JetBlue at TD Cowen Conference: Blue Sky Partnership Insights

JetBlue Airways Corp (NASDAQ:JBLU) presented at the TD Cowen 9th Annual Future of the Consumer Conference on Wednesday, 04 June 2025. The focus was on the new "Blue Sky Partnership" with United Airlines, anticipated to bring significant value through loyalty program integration and other initiatives. While JetBlue is optimistic about regulatory approval, it faces challenges like supply chain issues and flat revenue trends.

Key Takeaways

• JetBlue’s "Blue Sky Partnership" with United Airlines aims to integrate loyalty programs and expand Paisley, its ancillary product subsidiary.
• The company has consistently met its controllable cost guides despite capacity challenges.
• Supply chain improvements have reduced the number of aircraft grounded due to engine issues.
• JetBlue is focusing on technology investments to enhance customer experience.
• The airline is preparing for the retirement of its E190 aircraft and domestic first-class retrofits.

Financial Results

• Paisley Run Rate: Paisley is generating a quarterly EBIT run rate of $20-25 million.
• Other Revenue Growth: Significant growth in other revenue since 2022, largely due to Paisley’s expansion. Customer revenue through Paisley has tripled over the last 3-4 years.
• Controllable Costs: JetBlue has met its controllable cost guide for six consecutive quarters, with higher expectations in the year’s first half due to maintenance and pilot rate adjustments.
• Premium RASM: Premium revenue per available seat mile showed high single-digit growth.
• Non-Aircraft CapEx: Annual spending on non-aircraft capital expenditures is between $100-150 million, focusing on technology.

Operational Updates

• Operation Performance: JetBlue’s operations are improving, with an increase in A14 performance and a higher completion factor.
• GTF Engine Issues: The number of aircraft grounded due to engine issues has decreased, thanks to supply chain improvements.
• Aircraft Deliveries: Delays in A220 and A321 aircraft deliveries are expected, but JetBlue remains optimistic about meeting annual targets.
• E190 Retirement: The E190 aircraft are scheduled for retirement after the summer peak, with a 30% unit cost benefit expected from the A220 transition.
• Brightline Trains Partnership: Collaboration with Brightline Trains in Florida aims to improve operations and passenger re-accommodation.

Future Outlook

• Blue Sky Partnership: Customer benefits from the partnership are expected to begin in the third quarter.
• Domestic First Class Retrofits & Lounges: First lounge opening by the end of 2025, with Boston following in mid-2026. First-class installations are planned for 2026.
• Paisley Expansion: Incremental revenue from United is anticipated next year. JetBlue aims to grow Paisley, leveraging its technology for potential partnerships.
• Capacity Adjustments: The airline is reducing capacity on less busy days due to softened demand.

Q&A Highlights

• Blue Sky Partnership Details: The partnership includes loyalty program integration and interline agreements, with significant benefits expected from Paisley.
• Regulatory Review: JetBlue is optimistic about regulatory approval, having structured the agreement based on previous legal precedents.
• Paisley’s Growth Strategy: The strategy involves replicating a three-channel model for United, including in-path sales and package offerings.
• Demand Trends: The airline sees a "new normal" of flat year-over-year revenue declines, although Memorial Day weekend bookings were strong.
• Technology Investment: JetBlue is investing in technology, such as mobile app enhancements, to improve customer experience and drive sales.

For more detailed insights, please refer to the full transcript below.

Full transcript - TD Cowen 9th Annual Future of the Consumer Conference:

Operator: All right, kick it off. Good morning, everybody. We’re really excited to be here today webcasting live with the team from JetBlue Airways. We have Marty St. George, President, Ursula Hurley, Chief Financial Officer, and Jamie Perry, President of Paisley, formerly known as JetBlue Travel Products.

Before we get into the Q and A, would you guys like to make any opening remarks?

Marty St. George, President, JetBlue Airways: Yeah, first of all, thank you all for coming, good to see some familiar faces here and some new faces. And obviously I think the biggest news that we’ve put out recently has been the new relationship with United, which we’re calling the Blue Sky Partnership. And I basically can describe it as a three pronged value generator for us. Number one, and I think most importantly, is the relationship between our loyalty program TrueBlue and MileagePlus. What this means is that JetBlue customers who currently love the TrueBlue program but recognize that you can’t really go everywhere to redeem or to earn points can now earn and redeem system wide across the entire United system.

And that includes recognition of their elite status, things like that, and vice versa for United customers getting access to JetBlue’s system. Number two is the in line agreement that has us jointly selling each other’s flights on our websites. So all of the United system will be appearing on JetBlue.com, so for JetBlue customers who love JetBlue.com, they’ll be able to book the flight from LaGuardia, Chicago to Omaha if they want to go and earn Tribal points, and vice versa. The entire JetBlue system will be on the United website. And the third piece, which I think for us is the most exciting piece, is the alignment of our wholly owned subsidiary called Paisley.

Jamie is the president of Paisley, he’s going to be on the stage to answer Paisley questions, is the alignment of Paisley with the United ecosystem so that Paisley, which today for JetBlue, sells non air ancillary products, which I’ll say are vacation packages, cars, hotels, insurance, cruises, things like that. We’ll also be selling those to United customers. So we’re actually very excited about the value generation of each of those. We made a commitment that we would be updating the value generation from our Jet Forward program every six months. That will come in the July earnings call, second quarter earnings call, so I’m not going to give any numbers right now, but we’re excited really about all three of those elements, and we see this as a great value generator for JetBlue, and most importantly for our owners.

So with that, that’s the end of my prepared remarks, and we’ll go right into it.

Operator: So Marty, you talked about how Jet Forward had contemplated an airline partnership, but that Blue Sky exceeded those expectations. Was that mainly on the non ticket side with Paisley and Connective, or what were some the drivers of those?

Marty St. George, President, JetBlue Airways: I mean, I’d say that both. I mean, the majority of benefit that’s over and above what we’d expected came through Paisley and Connective. But there’s also the breadth of the opportunity at United is a little more than we had forecasted originally. I will also say that we’re going through the regulatory review process, so no numbers are final until we hear from DOT and DOJ. But we’re very optimistic.

We learned a lot of lessons from our relationship with American, and we were taught a lot of lessons by the judge who rejected that program. But the relationship that we wrote jointly with United was more or less dictated by the judge’s ruling. So we are very confident of the ability to get through the regulatory hurdles quickly, because we basically wrote it based on the judge’s formula.

Operator: You had a great interview last week with the airline observer, and you talked about how the airline agreement accomplishes 90% of the codeshare without a lot of the headache on the back end. Can you just walk through some of that, and maybe the cost headaches that you’re avoiding with this structure versus the NEA?

Marty St. George, President, JetBlue Airways: Sure, I mean I think that the, ultimately this all comes down to generating incremental profitability for us and what we’re bringing to the customer base of JetBlue, we’ve realized that we could do through Analine much, much easier than we could through codeshare. We were actually one of the very first airlines to start selling Analine on our website. 02/2008, when we didn’t have the capability to codeshare, we were selling connections with Aer Lingus. So Aer Lingus flights were showing up on our website, so you could go from Raleigh to Boston to Dublin. And we’ve been selling that for well over ten years.

That, to be honest, we have great experience with that. So I think if you look at the complexity of codeshare, it’s a lot of logistics for us. It’s now I have to be filing prices to the entire United destination system. I have be filing flight numbers and keeping track of where the United schedule changes and our schedule changes. And we looked at the incremental benefit versus incremental cost.

We realized we were getting 80% of the benefit at very, very little incremental cost. I’ll also mention that the regulatory hurdle for codeshare is much, much higher than the regulatory hurdle for Interline. You know, our goal was to bring this benefit to our customers as quickly as we could, and I think by not having codeshare, we’ve really smoothed the regulatory process in a way that I think is going be great for our owners.

Operator: Yeah, no, was definitely thoughtfully done. How, you know, so you’re doing this swap of slots at JFK with timings at Newark, can you talk about how the timings at Newark can help you optimize your schedule for leisure traffic?

Marty St. George, President, JetBlue Airways: Sure, it’s actually very simple. This is a real win win, and again, our relationship with United has been, it’s newly developed, but I think we both look at this very similarly, and United’s a very customer focused airline as we are, so I think that’s a big plus. But specifically with respect to Newark, our schedule pattern for Newark is basically focused on the Florida and Caribbean markets. We have a lot of afternoon operations in the current sort of very odd slot regime, it’s not really slots, but it’s sort of operational appointments, I’d call them. We have a lot of activity in the afternoon, where it doesn’t really work very well for The Caribbean and Florida, and that’s actually a peak time for United, and they have opportunities in the morning.

So it’s really a nice arm’s length agreement where this would be very good for United and it’s very good for us to get flights in the morning which are better for Caribbean and Florida. So it’s funny, talked about it because it’s factual part of it, it’s not that big of a piece of the value, but I think it’s a good example of how, as two airlines, we’re really trying to create win win opportunities.

Operator: And how, when you think, you know, you’ve talked a lot about someone going to Omaha or in the central part of the country, but is the interline agreement, does that extend to United’s international network as well?

Marty St. George, President, JetBlue Airways: Absolutely, Yeah, our customers will be able to earn and burn points on every single United flight operated worldwide. Okay, that’s exciting. And by the way, you’re on Mosaic, you will get your Mosaic benefits those flights as well,

Operator: and vice versa. FFP reciprocity. Yes. Love to dig into Paisley and Connective, when, you know, I was really excited to see that line about quarterly earnings from Paisley being at a 20 to $25,000,000 run rate. Was that on the EBIT line or pre tax margin?

Jamie Perry, President of Paisley, JetBlue Airways: I believe that’s EBIT.

Operator: EBIT, okay. Okay. And then I’d love to, you know, it seems like when I look at the similar web data on web traffic, you know, the United, if we just aggregate all their different vacation package related stuff, I mean, it’s like four x the traffic that Paisley is seeing. Can you maybe just talk through the, know, Paisley’s growth, where you know, where it’s gone from A to B and you know, the opportunity that they could widen in the funnel here presents for you guys?

Jamie Perry, President of Paisley, JetBlue Airways: Sure. So, let me start by what we do with JetBlue today. So we sell through three channels for JetBlue. We sell in path on jetblue.com and in the app. So if you wanna buy travel insurance or if you wanna buy a rental car, hotels coming soon, you can buy those in path without leaving the website.

Secondly, we have a dedicated JetBlue vacations channel where we can sell you a flight and a hotel or a flight and a cruise bundled together for one opaque price. That works for certain customers, certain markets, etcetera. And then we have a third site, which today is called paisley.com, where we will sell you any standalone item. So just a car, just a hotel, just a theme park ticket, etcetera. So over the last five years through those three channels for JetBlue alone, we’ve been able to triple the revenue per customer just by I’ll talk in a minute about how we’ve done it.

Now, what we’re going to be doing for United is replicating those three channels. So adding certain elements in path on united.com and on their website, adding certain package offerings to a packaging platform, and then adding standalone pieces to a standalone platform. They haven’t decided what they’re gonna be called yet, but we will replicate that three channel model.

Operator: Okay, that’s really exciting. I mean, there’s been, like for your own growth, if I look at other revenue, which presumably that’s where Paisley’s embedded, there’s a big inflection around 2022, is most of that growth coming from Paisley?

Jamie Perry, President of Paisley, JetBlue Airways: I don’t know what else is in that revenue line in the

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Yeah, I think it’s a good portion of it. Exponential growth as Jamie mentioned, specifically over the last like three to four years, I think we’ve tripled our per customer revenue generation through Paisley. So yes, that was one of the material drivers in that year over year comp, Tom.

Operator: Okay, exciting stuff.

Marty St. George, President, JetBlue Airways: I’d say we’ve given guidance, we’ve given a little bit of public data about Paisley. Based on the public data that we’ve seen, we believe Paisley is the best in the world with this. Okay. And frankly, if someone else is better, I’d like to see it because we’re curious how we can get better ourselves.

Operator: Great, great. No, that’s exciting to see, big fan of non ticket revenue here. How unconnected, can you talk about the opportunity for you guys? I get with United, you know, really efficiently expands their screens, but is there like a fixed and variable revenue component for you? What’s the how can that benefit JetBlue?

Jamie Perry, President of Paisley, JetBlue Airways: So, that piece of the deal is still being ironed out, but essentially the way it’s gonna work is Connectiv today monetizes placements across United’s digital ecosystem, so seat back screens, the website, the app and other digital touch points they have in their ecosystem. We’re going to be bringing that technology to JetBlue’s digital ecosystem as well, so it will start to monetize our seat back screens, our website and app, our Paisley platforms, and so on and so forth. So same technology, but coming to our equivalent of the places on The United ecosystem that works today.

Operator: Yeah, yeah, I remember when Connective came out, I thought of you guys would be a fast follower, but hadn’t considered

Jamie Perry, President of Paisley, JetBlue Airways: It’s an interesting business model because it benefits greatly from scale. Yeah. So, obviously, there’s no sharing of customer data. United customer data is completely separate from JetBlue customer data, but nonetheless, the underlying technology and the value proposition for advertisers is greatly benefited by scale.

Operator: You know, I’ve talked a lot about Starlink playing a big role for them in Connectiv. How do you think about in flight Wi Fi in in the context of the technology enablement that you’re doing with Paisley and Connectiv and then also just in the overall arms race for brand loyal customers?

Jamie Perry, President of Paisley, JetBlue Airways: So when it comes to monetizing the digital ecosystem, the seat back screens are still the most valuable asset because people are watching them constantly. If you think about how you use in flight Wi Fi, you typically go to a portal which presents some monetization opportunities. But once through that portal, you’re then off into the broader Internet to do whatever you want. Right? So it is definitely the sort of the fixed screens that offer the most benefit, both in terms of like roadblocks and map channels and so on.

Operator: And then just on WiFi, do think about that potentially in arms race? Are you constantly, is that something you’re evaluating of?

Marty St. George, President, JetBlue Airways: Yeah, no, we certainly see opportunities in WiFi. And I’ll remind people, we were the very first journalist country to offer in flight WiFi with a product called Beta Blue, probably almost twenty years ago. And then with Viasat, we were the first to offer free system wide internet. So our view is that JetBlue is fundamentally a customer focused company, where we have competitors who continue to charge for Wi Fi or give you various hurdles to get in, your cell phone provider or whatever. It’s free for every single customer, and we’d like to maintain that relationship and make sure that we continue to innovate.

I have no news as far as our future, but we clearly recognize that we want to be a leader going forward permanently.

Operator: Okay, exciting. And then how, just one more thing on Blue Sky, just, you know, seems like it should be a pretty great case for easy review for regulators, but do you have any sense on the timeline of what the review process for that could look like?

Marty St. George, President, JetBlue Airways: So, we’ve had our first conversation with regulators, and they are evaluating the documents we’ve provided. You know, we very much respect the regulatory process. This is written with them in mind in some ways, so I’d say we’re very optimistic, but it’s not done until it’s done.

Operator: Maybe switching from long term to shorter term, I’d love to kind of just talk about anything. How demand’s evolved since the earnings call? Any changes? It’s obviously a very fluid time.

Marty St. George, President, JetBlue Airways: So on the earnings call, I made a comment that we had seen three to four weeks of relatively flat year over year revenue declines, and we were calling that as a new normal. We were guiding to that as a new normal. And I think that’s now seven to eight weeks of sort of a new normal. I will say we had a very good Memorial Day weekend as far as close bookings. For the two days of June we have day to four, we’ve had some pretty good close in bookings.

But I think demand’s been choppy enough that no one’s really ready to make any call that we’re going off of that original baseline.

Operator: One question that I’m sure you’re getting a lot now from investors is if there’s any kind of one time benefit opportunity that you’ve seen from Newark, or maybe that gets washed out by some of the other things going on out of the surface right now.

Marty St. George, President, JetBlue Airways: So we’ve watched the Newark situation very closely. We obviously had an operation in Newark, so we took a hit for our 19 flights there. We did see some benefit. We saw more of the benefit go to LaGuardia and Philly, but we certainly did get some benefit there, but it’s not a gigantic number.

Operator: Okay.

Ursula Hurley, Chief Financial Officer, JetBlue Airways: And we believe it’s transitory, obviously with now the runway being open. Good point.

Operator: Then, on the earnings call you talked about premium loyalty Atlantic still being the best segments within the core business, is that still the case today?

Marty St. George, President, JetBlue Airways: It is. And I think that it’s funny, I think about the secret sauce of JetBlue. When you look at the trends of the industry overall, as far as premium travel versus non premium travel, I think we’re all reporting that premium traffic is doing well and with very strong RASM growth. We said on the call we were high single digits as far as our premium RASM, and the challenge has in back of the airplane. But fundamentally, we’re very confident that as the industry goes through the changes it’s going through, we like our position in the industry right now.

At the core, we are known for great crew members delivering great service. And whether you’re the front of the plane or the back of the plane, that’s an advantage we have over all of our competitors. I’d certainly rather have our our hand of cards right now than the ultra low cost carriers, and I think that will be going forward as we do things like introduce domestic first class, lounges, things like that.

Operator: Yeah, yeah. And how’s the, would you just remind us on the timeline of the domestic retrofits?

Marty St. George, President, JetBlue Airways: So, first talk about the lounge. The first lounge opens by the end of twenty twenty five. We’ll have the Boston lounge opening in mid-twenty twenty six. The first installation of domestic first class will be in the middle, or sort of second quarter ish, second or maybe early third quarter of twenty twenty six. We have supply chain issues, we have certification issues, but we’re full steam ahead on that project.

Operator: Yeah, okay. How are the operations performing this quarter? Know, Newark’s been a challenge, but just overall in the system, guys have made a lot of progress

Marty St. George, President, JetBlue Airways: terms Tuesday we have an operational meeting, and operations are actually in very good shape right now. And again, I give a lot of thanks to our crew members who continue to deliver in a tough ATC environment. Clearly, we had challenges in New York like the rest of the industry did, but I think our people are really stepping up and delivering a great product right now.

Operator: Yeah. You know, kind of similar operations, Ursula, how are you feeling about non fuel cost control quarter to date?

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Good. I’m actually exceptionally proud of the team. We’ve actually hit our controllable cost guide the last six quarters. And here, we sit here in the second quarter, we actually pulled down capacity pretty significantly in the second quarter just to better align with the demand environment and the team’s doing an exceptional job making sure that we still achieve our controllable cost goal. I think the other thing that we’re seeing as a benefit is the operation is performing exceptionally well.

I mean, we’ve had three quarters of A14 increasing year over year. This quarter the operation’s actually performing really well. I think on a completion factor basis we’re up within the quarter about half a point which obviously we’re top of the industry, close to top of the industry right now in terms of completion factor in the second quarter. So naturally when you run a good on time airline costs you know fall out of the business so that’s been a really helpful tailwind as well. So I feel good.

I will also note, we always expected our controllable cost guides to be higher in the first half of the year versus the second half of the year. That’s mainly driven by two things, just timing of maintenance events in the first half of the year as well as a pilot rate step up that we actioned last August that hasn’t fully lapped yet. So again, you know, we’re still striving even to hit our full year initial guide and like I said, really proud of the team getting creative about pulling costs out of the business despite the capacity pulls.

Operator: Yeah, no, absolutely. How, you guys have had a lot of cost initiatives on the hopper on fuel burn optimization, deploying data, science thoughtfully to automate different processes. Can you unpack which of those have been really impactful so far?

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Sure, so one of our priority moves within JET Forward is securing our financial future and we have a plethora of initiatives in order for us to maintain, quite frankly, our cost advantage versus the legacies. So, some of the areas that we’ve seen success is just better utilizing data and artificial intelligence. So we actually, up in our system operations center, we’ve actually created like a digital twin that helps our sys ops team basically foreshadow what could go wrong over the next twenty four hours so that we can get ahead of it from an aircraft placement perspective, a crew perspective, and so that helps us make better decision making in a really timely manner so that we can pivot and execute given the operational challenges. I think another area we’ve seen great success is fuel burn just in general. We’ve got about, you know, 25 plus initiatives across the business, just how do we reduce burn.

Technology that we’ve been using in that area, you know, we call it waves in the sky. It’s to ensure that our pilots are flying the most efficient route from a fuel burn perspective. So really good progress thus far. There’s more initiatives to come. I think the general theme is how do we better leverage technology and AI to improve the timeliness of decision making to help the operation and obviously the financials.

Operator: Marty, earlier you had mentioned some of the supply chain issues in terms of the domestic first class. On that, what are you seeing? The GTF engine’s been a big, obviously been a big headwind. Any progress there in terms of Pratt getting stuff

Ursula Hurley, Chief Financial Officer, JetBlue Airways: out of shop? We originally anticipated having mid to high teens number of aircraft on the ground this year due to the GTF. We are now in the single high digits number of aircraft on the ground, so we’ve seen improvements. You know, we’re holding our breath. We want to see consistency in terms of improvements from Pratt but we’ve been pleased.

I think their supply chain is improving. When the engine goes into the shop, it’s actually coming out slightly earlier than we had anticipated. And just generally speaking, you know, engines are staying on wings slightly longer than we anticipated. So I think those are the three drivers of the improvement. We continue to work collaboratively with Pratt and Whitney and monitor it closely.

We’ve always said that, you know, the Pratt and Whitney GTF challenges was gonna be a tailwind for JetBlue so we’re starting to see some of that benefit.

Operator: And then what Airbus? Have they been delivering the 220s on time?

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Airbus, you know, we continue to work with them. We continue to see aircraft delivery delays whether it be on the two twenty or the A321. Aircraft have been shifting a few months here and there. However, Airbus has been helpful in providing transparency so that we can plan and get ahead of it. So, still believe that we’ll achieve the number of deliveries that we originally anticipated this year.

Operator: And then E190s, are those still on track to be retired after the summer peak?

Ursula Hurley, Chief Financial Officer, JetBlue Airways: They are. So, as a reminder, we ordered the A220 to replace the E190. You know, we expect to have a 30 plus percent unit cost benefit once this fleet transition is complete. I think we currently have nine or 10 E190s still flying around. They will support the summer peak and then after the Labor Day holiday, we will fully have that fleet retired.

So, like I said, we’re looking forward to achieving those run rate savings that we originally anticipated when we entered this fleet transition.

Operator: Nice. Well, I mean, seems like you guys have been actually in a ton of different initiatives over the last eighteen months or so, but it seems like you’re kind of really getting to a place where they’re restarting to pay dividends as we move into ’twenty six and ’twenty seven. A lot of exciting stuff coming down the pipeline. Maybe going back to Paisley, Jamie, do you guys envision this being kind of moving beyond United to other airlines or other travel and leisure companies that you can maybe offer this service to?

Jamie Perry, President of Paisley, JetBlue Airways: Absolutely. We issued a name change sorry, we issued a press release this morning saying that we changed our name from JetBlue Travel Products to Paisley. And that’s very much reflective of the fact that we’re moving from a single customer in JetBlue to a multi customer model. United is obviously the first of those incremental customers and we have a number of others in the hopper. But yeah, we are hopeful and optimistic that we will have many airline partners beyond just JetBlue and United going forward.

Operator: Okay, that’s great. Mean, that something we can expect to learn about more in July maybe, like what the runway is for Paisley?

Jamie Perry, President of Paisley, JetBlue Airways: Will, there is a JetForward update coming I believe in a two Q and A.

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Yeah, we’ll have a JetForward update in July which will be more comprehensive, so we can provide a little more color on just the impact of Blue Sky to JetForward. You know, we do have our hands full in making sure that The United integration into Paisley is done successfully. So that’s definitely the number one priority. But also as Jamie mentioned, you know, we do have an aspiration continue to grow this business and we believe that we’ve got an attractive technology set that could be interesting to other airlines. So that’s definitely on the roadmap as well.

Operator: Do you think about that, was like one year start actually seeing some of the results in the numbers, is that more of a ’26, ’20 ’7 story than, how should we think about the ramp up process?

Jamie Perry, President of Paisley, JetBlue Airways: For Paisley? Yeah, for Paisley. Yeah, we obviously have a ramp up period with United. They also have a ramp down period with their existing partners. So, realistically, you should start to think about incremental United revenue coming online for Paisley next year.

Operator: Okay. Okay, that’s great. Let’s see. So, you had another press release yesterday for Brightline Trains, a partnership down there in Florida. Can you talk about maybe the benefit from that?

I thought one line that was really interesting that caught my eye was how they can help you in IR ops, potentially, of re accommodating passengers.

Marty St. George, President, JetBlue Airways: No, think they’ve built a very interesting network with access directly to Orlando Airport. We’re obviously a very big operator in Fort Lauderdale, if not the biggest, about to be the biggest in Fort Lauderdale. And that connectivity between the two, it’s much easier to do on a train than it is on an airplane on such a short So I think it’s a good deal for them. I think it’s a very good deal for us. We also have 52 other partners.

So partnership is something that we’ve been doing since 02/2007. The one thing I’d stress is we do this in a JetBlue way. So we don’t really do things like codeshare. Other airlines can put their code on us. We generally don’t put our code we do sometimes, but not very often.

We want to do it in a very low cost way. And frankly, I think between what we’re doing in this partnership, what’s happening with Paisley, this new relationship with Connective, I think we’re looking to find opportunities to improve our earnings with very low capital.

Operator: I mean,

Marty St. George, President, JetBlue Airways: if you look at the capital investment in Paisley versus the EBIT impact, it’s de minimis. So we’re actually very optimistic about other ways to make ourselves better for our owners.

Operator: And how, just in the early aftermath of the Blue Sky announcement, have you seen any reaction, have you been surveying some of your TrueBlue core customers? Mean, because I feel like if you can drive greater sign up on the credit card and greater spend, you know, any of that non ticket revenue that you’re getting is.

Marty St. George, President, JetBlue Airways: So it’s a great question, and we’ve just recently switched tech providers for our call centers, And part of what we were able to get is we know every word that’s been said on the phone call, either by our crew members or by our customers. So we pulled every mention of United. And the mentions have been fantastic. People are very optimistic, very much saying, okay, can I redeem my flight to X? Can I move from this United flight I’m on to a JetBlue flight or vice versa?

Customers certainly get it, and we’ve really not communicated anything at all. So we do expect that we will start offering customer benefits hopefully mid to late third quarter. We’ll start some of the benefits, probably late third quarter. So we really haven’t communicated with most of our customers, but just from the news that’s been out there, the customer excitement has been great so far.

Operator: Yeah. How do you think about, just thinking about technology, how do you think about investing on the non aircraft side, like maybe on like the mobile app? Like, are there places where you think that you can maybe improve a little bit just to, whether it’s on the customer experience side or, you know, making it easier to incentivize buy up or

Ursula Hurley, Chief Financial Officer, JetBlue Airways: Yeah, so listen, annually we spend between 100 to 150,000,000 in non aircraft CapEx and quite frankly the majority of those investment dollars do go to technology and just how do we continue to provide optionality for our customers, how do we continue to push folks to the app. We actually have seen a good step up in adoption of the app and just the ease for customers in self serving when things go wrong. So this is definitely an area we continue to be focused in and believe that there’s a high level of return on continuing to invest in technology that’s beneficial to the customer.

Operator: Maybe another on the consumer, have there been any trends or any differences that you’d call out between VFR versus maybe like beach leisure or non VFR type of leisure or managed business, anything that you guys are seeing on that front?

Marty St. George, President, JetBlue Airways: It’s a great question. I would say that in general, the places of strength we’re seeing are the Atlantic and the Latin American market. The Latin American market does tend more to VFR. I’m not sure which is the chicken and which is the egg in that, so I’m not sure I’d call that causal, But we certainly see international hold up better than domestic. The one thing we remember vividly from 02/2008, ’2 thousand and ’9, the war financial crisis, was that VFR was absolutely a very strong point for us at the time.

And the line we’ve used is about how bad things get, you’re still going to see your mom sometimes. So we’re optimistic about VFR, and certainly Latin is doing well. So I think it’s a little bit too early to see if that trend is continuing from what we saw in 02/2008, but I like the diversification of the network. I think that if you look at the diversification between the premium products, certainly with Mint, but also with the eMore product, and the VFR products, I think we have a nice distribution for a fundamentally leisure airline.

Operator: Yeah, yeah. And how do you see there’s been a lot of schedule cuts coming down, especially for the second half of the year. How are you guys seeing competitive capacity from right now?

Marty St. George, President, JetBlue Airways: I mean, trends continue to be good in competitive capacity. Will and this is all public data, so I know nothing other than what I see filed in the systems. But we’ve been pretty aggressive in kind of capacity ourselves. Certainly, as demand has softened, it’s sort of softened from the troughs to the peaks. So we’ve been pretty aggressive pulling Tuesday, Wednesday capacity, Saturday night capacity, things like that.

The ULCCs have been very aggressive in pulling capacity, and I think based on our margins you can sort of understand why. The Legacies, I think, have been less aggressive in pulling capacity. I don’t think they’ve really pulled what they had originally telegraphed they’d pull. But frankly, they’re pulling from a much, much bigger base. So I feel like the trends are generally good.

But frankly, it’s reacting to a reduced demand environment. So it’s not like we were screamingly full before and now we’re just pushing yields up. This is in reaction to the demand environment we see right So I think, I’ve been in this business many, many, many years, and the one thing that’s changed probably since the world financial crisis is a lot more focus on short term results, rather than lost leaders and let’s hope things get better. Hope is not a strategy, action is a strategy. And I think we’re seeing a lot of action now.

Operator: Are there any metrics that you track internally, Marty, that give you confidence that okay, maybe we’re seeing a rebound in demand or that like, just like, are you like, can I get like a check engine light or like, what do you look at for health of the booking career?

Marty St. George, President, JetBlue Airways: Well, mean, think that historically we look at our own bookings, we look at competitive bookings, and a lot of people in this room historically have used the ACTDS data, which is now only available to airlines, but we use that data very regularly. I think in the recent crisis we’ve been very aggressive in working with our credit card data, not just the full stack of data we get from Barclays about our own credit card, but we have a very good relationship with MasterCard, and MasterCard has been very open at providing us some high level data, which we get for not just air travel, lodging, cruises, things like that. We’re also getting for consumer durables, food, gas, everything. So I think as we were looking at the demand cuts, we kind of wanted to get a good idea of what’s happening for bigger consumer sentiment. And I think it’s interesting, it looks a lot like 02/2008, ’2 thousand and ’9, which is historically when you get into an economic slowdown, air travel is the first thing to come down, And unfortunately, going to be the last thing to come back.

But I think it’s following very much the trend as far as what we’ve seen historically. And we’ll see, we’re now a quarter and a half, two quarters into it. We’ll see if we start seeing other sectors fall. But we watch that data very, very closely.

Operator: Yeah. I think the industry is going be well positioned on the other side of this just with how tight supply is and a lot of the video stuff you guys are working on.

Marty St. George, President, JetBlue Airways: Yeah, mean frankly, you talked earlier, Tom, about supply chain. If there’s ever a time for manufacturers to have trouble delivering airplanes, this is probably

Ursula Hurley, Chief Financial Officer, JetBlue Airways: a very

Marty St. George, President, JetBlue Airways: good time for from that perspective, I think the planets for once in their lives are aligned as far as where we need to be. Frankly, in the long term, I think this is an issue overall that’s much more focused on returning to our owners. And I think we see each airline independently acting and trying to make that so.

Operator: Which is great. I think that’s a great place to close it on. Unless you’d to make any final remarks.

Marty St. George, President, JetBlue Airways: I don’t. I mean, I’d say that I hope everyone in this room are JetBlue customers. If not, you’re missing something big. We are very excited about Blue Sky, and frankly, if you look at the path we laid out last year with Jet Forward, we’re optimistic about our future.

Operator: Yeah, we’re very excited. I’m looking forward to my next flight on a big cabin.

Marty St. George, President, JetBlue Airways: Great, awesome. Thank you.

Operator: Thanks so much, everybody. Thanks, guys.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.