undrawn revolving credit facility (excluded from liquidity calculation)
- $6B unencumbered assets: ~30% tangible aircraft/engines, plus slots/gates/routes, brand, incremental loyalty
- 12 new aircraft deliveries assumed purchased with cash; could lever if needed

Demand & Competitive Environment

Demand Trends:
- Remained strong across booking curve (close-in and further out)
- Peak and trough periods both improved
- Bookings resilient despite fare increases
- No meaningful elasticity observed to date
- VFR customers extremely resilient portion of franchise
- Over 2/3 of Q2 revenue already booked

Industry Context:
- Air travel still excellent value: Only commodity with prices down from 2019 (down 3% vs eggs up 96%)
- Example: June flights Orlando-JFK cheaper than Uber from JFK to Midtown
- Economy demand strong and core RASM positive

Fort Lauderdale Competitive:
- Double the size of next biggest competitor
- Did not anticipate Spirit liquidation when planning
- Taking advantage of gate availability from Spirit pulldowns
- Will backfill additional capacity if Spirit continues pulling down
- 23% capacity growth with only 1-point RASM discount versus system = outstanding performance

Europe Operations & Fuel Availability
- Serves 8 countries, ~14 daily flights (6% of summer ASMs)
- Minimal exposure to European fuel supply concerns
- Working with A4A to advocate for operating procedures
- Hopeful long-haul flying more protected than short-haul

Government Support & Industry Issues

Spirit Bailout:
- JetBlue has strong liquidity/unencumbered assets, different position than Spirit
- Open to support if terms make sense, but focused on executing JetForward
- Not influencing Fort Lauderdale strategy regardless of Spirit outcome
- Hiring Spirit employees to provide soft landing

Scale Challenges:
- Acknowledges importance of scale (NEA blocked, Spirit merger blocked)
- Blue Sky addressing scale through partnership utility
- Continues raising concerns in Washington about industry imbalance
- Not relying on government; controlling what they can

Tax Relief:
- Fuel excise tax suspension would be ~$20-25M annually for JetBlue (not significant)
- Industry views ticket tax as unfair (overpays vs private aviation)

Management emphasized JetForward is working – Q1 operating margin would have been 5 points better adjusted for fuel (negative 5% vs negative 10% actual), representing 3-point YoY expansion. Confident in strategy but timing of profitability return impacted by macro volatility.