Jetblue Airways (NasdaqGS:JBLU) Q4 2025 Earnings call January 27, 2026 10:00 AM ET Company ParticipantsJoanna Geraghty - CEOKoosh Patel - Head of Investor RelationsMarty St. George - PresidentUrsula Hurley - CFOConference Call ParticipantsBrandon Oglenski - AnalystCatherine O'Brien - AnalystChris Stathoulopoulos - AnalystConnor Cunningham - AnalystDan McKenzie - AnalystDuane Pfennigwerth - AnalystJamie Baker - AnalystMike Linenberg - Managing Director and AnalystRavi Shanker - AnalystSavi Syth - AnalystScot ...

Financial Performance & Outlook - JetBlue progressed its JetForward transformation, delivering $305 million of incremental EBIT in 2025[6,19] - The company maintained a solid liquidity position of $2.5 billion, representing approximately 27% of trailing twelve-month revenue, and ~$6.5 billion in unencumbered assets[7] - JetBlue expects to drive $310 million of incremental EBIT in 2026, for a total of $615 million from JetForward initiatives[21] - The airline anticipates generating incremental EBIT of $850 million - $950 million for FY 2027 from JetForward[21,38] - JetBlue strategically reduced 2026-2029 capex by approximately $3 billion since 2023, with an upcoming capex profile of less than $1 billion annually[38] - The company's outlook supports breakeven or better adjusted operating margin in 2026[39] Revenue & Cost Management - 4Q25 RASM (Revenue per Available Seat Mile) finished positive, 2.2 percentage points better than guidance midpoint, driven by strong underlying demand and ancillary and loyalty revenue performing above expectations[12] - Disruptions reduced ASMs (Available Seat Miles) by nearly 2 percentage points in 4Q, impacting CASM ex-fuel (Cost per Available Seat Mile, excluding fuel) by over 2 percentage points[12,34] - JetBlue achieved 2025 CASM ex-Fuel in-line with initial guidance at 6.2%[31] - The company expects 2026 CASM ex-fuel growth to be between 1% and 3%[31,39] Strategic Initiatives - Net Promoter Score (NPS) increased eight points year-over-year as investments in operational reliability ramped[9] - JetBlue launched the initial phase of its collaboration with United Airlines, called Blue Sky, featuring reciprocal loyalty accrual and redemption[9]

Core Viewpoint - JetBlue Airways Corporation's stock fell approximately 12% following a cautious outlook for 2025, despite a smaller-than-expected loss in Q3 2025, primarily due to rising costs and intense competition [2] Operational Performance - The airline's operating fleet consisted of 283 aircraft, all A220s and A320-family jets, with system capacity increasing by 0.9% year-over-year [3] - Load factor decreased to 85.1% from 86.6% the previous year, while revenue per available seat mile (RASM) declined by 2.7% year-over-year [3] - JetBlue's Mint® offering outperformed the core cabin, with premium RASM six points higher than core, indicating a growing preference for upgraded seating [4] Financial Performance - Operating expenses rose by 0.8% year-over-year to $2.42 billion, with total fuel expense declining by 7.6% to $539 million due to a 7% decrease in average fuel price [5] - The airline ended the quarter with cash and cash equivalents of $2.4 billion against total debt of $8.5 billion, with capital expenditure at $281 million, below the revised estimate of $325 million [6] Outlook and Strategy - For Q4 2025, JetBlue expects capacity to fluctuate between a decline of 0.75% and an increase of 2.25% year-over-year, with RASM anticipated to decline between 4% and flat compared to the prior year [7] - The airline improved its full-year 2025 cost guidance, targeting CASM ex-fuel growth of 5% to 6%, while capital expenditure is expected to remain below $1 billion annually through the end of the decade [8] Network Expansion and Product Enhancements - JetBlue plans to launch 17 new routes and increase frequencies on 12 existing markets in Fort Lauderdale, representing a 35% year-over-year schedule increase [9] - The airline will introduce a domestic first-class product in 2026 and open new JetBlue Lounges at JFK and Boston in late 2025 and 2026, respectively [9] - A partnership with Amazon's Project Kuiper aims to enhance in-flight connectivity starting in 2027, while collaboration with United Airlines' Blue Sky will improve customer loyalty and market reach [9] Conclusion - Despite a decent Q3 performance, JetBlue faces challenges in the broader U.S. airline sector, struggling to achieve profitability while managing costs and capacity [10] - The focus on premium services and successful execution of initiatives like JetForward and network expansion will be critical for regaining investor confidence [10]

Financial Performance & Outlook - 3Q25 performance met or exceeded guidance midpoints[7] - CASM ex-fuel up 3.7% year-over-year[9] - Adjusted operating margin three points better than implied by July guidance ranges[9] - The company expects capital expenditures to trend at or below $1 billion annually beginning in 2026[35] - Interest expense is estimated at approximately $590 million for the full year 2025, reduced by about $10 million[36] Revenue & Demand - 3Q2025 ASMs increased by 0.9% compared to 3Q2024, while guidance was between 0.0% and 1.0%[19] - 3Q unit revenues exceeded midpoint of revised guidance[22] - TrueBlue revenue was up 12% year-over-year[25] Strategic Initiatives - The company plans to launch 17 new routes and increase frequency on 12 high-demand markets from Fort Lauderdale in 2025[12] - Implementation of Blue Sky with United Airlines is on track, with reciprocal loyalty point accrual & redemption launched[9] - A220s represent approximately 25% unit cost improvement versus E190s[33]

Financial Performance & Targets - JetBlue successfully delivered $180 million of incremental EBIT benefit from JetForward through the first half of 2025 and is on track to achieve $290 million by year-end[4] - The company is targeting $850-950 million in incremental EBIT by 2027 through JetForward initiatives[5] - JetBlue realized $25 million in savings in the first half of 2025 from cost transformation initiatives[5] - Announcement of Blue Sky and Paisly upsized JetForward, adding $50 million incremental EBIT to initial target range[5] Network & Product Strategy - JetBlue has redeployed over 20% of its network since the beginning of 2024, reinvesting in Northeast, Florida, and Puerto Rico franchises and redeploying to high-performing leisure & VFR markets[5] - JetBlue anticipates offering its largest ever schedule with 113 peak departures to 49 destinations this winter from Fort Lauderdale, up 35% year-over-year[7] Operational Improvements - JetBlue initiated a multi-year investment to improve on-time performance and was recognized by the WSJ as the most improved in their '24 rankings[5] - Net Promoter Score was up double digits year-over-year in the first half of 2025[5] Capital Expenditure & Financing - JetBlue deferred approximately $3 billion in capital expenditures into the 2030s and executed over $3 billion in financing[5]

Financial Performance & Outlook - JetBlue delivered a positive operating margin in 2Q25, meeting or exceeding guidance ranges[6] - JetForward program is increasing its target by $50 million, aiming for $850-950 million in EBIT by 2027[9, 11] - Capital expenditures are expected to trend below $1 billion annually from 2026 through the end of the decade[24] Revenue & Demand - Year-over-year RASM decreased by 1.5% in 2Q25, but exceeded the guidance range[8, 15] - Revenue generated within 14 days of travel increased by 7% year-over-year[20] - 3Q25 RASM is guided to be between -6.0% and -2.0% year-over-year[16] Cost Management & Fleet - CASM ex-Fuel increased by 6.0% year-over-year in 2Q25, outperforming the better end of the guidance range[8] - The company expects AOGs (Aircraft On Ground) to average below 10 for 2025, compared to mid-to-high teens previously[26] - JetBlue is pausing four of 10 planned A320 restyles and selling two XLRs to avoid an orphan fleet[25] Strategic Initiatives - Blue Sky collaboration with United Airlines is expected to add $50 million in incremental EBIT to JetForward[8, 13] - The company realized a total of $90 million incremental EBIT in 1H25 on top of the $90 million EBIT captured in 2024[11]

Financial Performance & Outlook - 1Q25 capacity decreased by 4.3% YoY, at the low end of the initial guidance range, due to self-help actions to reduce trough capacity[9] - 1Q25 RASM increased by 1.3% YoY, reflecting softer off-peak revenue trends[9] - 1Q25 CASM ex-Fuel increased by 8.3% YoY, beating the initial midpoint due to cost savings from operational execution[9] - The company is targeting $800-900 million in incremental EBIT through 2027 via JetForward initiatives[10] - The company ended 1Q with $3.8 billion in liquidity, supported by a strategic debt raise in 2024[29] Strategic Initiatives & Adjustments - JetForward initiatives are on track, with most achieving 1Q expectations, focusing on network adjustments and reliability investments[15] - The company is taking action to balance supply with demand, including capacity reductions in 1H25[21, 23] - The company deferred approximately $3.0 billion in capex in 2024, shifting 44 Airbus A321neo deliveries to 2030 and beyond[29] Guidance - 2Q25 ASM guidance is projected to decrease by 3.5% to 0.5% YoY[19] - 2Q25 RASM guidance is projected to decrease by 7.5% to 3.5% YoY[19] - 2025 capital expenditures are expected to be approximately $1.3 billion[36]