Earnings call transcript: JetBlue beats Q2 2025 EPS forecast, stock rises

JetBlue Airways reported its second-quarter earnings for 2025, surpassing analyst expectations with an earnings per share (EPS) of -$0.21, compared to the forecasted -$0.33. This resulted in a surprise of 36.36%. The airline also exceeded revenue expectations, reporting $2.4 billion against a forecast of $2.29 billion. Following these results, JetBlue’s stock rose 5.28% in pre-market trading, reflecting investor optimism. According to InvestingPro data, the company operates with a significant debt burden of $9.4 billion and maintains a weak overall financial health score, suggesting continued challenges despite the earnings beat.

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Key Takeaways

• JetBlue’s EPS beat exceeded expectations by 36.36%.
• Revenue topped forecasts by $110 million.
• Stock price increased by 5.28% in pre-market trading.
• New Blue Sky partnership with United Airlines approved.
• Positive operational improvements noted, including on-time performance.

Company Performance

JetBlue’s performance in Q2 2025 marked a modest operating profit despite a 1.5% decline in unit revenue year-over-year. The airline saw growth in premium unit revenues and loyalty remuneration, contributing to its financial resilience, though InvestingPro data shows the company is quickly burning through cash with negative levered free cash flow of $1.3 billion in the last twelve months. The company’s strategic partnership with United Airlines, known as Blue Sky, is expected to bolster future earnings and enhance customer offerings.

Financial Highlights

• Revenue: $2.4 billion, up from the forecasted $2.29 billion.
• Earnings per share: -$0.21, beating the forecast of -$0.33.
• Premium unit revenues increased by mid-single digits.
• Loyalty remuneration grew by 9% year-over-year.

Earnings vs. Forecast

JetBlue’s EPS of -$0.21 outperformed the forecast of -$0.33, resulting in a positive surprise of 36.36%. This marks a significant improvement compared to previous quarters, where the company struggled to meet analyst expectations. The revenue surprise of 4.8% further underscores the airline’s robust performance this quarter.

Market Reaction

JetBlue’s stock reacted positively to the earnings announcement, rising 5.28% in pre-market trading to $4.55. This increase reflects investor confidence in the company’s ability to navigate current market challenges. The stock is trading closer to its 52-week low of $3.34, after declining 28.5% over the past six months. According to InvestingPro’s Fair Value analysis, JetBlue’s shares currently appear slightly undervalued, though investors should note the stock’s high volatility with a beta of 1.76.

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Outlook & Guidance

Looking ahead, JetBlue anticipates a decline in Q3 unit revenue by 6% to 2% and expects capacity to vary between a 1% decrease and a 2% increase. The company plans to maintain a full-year CASM ex-fuel increase of 5-7% and aims for capital expenditures to trend below $1 billion annually. JetBlue’s strategic initiatives, including the Blue Sky partnership, are expected to contribute positively to future earnings.

Executive Commentary

CEO Joanna Garrity highlighted the significance of the Blue Sky partnership, stating, "Blue Sky links two complementary networks with industry-leading products and services to increase customer choice and benefits while promoting healthy competition." She also emphasized the operational improvements, saying, "We are making meaningful progress. Our operation is improving."

Risks and Challenges

• Potential volatility in fuel prices could impact operating costs.
• Competitive pressures from other airlines may affect market share.
• Economic uncertainties could influence travel demand.
• Regulatory changes in the aviation industry may pose challenges.
• Execution risks associated with new partnerships and product launches.

Q&A

During the earnings call, analysts inquired about the potential revenue impact of the Blue Sky partnership and the sustainability of close-in booking trends. JetBlue executives expressed confidence in the partnership’s revenue opportunities and acknowledged the temporary nature of some booking trends, while remaining optimistic about long-term demand recovery.

Full transcript - JetBlue Airways Corp (JBLU) Q2 2025:

Abby, Conference Call Operator: Ladies and gentlemen, good morning. My name is Abby, and I would like to welcome everyone to the JetBlue Airways Second Quarter twenty twenty five 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.

Koosh Patel, Director of Investor Relations, JetBlue Airways: Thanks, Abby. Good morning, everyone, and thanks for joining us for our second quarter twenty twenty five 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 at our website at investor.jetblue.com and on the SEC’s website at www.sec.gov. In New York, to discuss our results are Joe N.

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 third 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 businesses. 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 fiscal year twenty twenty four ten ks and other filings for a more detailed discussion of the risks and uncertainties that could cause the 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 the call and other than as may be required by law, we undertake no obligation to update the information. Investors should not place undue reliance on these forward looking statements. Also, during the course of our call, we may reference certain non GAAP financial measures. For an explanation of these non GAAP measures and a reconciliation of the corresponding GAAP measures, please refer to our earnings release, a copy of which is available on our website and at sec.gov.

And now, I’d like to turn the call over to Joanna Garrity, JetBlue’s CEO.

Abby, Conference Call Operator: Good morning, and thank you for joining JetBlue’s second quarter earnings call. During the second quarter, we made meaningful progress with Jet Forward and met or exceeded guidance across all key metrics. Despite facing an uncertain macro backdrop, I am pleased that we produced a modest operating profit. We ran a strong operation and once again saw significant gains in customer satisfaction with second quarter net promoter score up double digits year over year. I want to take a moment to thank our crew members.

These results are a reflection of all of their hard work. As we entered the second quarter, demand stabilized and then accelerated as the quarter progressed. This resulted in a higher mix of close in bookings. I’m encouraged that we also saw this close in strength carry forward into July. However, I will note that weather and ATC related disruptions throughout the month of July have impacted operations.

In May, we marked another jet forward milestone, introducing Blue Sky, our collaboration with United Airlines. I’m pleased to say that we received confirmation that the Department of Transportation has completed their review, and we are now able to begin implementing Blue Sky. We’d like to thank Secretary Duffy, Assistant Secretary Edward, and the entire team at DOT for their engagement and thoughtful review of Blue Sky. As a reminder, this collaboration will benefit customers, increase the utility of TrueBlue, and further strengthen each airline’s loyalty program. Blue Sky will enable JetBlue to sell nearly all of its flights on united.com via a traditional interline agreement and vice versa, with the opportunity to earn and redeem loyalty points across each other’s networks.

United will also transition its distribution of nonflight ancillaries, such as hotels, rental cars and more, to our travel product subsidiary, Paisley, turbocharging its high margin growth. Blue Sky links two complementary networks with industry leading products and services to increase customer choice and benefits while promoting healthy competition. The collaboration is expected to contribute an incremental $50,000,000 of EBIT through 2027, accelerating JetForward. Including the benefit from Blue Sky, we are increasing our target for JetForward EBIT to a range of eight fifty million dollars to $950,000,000 through 2027. Marty will share more details on the individual drivers, but we are excited that Blue Sky will build on the tremendous progress we’ve made to date.

We are also pleased to report that our aircraft on the ground forecast due to the Pratt and Whitney GTF issue has improved, and we now expect to cycle through groundings much faster as a result. The revised forecast enables us to begin growing capacity again in 2026 through the end of the decade and achieve a more favorable unit cost growth trajectory. Ultimately, this will support our path back to restoring profitability. Turning to Page four of the earnings presentation. In 2024, we had a strong start to JetForward and realized $90,000,000 of EBIT early due to the success of revenue initiatives launched last year that ramped faster than we anticipated, including preferred seating and enhancements to our Blue Basic offering.

In the 2025, we’ve continued building on that momentum, realizing an additional $90,000,000 in EBIT across our four priority moves despite a far more challenging macro environment. Cumulatively, we’ve achieved $180,000,000 EBIT to date and remain on track to reach $290,000,000 in jet forward EBIT benefit by year end. Our efforts to drive a more reliable operation, part of our Reliable and Caring Service priority move, have brought significant operational improvements in the 2025. Our on time performance was up three points year over year, and Completion Factor was up zero five point, both industry leading improvements. These improvements are also reflected in our customer satisfaction scores.

And for the 2025, our Net Promoter Score was up double digits year over year, building on improvements made in 2024. In all, efforts to run a more reliable operation have contributed approximately $15,000,000 of incremental EBIT benefit over the 2025. We realized cost benefits from reduced disruption related spend, such as lower overtime pay and fewer customer reaccommodations. Additionally, we are seeing indications that customers are choosing us more often, proof that the investments we are making in our operation, such as implementing increased schedule buffers and launching new tools to enable customer self-service, are having a positive impact. We believe that on time performance and customer satisfaction are leading indicators for improved financial performance and that running a strong operation is essential.

These investments are especially important when we face disruptive weather, which is often compounded by air traffic control challenges as we have experienced across our network in July. Our efforts to adjust the network to our strengths and build the best East Coast leisure network are also maturing nicely. As you recall, in 2024, we closed 15 blue cities and redeployed over 20% of our network as we realigned to serve our core customer. These changes are ramping and are showing signs of relative improvement. For example, newer markets in secondary Northeast cities are exceeding expectations and are showing positive early traction.

Overall, network optimization represents $15,000,000 of incremental EBIT over the first half of the year. As part of our products and perf priority move, preferred seating continues to outpace expectations, and our new premium credit card is on track to double full year projections for acquisitions, highlighting the tremendous amount of demand by customers for our premium products. Lounges slated to open in JFK during the fourth quarter and in Boston Logan in 2026 remain on track and will complement our premium card to enhance the overall value proposition of TrueBlue. We are also updating our onboard experience to better serve our premium customers. This includes the enhancements even more launched earlier this year, and we also remain on track to begin rolling out domestic first class in 2026.

At the same time, we are reinvesting in our brand and living the fund value. ’25 for ’25, JetBlue’s 20 birthday promotion, our partnership with Bad Bunny, and our newly released Dunkin’ and Super Mario livery are driving excitement and reinforce our unique style and brands. Altogether, Products and Perks have generated $35,000,000 of incremental EBIT during the 2025. Lastly, our cost transformation is underway to secure our financial future with around 100 initiatives focused on technology enhancements throughout our business, supporting customer self-service, disruption management and fuel savings. In total, cost savings have driven $25,000,000 in EBIT and have contributed to our controllable cost outperformance with the second quarter marking our seventh consecutive quarterly cost beat.

Jet Forward is a comprehensive multiyear transformation, and we are making meaningful progress. Our operation is improving. We are building on our industry leading in flight experience, and we are getting back to our roots, reigniting JetBlue’s spirit of innovation and disruption. We know there’s more work ahead, but the momentum we’ve built gives us confidence that Jet Forward is the right plan, supported by the best crew members in the industry and a leadership team that is acting with urgency to meet the demands of a dynamic operating environment. With that, over to you, Marty.

Marty St. George, President, JetBlue Airways: Thank you, Joanna, and thank you to all of our crew members. As Joanna noted, improvements to our operational performance and customer satisfaction are true testament to the work that you do day in and day out. It does not go unnoticed. I’m thrilled to share that during the quarter, JetBlue was recognized by J. D.

Power as the top airline for first and business class customer satisfaction in the 2025 North America Airline Satisfaction Study. Our core experience also rose three spots to second place in the economy and basic economy segments and two spots to second place in the premium economy segment compared to 2024. Jet Forward and your commitment to the plan are driving real results and recognition. Over the quarter, we saw encouraging signs of an improved demand environment as the number of close in bookings accelerated as the quarter progressed. Before we review quarterly results, I want to take a moment to talk more about Blue Sky.

I’m very excited we announced this new collaboration with United. As we evolve our network, it is even more important to provide customers with more choices to earn and redeem TrueBlue points. Blue Sky features three primary value drivers. First, it will greatly increase choice for Blue Book members through the implementation of a traditional interline agreement, which expands our distribution reach and customer choice by cross merchandising flights on one of those websites and apps. Second, the collaboration promotes the growth of our loyalty business by offering reciprocal earn and burn between programs and elite status recognition, increasing utility of our points and the breadth and value of our program.

Lastly, the collaboration will supercharge us high margin, high growth and capital light Paisley business, which is JetBlue’s white label platform for distribution of hotels, rental cars, cruises, travel insurance and packages under brands such as United and others. These EBIT benefits are split between our network priority move for interline benefits and our product and perks priority move for loyalty and paid new benefits. Blue Sky is accelerating our transformation while bringing demonstrable benefits to customers across our system. Further, while the partnership is expected to begin generating value as soon as the fourth quarter, we are already seeing promising early traction. Since announcing Blue Sky at the May, new credit card sign ups accelerated in June.

In fact, we have seen a double digit increase in average daily card acquisitions in geographies outside JetBlue’s core markets. This is early evidence that the collaboration is increasing our relevance and making the TrueBlue program more attractive. On slide nine, we discuss the details of our second quarter revenue results and our unit revenue progression moving in the third quarter. We ran a strong operation during the second quarter and achieved a completion factor of 99.6%. Weather was generally favorable during the quarter despite the typical conductive weather challenges we saw during the back June.

We ended the second quarter with capacity down 1.5% year over year towards the better end of our initial range of down 3.5% to down 0.5%. Demand trends for the first quarter continued into the second, with bookings characterized by strong peaks and relatively weaker troughs. As the quarter progressed, we saw significant strength in bookings within fourteen days of travel. The close in bookings were especially apparent for peak travel and throughout June. In addition to close in strength, our second quarter RASM results were supported by action to better match supply with demand.

Early in the quarter, we took significant capacity action in the troughs, and we removed almost eight points above peak capacity from May and three points in June compared to the plan at the beginning of the year. Both the Easter and Memorial Day weekend peaks performed well. The Easter shift added almost 1.5 points to second quarter RASM. Peak RASM for the quarter was positive on book capacity year over year. We also experienced nearly a point of RASM benefit from Newark Book Away as the traffic disruptions caused customers to temporarily shift travel to alternate airports in multiple neighboring states.

That benefit was transitory as the runway reopened in early June. Overall, unit revenue declined 1.5% year over year in the second quarter, two points above the top end of our guidance range. The nature of close to bookings made forecasting challenging even within the quarter. In May and June, revenue generated within fourteen days of travel increased 7% year over year. Premium cabin, loyalty and transatlantic continued to demonstrate resilience.

Premium unit revenues were up mid single digits year over year during the quarter, and loyalty remunerations were up nine percent year over year. International continued to perform well, with transatlantic unit revenue up low single digits for the quarter. As you look to the third quarter, we have seen the closest strength carried into July, including the fourth of July holiday peak. We expect year over year unit revenue to be down between 6% and down 2% on ASMs ranging between down 1% and up 2%. As Joanna mentioned, we have faced more weather challenges than usual and elevated air traffic control delays throughout July, which have pressured the operation and our completion factor thus far in the third quarter.

Our third quarter capacity guidance assumes a more typical operating environment for August and September, and we’ll continue to monitor our operations closely as the quarter progresses. We anticipate a similar demand environment in the third quarter compared to the second, with the continuation of strong peaks, elevated closer bookings and weaker troughs. Notably, while demand is improving, there are a few one time considerations that are impacting our sequential RASM progression. In the second quarter, we benefited from both the Easter shift and Newark, representing roughly two points of RASM uplift. During the third quarter, we’ll be lapping one point of CrowdStrike benefit, or unlike many of our peers, we realized a revenue gain from peer book away during the event last year.

Additionally, the midpoint of our guidance for the third quarter translates to a roughly two point sequential increase in year over year capacity. Adjusting for these considerations, our third quarter RASM guidance implies continued demand and unit revenue improvement as we head into the second half of the year. Further out into the fourth quarter, we are optimistic that demand will continue to improve and we’re using this as our overarching planning session. However, revenue forecast remains challenging given elevated levels of close in bookings and an improving but still choppy macro environment. Therefore, we will not be providing revenue guidance beyond Q3.

Thank you. And now over to Ursula for an update on our balance sheet and cost outlook.

Abby, Conference Call Operator: Thank you, Marie. During the second quarter, we generated a modest operating profit, a small step on our road to sustain profitability. We also adjusted our fleet plan, remained disciplined with our balance sheet, and continued executing on our cost goals. These actions are grounded in our overarching objectives to enable capital efficient, long term growth, drive profitability and generate free cash flow. Turning to Slide 11 for an update on our fleet.

At the onset of the year, we shared that our Pratt and Whitney, GTS related aircraft groundings were expected to average mid to high teens for the duration of 2025 and to peak one to two years into the future. I’m very pleased to announce that the forecast for aircraft on the ground has improved materially, and we now expect to average fewer than 10 AOGs this year and believe that 2025 represents the peak with the number set to reduce as we progress into 2026 and fully resolve by the 2027. The improved AOG forecast is primarily driven by the extension of required maintenance intervals due to better than expected GTS durability performance and aggressive self help we have undertaken to source spare engines. As a result of geared turbofan challenges, we have not grown capacity since 2023, which has put meaningful pressure on unit costs and significantly impacted profitability. The revised forecast now positions us to return to long term capacity growth beginning next year.

Since these aircraft are returning to service and are not new deliveries, they represent an extremely capitalized source of growth. This will allow us to return to a more favorable unit cost per trajectory, supporting our return to profitability and free cash flow generation. Growing sustainably is important to our JET Forward strategy, and we have pursued various initiatives to balance growth, optimize earnings, and preserve capital across our fleet types. With our a three twenty fleet, we had planned to restyle all 10 of our remaining a three twenty classes to mitigate AOG capacity pressure. Given the improved AOG forecast, we have decided to pause the refiling of four aircraft and will instead park them after the summer peak as previously communicated to our crew members.

As we manage growth and balance sheet health, we have also decided to sell our two upcoming XLR deliveries. As a reminder, last year, we deferred roughly $3,000,000,000 worth of aircraft deliveries into the 2030s, including the majority of our a321 order book. Inducting these XLR deliveries would result in a costly orphan fleet of two aircraft for the remainder of the decade. Lastly, as previously announced, we officially end E190 flying at the end of this summer, simplifying our fleet from three to two types, the Airbus A220 and A320 families. The A220 replaces our E190s and offers higher gauge with 90% greater premium seat exposure and better fuel efficiency, resulting in a 25% to 30 improvement in direct operating cost per seat.

We took delivery of our fiftieth a two twenty earlier this month, and the fleet type represents the majority of our order block through 2029. For our e one ninety fleet, I’m pleased to announce we now have binding sale agreements for all 25 owned e one ninety aircraft and engines. The transition began in the third quarter and will continue through the 2026. Altogether, our revised fleet plan will enable sustainable and capital proven capacity growth through the remainder of the decade. Starting in 2026, we anticipate CapEx will decline steadily through the end of the decade commensurate with our delivery schedule and trend below $1,000,000,000 annually.

The fleet actions will also help to preserve liquidity in the short term. And in the second quarter, we ended with 3,400,000,000 in liquidity, excluding our $600,000,000 undrawn revolver. This represents 37% of trailing twelve months revenue compared to our liquidity target of approximately 20%, and we remain on track to end 2025 in excess of our target. Turning to Slide 12 for our second quarter cost results and third quarter outlook. The second quarter was another strong quarter for cost performance, driven by our operational execution and the progress of our Jet Forward cost transformation program, the team successfully mitigated pressures from closing capacity adjustments to end the quarter with CASM ex fuel up 6% year over year, better than our initial guidance of up six and a half to eight and a half percent.

This marks the seventh consecutive quarter we have achieved or beat our cost guidance. The beat is primarily from a better than expected completion factor for the quarter as well as timing shifts and fleet transactions. In addition to reducing capacity, we assessed our organizational structure and combined restructured certain roles for greater efficiency at the leadership level. We also implemented across the board budget reductions at support centers and are closely assessing all spending. A portion of the beat was attributable to these cost actions during the quarter as we took steps to respond to the evolving demand environment.

As part of our efforts to return focus to our core business, we also announced the sale of assets from JetBlue Ventures to Sky Leasing. This unique transaction allows us to retain the upside of the investment portfolio and other benefits, including continued access to cutting edge companies with greatly reduced costs. We expect to begin realizing these savings over the second half of this year. For the third quarter, we expect CASM ex fuel to be up 4% to 6% with approximately three points driven by maintenance and roughly two points from crew member wages as we fully lap the pilot wage increase from last August. Additionally, our third quarter Ex has been pressured by a difficult operation in July, representing a one point CASM Ex headwind from overtime, premium wages and other disruption related expenses.

Our guidance assumes a more typical operating environment for August and September. Also for the third quarter, there are roughly two points of CASM ex benefit driven by fleet transactions, the majority of which is the gain on sale from a portion of our e one nineties. We expect jet fuel to be in the range of $2.50 to $2.65 per gallon over the quarter, and we currently have no fuel hedges in place. For the full year, we remain focused on controlling what we can, and I’m pleased to announce we expect full year CASM ex fuel of up 5% to 7% year over year on one and a half fewer points of ASF at the midpoint of our guidance. This reinstates our initial unit cost guidance from the onset of the year despite lower capacity, illustrating the benefits of our strong operation and cost reduction programs.

At the same time, our full year interest expense remains unchanged at $600,000,000 and our new capital expenditure forecast for 2025 is $1,200,000,000 down slightly from our prior guidance. We are working tirelessly to deliver value to our owners, customers, and crew members, and we remain confident that JEP Forward is the right plan to get us there. We have the team, the strategy, and the runway in place to drive transformational change, and we’re already seeing clear, tangible results in our operations, in customer satisfaction, and in our path back to profitability. Thank you. And we will now open it up for questions.

Back to you, Abby. Thank you. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

To be able to take as many questions as possible, we ask that And our first question comes from the line of Dan McKenzie with Seaport Global. Your line is open.

Dan McKenzie, Analyst, Seaport Global: Hey, good morning guys. Great job on the second quarter. A couple of questions here. If I could just start with growth from diminishing AOG starting in 2026. Wondering Wondering if you can just help us size the pace of that growth that we should expect.

And and just related to this, how much larger could JetBlue be today without adding pilot headcount?

Abby, Conference Call Operator: Good morning, Dan. Thanks for the question. Given all the puts and takes, with the fleet, when we tried to lay out all the transactions that essentially are delivering us to be able to grow low single digits starting in 2026 through the end of the decade. So we’re extremely pleased with the improvement in the AOG forecast, which we will complete and be through by the 2027. And then we’ve been trying to optimize the rest of the fleet, whether it be retiring the e one nineties, simplifying it by selling the the two XLRs, and then deferring just some some refiles.

So we landed on this low single digit. Obviously, we’re willing and able to respond to the macro backdrop over that time frame and increase capacity slightly or decrease capacity to better match, the outlook based on the the demand, environment. So that’s the trajectory. Obviously, we’re extremely pleased to be able to see the light at the end of the tunnel, in terms of the AOGs because this has been a material headwind on JetBlue. And I do believe that when the macro environment continues to improve, that this will be a tailwind for us.

If I could just ask the pilot question, we we have a sufficient number of group. We’ve been managing the challenges with AOG through a series of voluntary programs, across both our pilots and our in flight and our airports. And so the benefit of voluntary program is that, because we knew the AOG issue was transient in nature, we will be able to sort of adjust, our staffing levels appropriately as these aircraft come back into service.

Dan McKenzie, Analyst, Seaport Global: Yeah. Very good. Marty, if I could go to JetBlue’s 51 partners. I remember when JetBlue first began adding partners, the stat you would share with us all was that, you know, these partnerships were filling the equivalent of of, equivalent of of two to three planes per day. And just wondering, where is that stat today?

And then related to that, you know, is there less international inbound today that you would expect to come back in 2026 and ’27? Roughly, how many percentage points of RASM can that increased connectivity typically drive?

Marty St. George, President, JetBlue Airways: Okay. Well, a lot of questions, Dan. Thanks. Let me start with this. We have 51 partners today.

And, you know, we’re we we feed in multiple focus cities, and we’re really happy with the partner portfolio that we have. Obviously, The United partnership is gonna be very, very important to us, and we’re really excited about adding United into the portfolio, not just from a perspective of feed, but also what it’s gonna do for TrueBlue, what it does for Paisley, etcetera. So I see a lot of upside on as far as how that goes. It’s funny. I remember also the comments about, you know, it fills one airplane, two airplanes.

And I think that was back when there was a lot of skepticism about low cost airlines doing partnerships. Now it seems like everybody’s talking about partnerships, including ultra low cost carriers. So I think we sort of don’t really look at that way anymore because, you know, our view is this is that’s the answer, and it’ll be proven that partnerships are very, effective for us. The thing we have going for us is that if you’re an international airline that wants access into the interior of the country and you’re not a member of SkyTeam, obviously, because you’ve got, you know, that one SkyTeam airline with a SkyTeam airline with a very good operation in New York and Boston, Like, your best way to get access into the interior US is JetBlue. And I think a lot of our partnerships, a lot of partners, and partnerships are tied to that presence we have in this marketplace.

I will also say, not just adding United to the mix, but we’re looking forward to working with Star Alliance partners, who we think will also appreciate the ability to get connectivity into, the East through through New York and Boston. But overall, you know, I feel like there’s so many things about the JetBlue model. And, again, I I came here in 2006 the first time. So many things about the JetBlue model that people question when we first did them that are now basically accepted as normal course of business for low cost airlines. And I think it’s just another example.

I feel very proud of the partnerships we’ve done. We love working with the partners that we do, and I see a lot of upside going forward.

Dan McKenzie, Analyst, Seaport Global: Yeah. That’s perfect. Thanks, Marty.

Abby, Conference Call Operator: And our next question comes from the line of Tom Fitzgerald with TD Cowen. Your line is open.

Tom Fitzgerald, Analyst, TD Cowen: Hi, thanks so much for the time. I’m just kind of curious, just looking at different the buckets for JetForward, the four priorities, are you able to provide any color about how, you know, as you go from the $1.80 to the $2.90, which of the four buckets, what you expect the contributions to be?

Abby, Conference Call Operator: Yeah. I can take that. I think, in general, it’s kind of spread evenly across the four the four buckets. I think as you think about the back half of the year, network ramping continues to be a meaningful driver. Most of the change we made in the network were last, q three last year, and they’re nicely in ramp, but we’ve got got a ways to go.

So, you know, pleased with the progress. You know, as we mentioned, we’ve realized a 180 of EBIT cumulatively, 90,000,000 in one h. We’ll see another 110 through the year end for a total of two ninety, by the end of this year. And we have very clear proof points across each one of the priority moves that JetForm is working. You know?

But it is a multiyear plan, it’s gonna take some time to realize the full the full benefits of it.

Tom Fitzgerald, Analyst, TD Cowen: Okay. Great. Thanks. That that’s really helpful. And then just as a follow-up, I’m just wondering if you’d mind providing any more color on, just kind of customer trends, like, by the different segments over the course of 2Q and then just quarter to date, what you have kind of on

Marty St. George, President, JetBlue Airways: the books, whether by kind of

Tom Fitzgerald, Analyst, TD Cowen: core leisure, VFR, you know, TrueBlue loyalty members, corporates? Thanks again.

Marty St. George, President, JetBlue Airways: Hey, Tom. I’ll take that one. Thanks for the question. As far as what we’re seeing, a lot of what we’re seeing is similar to what we’ve heard from other airlines in their calls. Definitely doing better for international than domestic.

Definitely doing better for premium versus the basic type customers. So I think we’re sort of consistent with what we’re seeing. We continue to see good numbers at TrueBlue, and we talked about some of the numbers as far as the growth of credit card, our remuneration. I think overall, the trends are actually good. I think the most important trend, it’s one that I give all the credit to our crew members for, is our Net Promoter Score.

You know, the last report we had done for Net Promoter Score, we were at the top of the industry for NPS. And, frankly, we’ve come a long way in the last three years. So from that perspective, I sort of look at that as sort of the straw that stirs the drink, so to speak, if we can use the baseball analogy. Because without a great customer experience, we can get these customers on board once, but they may not come But I I have great gratitude for our crew members providing just amazing service, so that the customers who do fly JetBlue are really happy and and hopefully come back. And frankly, I’m looking forward to having, you know, our partnership customers, whether United or Lufthansa or whoever ends up being a partner, come to fly JetBlue because, again, I feel like once you try us once, you’ll recognize how how much better JetBlue is, and you very much appreciate the JetBlue experience and look for us in the future.

I should mention, you mentioned you asked about business customers. In general, you know, we have year over year, we’ve taken a pretty big hit to our business customer network because we closed a lot of their business routes we flew at LaGuardia. Notwithstanding, our business revenue is basically flat quarter over sorry year over year for the quarter. So I actually see that as a very good sign.

Abby, Conference Call Operator: And our next question comes from the line of Jamie Baker with JPMorgan. Your line is open.

Jamie Baker, Analyst, JPMorgan: Hey, good morning, everybody. So Marty, a question on JetBlue. Do you have a view on where they fly with their seven daily frequencies? I mean, I’m assuming it’s TransCon as opposed to, I don’t know, flying to Dulles or something like that from JFK. So if it is transcon flying, have you modeled for that increased competition as part of your overall blue sky estimate?

Abby, Conference Call Operator: Hey, Jamie. Thanks. It’s Joanna. I’ll take that. So as you know, will be illegal for us to discuss with, our partner where they may intend to fly to JFK slots.

So we have not had those conversations, nor do we intend to. You know, obviously, we’ve made certain assumptions in our model as to what the impact of United flying those swaps may be, and that is included in the value of the of the overall, overall of the overall deal. There’s obviously a series of puts and takes. You know, United was obviously interested in the slots, there is an impact to JetBlue if they operate those slots to a variety of different markets. At the same time, selling the JetBlue network over united.com has a very, important revenue benefit for JetBlue.

Likewise, the utility of the TrueBlue program and giving our customers global access. And as you know, we sort of focused our own network on trying to drive scale in the Northeast. This is about trying to get scale to our customers to a global network. And then Paintly, is sort of the real the real upside here, in terms of the unique, opportunity for us to basically provide white label platform for United to sell its non air ancillaries, in the future.

Jamie Baker, Analyst, JPMorgan: Okay. Perfect. Thanks for the clarification. And then maybe, Marty, this is one for you. And maybe it’s too early to ask this question, but you’re obviously aware that certain struggling discounters are trying to lean into premium.

I mean, it’s more of a leg room exercise really. But in any case, in overlap markets, have any of those new products that have begun being sold by your competitors having any impact on your results?

Marty St. George, President, JetBlue Airways: Hey, Jamie. Great question. And I will tell you, we have seen no impact whatsoever from any of these so called premium products that are competing against us. I think if you look at, you know, our fifteen years of experience or actually twenty years of experience, including even more leg room of premium products. You know, we have great, great credibility with our customers that we can offer great, great premium products.

And, you know, I feel like you can try to do that in a ULCC environment, but I really don’t feel like it’s kinda come close to what we’ve been offering for twenty years. So from that perspective, you know, I think I’ll I’ll I’ll paraphrase Harry Truman. When the customer is choosing between a real premium product and a fake premium product, the real one’s gonna win. And, fundamentally, that’s what we’re seeing right now. And, you know, if you look at you know, we just we just went through a recent, announcement of some growth in in Fort Lauderdale where our biggest competitor is ULCC.

And, frankly, I feel like that is a example of how well we are doing in that market. I mean, we really are the only non ULCC option in Fort Lauderdale, and we’re very competitive with, you know, with the hub airport down the you know, a couple miles down the beach. But even with all that, I think it’s also worth mentioning, bringing us back to JET Forward, we continue to evolve our premium products. We’ve we we relaunched even more with enhanced customer experience. And, like, most importantly, we went out to domestic first class first class product that’s coming out next year.

So even as well as we’ve done in premium and as well as the revenue results have been, you know, we’re not risking our laurels. We’ll continue to do more exciting products. We could not be more excited about the domestic first class product. And frankly, I think our timing, is great for it because we’re really seeing that you know, I I keep using the phrase the barbell. You know, we get the barbell of, you know, a lot of demand at the bottom and lot of demand at the top, and we are really well positioned to take to capture that demand at the top of the top of the, demand curve.

Jamie Baker, Analyst, JPMorgan: Thanks. I appreciate that. It actually was some of those Fort Lauderdale ads that you announced that actually got me wondering about it, and, I obviously share your skepticism. So thanks for your answer. Both of you.

Take care.

Marty St. George, President, JetBlue Airways: Well, again, I I your your opinion of my fees don’t matter. It’s the customers and the customers are going with their they’re going with their feet, luckily.

Abby, Conference Call Operator: She needs media customers sometimes. I hope so. Yeah.

Jamie Baker, Analyst, JPMorgan: It’s just refreshing for me to agree with the management on any big meeting days with him. So, yeah, was I just pointing out.

Abby, Conference Call Operator: I might let you into the lounge. Maybe we’ll let you into the lounge at JFK.

Marty St. George, President, JetBlue Airways: That’s right. Thanks, guys. Thanks, Jamie.

Abby, Conference Call Operator: And our next question comes from the line of Savi Syth with Raymond James. Your line is open.

Savi Syth, Analyst, Raymond James: Hey, good morning, everyone. If I might follow-up on Dan’s earlier question on the capacity growth in 2026 a little bit more. Just how much of that growth is coming from reversals of AOG and even in 2027? I’m I’m just trying to get a sense of just how much of the, at least, the very near term growth in the next couple of years might be highly efficient from a cost perspective.

Abby, Conference Call Operator: Yeah. Thanks for the question, Savi. I mean, the majority of the projected growth is driven by the improvements in AOGs. Mean, if you take a step back, our original guidance for this year was that we have mid to high teens number of aircraft on the ground, and we’re now trending, you know, lower than, 10 on average for the full year. We believe that this year is the peak.

So as we navigate through 2026, you know, that that will come down over time and and be complete by the end of 2027. I think, you know, one of the major benefits here is gaining some efficiency on on the unit cost growth trajectory. Obviously, we’ve been pressured in not being able to grow over the last two years. And so this should give us a a level of efficiency on the cost side of the equation. So, again, you know, I’m hopeful that the macro backdrop is gonna continue to improve.

And when that does, this is gonna be a tailwind for us, not not only on the growth side, the cost side, but just from a a true profitability perspective.

Savi Syth, Analyst, Raymond James: Appreciate that. Thanks a lot. And if I might, I I wonder if you could, and I don’t know if this question for Marty perhaps, like, just talk a little bit about what you’re seeing on the competitive landscape and if, this current environment is is causing any kind of change of behavior and and among any of your competitors.

Marty St. George, President, JetBlue Airways: It’s a good question. Right? I mean, honestly, I don’t think it was I I I would not call it anything unusual in the competitive landscape right now. You know, the one thing that I would say is we’re obviously watching very closely the pull downs we’re seeing in the ULCC world, and we’ve reacted to that with some of the growth reported recently. I think another thing that is important to me on the list is just trying to understand what the the likely trajectory is gonna be of capacity for the industry because I would think we’re still not exactly clear what the rest of the year is gonna look like as far as growth rate, and that’s obviously gonna be very important as far as understanding what we should expecting for the rest of the year.

But overall, I’m I’m not looking at any significantly sort of noteworthy change in behavior that I would call up. I don’t know, Joanne, if you see something like that. But now we’re I think we’re I think we’re, you know, we’re we’re focused on the changes we’re, you know, that we’re that we were putting forward in the in original debt forward plan, all the network changes that we went through, and that’s we’re really sort of heads down on that right now.

Savi Syth, Analyst, Raymond James: Makes sense. Thank you.

Abby, Conference Call Operator: And our next question comes from the line of Mike Linenberg with Deutsche Bank. Your line is open.

Mike Linenberg, Analyst, Deutsche Bank: Good morning, everyone. I want go back to your comment just about this higher mix of close in bookings, this acceleration. Is this temporary? Structural? I sort of think as JetBlue rolls out a first class product next year, I mean, you’re probably gonna get you’re gonna rebuild your share of corporate.

I mean, are we are we on to something here?

Marty St. George, President, JetBlue Airways: Hi, Mike. Great question. And trust me, it’s a question we ask ourselves every single day we look at the booking report, at least since we started to see the strength. I don’t think any of us are ready to call this to be a permanent change, and it’s one of the reasons why we’re relatively cautious as far as our guidance. I do think that based on the the research that we have done, I I do believe a big chunk of it is just consumer sentiment and customers being cautious because of bigger uncertainty with all the stuff going on with, you know, tariffs and who knows what other stuff.

I’m not sure I understand the core drivers of it, but it certainly has the feeling of the I’m gonna wait a while before I make my booking. I think the reason I mentioned that is because we really didn’t see it in in April much too much into into any measure. It really was, I would say, May when we started seeing Memorial Day, big bookings pick up. We had a fantastic Memorial Day, much better than forecast, and that really carried into June. But it does have the feeling of people just waited a long time to make the final decisions.

And then when they decided, they just you know, they they they, they made their bookings. But I don’t I would not call this something that we’re expecting to be a permanent, fixture of a change for, the booking patterns.

Mike Linenberg, Analyst, Deutsche Bank: Okay. Great. And then just my second, I know, I think, Jenny, you called out the $50,000,000 sort of incremental EBIT because of the United partnership. Was the placeholder amount that you had for partnerships in the original JetForward plan? Just trying to get a total size of the United contribution.

Thank you.

Abby, Conference Call Operator: Yes. Thanks. Thanks, Mike. Yeah. We haven’t broken out the total amount.

As we’ve said before in JetForward, there’s number of puts and takes that were only focused on kind of the contribution of each of the priority moves as a whole. So the 50,000,000 incremental EBIT, that’s largely associated with the benefits from Paisley as part of the United partnership, but we haven’t broken it out. You should expect kind of full run rate, twenty twenty eight for, for Blue Sky. It takes some time, to implement it, and it will be staged with benefits coming, you know, over the course of the next couple of years.

Mike Linenberg, Analyst, Deutsche Bank: Okay. Great. Thank you.

Abby, Conference Call Operator: And our next question comes from the line of Catherine O’Brien with Goldman Sachs. Your line is open.

Catherine O’Brien, Analyst, Goldman Sachs: Hey. Good morning, everyone. Thanks for the time. Marty, maybe just one more on the revenue environment. Can you just talk about RASM between the months of the second quarter?

And then what’s underlying the monthly progression for the third quarter guide? Anything you can provide on book yields or loads? And and with bookings fairly fairly close in as you’ve been talking about, you know, how are you

Abby, Conference Call Operator: going about your September forecast? Thanks.

Marty St. George, President, JetBlue Airways: Hi, Katie. Thanks for the questions. Good questions too. As far as the progression, I I think we really saw an accelerate. We we don’t generally give a lot of monthly feedback, but I’ll just give a little bit right now.

We really saw progression sort of Memorial Day forward, and it was it was pretty hefty progression. I mean, as you saw, we had a pretty big beat for the second quarter. I think if you asked us that question on April 30, no one would have predicted a beat like that. But really, when we got to the the May, we really started to see things turn on and continue. And that has been continuing through July and August and excuse me, June, July, and August.

And I think the real issue is that this is one of the only prolonged peak periods of the of the calendar year. And one of the things that every airline has been calling out, including some of the biggest sort of legacies, is that there’s a pretty significant difference between peak and trough demand. Now clearly, still have troughs. Our load factor will be down in third quarter versus third quarter twenty twenty four, and the troughs are weaker than the peaks. But in general, this is a period of really good peak demand.

Specifically with September, I we’ve done a lot of self help in September as far as pulling down ASMs. We pulled a lot of off peak capacity. And again, thanks to the some of the programs that Joanna mentioned with respect to voluntary leaves. We’re doing the best we can to control our costs during September. And frankly, I think the fact that we continue to meet our cost guide and we have met it for seven six or seven quarters, I think seven quarters consecutively, even in light of all these changes, just shows how well we are doing as far as managing our costs even with relatively close in schedule changes.

So I look at this and I feel like we will be, well set up for the third quarter guide that we laid out. As of right now, I think with the work we’ve done in September, September actually has the highest year over year RASM increase of the three months in the third quarter. So I think it just shows how well we’ve managed September through capacity. So actually very positive about that.

Catherine O’Brien, Analyst, Goldman Sachs: That’s great. Thanks for that color, Marty. Maybe one for you Ursula. With all the fleet updates driving low single digit growth through the end of the decade, how should we be thinking about your historical comments on low single digit growth driving mid single digit CASM ex? Should that be better over the next couple of years as Jeff Ford and Shares ramp?

Thanks.

Abby, Conference Call Operator: Yeah. Thanks for the question. Yeah. Previously, we we’ve highlighted, you know, mid to high single digit growth for will result in a flash CASM ex fuel. So, you know, if you just triangulate low single digit growth rate, obviously, the unit cost performance will be higher than flattish.

You know, I I’m extremely pleased with the cost performance that the team has been executing to. I mean, at the highest level, you know, we’ve maintained the unit cost growth guide that we gave last in January despite, you know, pulling capacity, you know, over one and a half points. So we’re we’re finding ways, to take cost out of the business. Some of these decisions have not been easy, you know, between divesting, you know, the JetBlue Tech Ventures assets as well as, you know, additional budget targets and going through, you know, a corporate headcount support center review. Like, these are tough decisions, but, you know, we we need to continue to deliver on cost.

We’ve we’ve executed for seven quarters in a row, and and I do think the AOG outlook will will provide us the improvements that we’re seeing here, on the AOG outlook will provide us further efficiencies, as we build the unit cost growth target for 2026 and beyond.

Savi Syth, Analyst, Raymond James: And

Abby, Conference Call Operator: our next question comes from the line of Duane Pfennigwerth with Evercore ISI. Your line is open.

Duane Pfennigwerth, Analyst, Evercore ISI: Hey, thanks. Good morning. Just on the Travel Products business or Paisley business, can you expand on how you kind of generate a margin in that business on your own bundle? What shape does that take? Is it commission based?

Is it kind of a third party clearinghouse? Do you have negotiated agreements on room inventory? And then maybe you could contrast, again, high level broad strokes, the margin you make on one of your own customers versus the margin you make on a third party airline customer like United?

Marty St. George, President, JetBlue Airways: Hi, Duane. Thanks for the question. Great question, by the way. And I love talking about Paisley because, a, it’s been a fantastic product for us and a great product for our customers and b, as you saw from our guide up for Jet Forward, it’s gonna be important part of our recovery program going forward and important part of Blue Sky. So as far as how the math works, it’s actually very simple.

Just as a reminder for those who don’t understand what we do through Paisley, it’s selling all of our non air ancillary products. So that includes, you know, hotel packages under JetBlue Vacations brand. It includes standalone rental cars and hotels. It includes travel insurance. It includes cruises.

We actually have, like, theme park tickets, like, all sorts of things that customers use that are tied to a flight booking. And just to be enough, we see customers who will book on Paisley who are not tied to a flight booking. You know, we sold cruises originating in Asia, for example, because they like the prices that we have and the ability to earn through BluePoints. So Paisley has actually been great for our customers. We basically earn on commissions.

So we get commissions from the hotels, from the rental car company, insurance, etcetera. We’ve negotiated we don’t release the exact number, but, you know, we’re in the four digits of the number of hotels with whom we have contracts, in addition to a great exclusive deal right now with Avis for rental cars. And, you know, overall, it’s been a great profit generator for us. The EBIT margin for Paisley is in the fifties, and climbing into the sixties. It’s also a very low capital business.

The only capital we spend is basically a little bit of of IT CapEx. And frankly, what we’re most excited about is that we can scale this product up with the addition of access to United customers. And the way we describe it is basically it’s a leads business. You know, we bring them 40,000,000 leads excuse me. The airline brings 40,000,000 leads a year into Paisley, and now we’re gonna add, you know, nine digits of leads from United customers.

We don’t actually know what United’s margins are for their current relationships because that’s not something that we would share. But, when you look at what we’re producing and what we believe we can produce for United, they made the independent decision that we would do a better job of generating profit for them than their current partners. We are splitting the commissions. We we’re not releasing that split publicly. So, unfortunately, I can’t give you that amount of detail, but we’re really excited about it.

I know this is something that we are extremely good at. We have a group of people who are red ring from JetBlue, you know, separate IT systems, separate everything. They’re in Fort Lauderdale. They’re not in New York. And this has really been set up to be a white label for multiple brands.

We are talking to additional airlines over and above United. In fact, we’re talking to some non airlines. This group is very, very good at their job, and we’re really excited about its ability to contribute to profitability going forward.

Jamie Baker, Analyst, JPMorgan: Okay. Appreciate the thoughts, Marty.

Abby, Conference Call Operator: And our next question comes from the line of Atul Maheshwari with UBS. Your line is open.

Koosh Patel, Director of Investor Relations, JetBlue Airways0: Good morning. Thanks a lot for taking my question. On fourth quarter, I know you’re not providing RASM guidance yet, but assuming demand stays at current levels, should RASM improve versus the third quarter on a year over year basis, fourth quarter year over year versus third quarter year over year, does that improve, in the fourth quarter, if demand stays at current levels or does it take a step back given you lap some of the December strength from last year? So just some directional color using your third quarter guidance as a marker would be helpful assuming that the fourth quarter demand is in line with what you’re assuming for the third quarter.

Marty St. George, President, JetBlue Airways: Okay. Hi, Itzel. Thanks for the question. I’m not even going to come close to approximately a guide, so I’m going to answer your question very carefully because we’ve deliberately chosen not to guide fourth quarter. And there’s really two reasons.

One of them is that when so much of the strength we’re seeing in third quarter is coming from close end bookings, which is a new pattern for us, I don’t know that we wanna call that as a permanent change in the booking curve, number one. Number two, there’s a lot of uncertainty as far as, the ASMs that are gonna be out there in the industry. I think if you look at what airlines have reported their growth was, that would give you one assumption on RASM. If you look at what’s actually out there loaded and what practice has been as far as your people are actually flying, that would give you a different number. And frankly, we are still offering a little bit too too many ASMs, in the fourth quarter.

If you look at our annual guide for ASMs and look what’s out there selling, it’s very easy to do the math that we have probably a little under a point of ASMs to pull in the fourth quarter that are still out there selling. So I think with the lack of visibility on both the pay the pace on on, you know, how permanent this change in, booking patterns will be and also on whether the capacity cuts in the fourth quarter will will go forward for the rest of the industry. I think it’s very too too early to tell. That being the case, you know, I think that, you know, what we’ve seen as far as the big over performance in September excuse me, in second quarter. And then on top of that, the progression in third quarter, that we’re feeling very confident about where the revenue environment is as far as recovery.

But I think it’s way too soon to call that that you know, the specifics of what you’re asking for fourth quarter.

Abby, Conference Call Operator: Yeah. We have less than 20% booked for q four. And so as we get a bit closer, we’ll we’ll be in a position to provide an update.

Dan McKenzie, Analyst, Seaport Global: Okay. Fair enough. And

Koosh Patel, Director of Investor Relations, JetBlue Airways0: then as we follow-up, as you return to growth next year, where will this growth be concentrated? Like what markets, geographies that you believe you’re under serving today that could benefit from this growth? And related to that, how do you ensure that this growth does not cause any, meaningful RASM dilution next year that could maybe offset some of the CASM ex benefit that you might get?

Abby, Conference Call Operator: Yeah. Thanks for the question. So we’re not gonna, open the playbook and tell our competitors where we’re flying next year. So, you know, I think we’ll we’ll keep that, close to the vest until we’re ready to communicate more carefully what, we’re gonna be doing with, with that flying. I think in terms of your second question around, around how we’re thinking about ensuring that the growth doesn’t erode, RASM and or impact sort of that low single digit cost, trajectory.

A few things, you know, the growth is very capital efficient. We already own these aircraft, so they’re coming back into service. So there’s very small costs, associated with that as we think about it. You know, if the if the environment doesn’t improve or further degrade, we have a number of different levers we can pull to manage that growth. And I think if you look at what we’ve been doing this year, we’ve been doing just that.

So we’ve reduced capacity. We’ve looked at, you know, making actions with the fleet. So we’ve taken four of our 10 classics, and we’re not gonna be, restyling those. We’ve also sold two XLRs, and then we can obviously adjust utilization up and down as the case may be. So, you know, I think we’ve got a track record of being pretty aggressive with the fleet, to manage the demand environment, whether, you know, it’s it’s the sales that we’ve done or, you know, as we think about going forward needing to manage capacity, closer in.

So, you know, we’ll adjust as we need to. But the goal is this is very efficient growth, because we already own these aircraft and it should drive, improvements to unit costs.

Koosh Patel, Director of Investor Relations, JetBlue Airways0: Thank you and good luck for the rest of the year.

Abby, Conference Call Operator: And our next question comes from the line of Ravi Shanker with Morgan Stanley. Your line is open.

Koosh Patel, Director of Investor Relations, JetBlue Airways1: Great. Good morning, everyone. Just a couple of follow ups here. I think you said earlier in the call that you expect Blue Sky to be implemented in stages. So how do you think about that kind of ramping the next two, three years?

Is that gonna be pretty lumpy? And can you us some color on kind of when the next stage is going in? Or is it still gonna be pretty linear?

Abby, Conference Call Operator: Yeah. Maybe I’ll just I’ll just grab it high level. So we’re still working on the implementation plan with United. So I don’t wanna get into, you know, a ton of specifics. I will say the NEA has set us up pretty well.

The the Northeast Alliance of America and the technology we did behind that has set us up pretty well from a technology perspective. So you’ll start seeing kind of earn and burn and interline sales come sooner. There’s very little contemplated this year. Those those will kind of layer in into ’26, and then Paisley, would come would come after that. There’s some more technology needed to implement paisley.

Ultimately, we will not achieve, as I mentioned, kind of full year run rate until 2028.

Koosh Patel, Director of Investor Relations, JetBlue Airways1: Understood. And Marty, I think you were talking about, next quarter and kind of how a lot of capacity has come out and you’ve taken a lot of trough capacity. But again, just going back to the kind of little bit of a blindsiding the industry got in February and March and a lot of that came from closing weakness. Is that a risk that after a pretty decent kind of peak season with summer that closing continues to kind of resume with that drop off, if you will, in the third quarter? And if so, do you think the industry has taken out enough?

Marty St. George, President, JetBlue Airways: Ravi. I think the answer is we know what historical patterns have looked like as far as seasonality. I think the only question is do we think economic sentiment customer sentiment will take a step back? And I don’t see any indication that that’s gonna be coming. Again, we do find the closer nature of this to be a little bit different, is why we’re a little bit apprehensive, but I don’t think we’re looking at this like we’re waiting for a shoe to drop.

I I you know, if you look we’ve gone back and looked at four or four or five relatively big step backs in demand, you know, whether it’s, know, world financial crisis, 09/11, you know, dot com bust, things like that. And they they follow a relatively predictable pattern. And, frankly, we had said that fourth quarter is when we thought there’d be an inflection as far as a demand coming back up because that’s what we see historically in situations like this and that we actually see in the third quarter. So from this point, I don’t see any reason to be too cautious about it, but I’m probably more worried about the capacity situation than I am than the demand situation. But obviously, we watch it very closely.

We do have a good base in the books in the fourth quarter, but we have a lot of bookings to go. So I wouldn’t want to get too far ahead of myself on that.

Abby, Conference Call Operator: Yes. If I could just add, I mean, I think we were the to call it, this year when we saw it and made very, very quick steps to try to drive cost savings out of the business and reduce capacity. And so we’ve got a playbook so that we can try to make the business as flexible as possible when we do see step backs in demand. And so I think if you look at what we did in kind of q one and into q two around reducing capacity, reducing discretionary spending, and, you know, other cost savings measures, you know, I think we’re always focused on how we can try to keep the business as agile as possible, in an industry that is more difficult to pull some of those costs out, closer in.

Koosh Patel, Director of Investor Relations, JetBlue Airways1: Very helpful. Thanks, guys.

Abby, Conference Call Operator: And our final question comes from the line of Connor Cunningham with Melius Research. Your line is open.

Koosh Patel, Director of Investor Relations, JetBlue Airways2: Hi, everyone. Thank you for squeezing me in. Just on maybe sticking with the I mean, appreciate that you’re not giving fourth quarter guidance because it is obviously very dynamic. But I’m just what I think I’d love to get your thoughts just on the capacity set up for 4Q in general because last year was particularly strange for the election and so on. And when I think about how the progression of last year kind of played out, October and November were particularly weak and then really, really strong in December year post election.

So I think the biggest fear that a lot of folks have right now is that there’s going to be too much supply come the fall, given the fact that RASM is inflecting a little bit here. So if you could just talk about the setup in terms of supply into the end of this year, just how you think it all unfolds in general? Thank you.

Marty St. George, President, JetBlue Airways: Alright. Thanks, Connor. And, yes, obviously, this is one of our biggest concerns with calling the fourth quarter. But I I can only talk about my view of the world. I can’t talk about what our competitors are gonna do because I really don’t know.

I know what they said, and we’ll see what they actually do because those tend to have been different at some points. We’re pretty consistent with what we say and what we do on things like this. We have right now, we do have a little bit more capacity selling in the fourth quarter. That capacity coming out relatively soon. We’ve given a guide for ISMs for the for the year in which you can you can calculate the fourth quarter number out of that, and that’s what we’re gonna fly.

I mean, absent some significant change in demand, you know, we we we we do the ASM planning based on what we see demand to be. I think we have made incredible steps in this network in the last year as far as all the changes we made tied to JetFord and then followed that up with, some very aggressive sculpting of peak versus trough. And, frankly, I go back to the thing which I am eternally grateful for is how well this company has risen to the occasion and continue to meet our cost guide while we were doing some pretty aggressive ASM pulls on the Tuesday, Wednesday, Saturdays of the world. So I think we’re at the point now where we feel relatively free to do these, you know, these margin accretive activities knowing that we’ll get the cost out, and we’ll continue to do that. You know, fourth quarter is a pretty heavily trough you know, pretty pretty heavily trough quarter.

I mean, certainly, October, November, half of December, it’s definitely trough. And we’re gonna be pretty aggressive as far as pulling capacity during those periods. Again, this is not I’m not telegraphing it. You’re obviously it up there already and what we’ve loaded that we pull the troughs down pretty well. And I look forward, you know, if we see this peak demand coming in like it like it is right now, I look forward to seeing that in the fourth quarter.

But frankly, you know, we are a we are a small airline in this business. Our ASMs are not gonna drive significant impact industry RASM like the like the big four are. And, like, let’s I I think we’ll have to see what they do before we’re gonna call on that.

Koosh Patel, Director of Investor Relations, JetBlue Airways2: Okay. That that’s super helpful. And then just a a point of clarification. Ursula, the the two point benefit to CASM ex from the fleet changes, is that a sale? Like are you booking a gain that’s going to ultimately be a contract expense?

I’m just trying to understand the bridge as we move from third quarter to fourth quarter. My guess is there’s just some sort of simplification benefit as well. But just any thoughts there, that would be helpful.

Abby, Conference Call Operator: Yeah. So here’s some color on the fleet transaction. So on a full year basis, we’re actually gonna have a gain across all these asset sales to the tune of 1.25 points of CASM ex benefit on a full year basis. Okay? And and so then you back up.

And in the second quarter, we actually outperformed on the CASM ex, guidance, and about half a point was driven by, a gain on sale of these assets. So, when I say assets, we we got a multitude of different assets that we’ve been selling. Right? It’s the XLR two aircraft. It’s the e one nineties, and then we’ve also been doing some sale leasebacks on engines as well.

So quite frankly, those assets are being pretty well received by the market, and so we’re we’re hence booking gains above and beyond what we had anticipated. So it was 0.5 points in the second quarter. We’ve obviously got two points in the third quarter. And then on a full year basis, to round it out, it’s 1.25 points.

Koosh Patel, Director of Investor Relations, JetBlue Airways2: Awesome. Thank you very much.

Abby, Conference Call Operator: And ladies and gentlemen, that will conclude today’s call, and we thank you for your participation. You may now disconnect.

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