JetBlue(US:JBLU)2023-01-26 16:30Financial Data and Key Metrics Changes - JetBlue reported an adjusted pre-tax income of $69 million for Q4 2022, with earnings per share of $0.22, marking significant progress from the previous year [7][26] - The company achieved a record annual revenue result for 2022, reflecting strong demand for its services [7][10] - For 2023, JetBlue expects adjusted earnings per share to range between $0.70 to $1, indicating anticipated improvement throughout the year [12][33] Business Line Data and Key Metrics Changes - JetBlue Travel Products saw a revenue growth of 59% compared to 2021 and 136% compared to 2019, nearing a target of $100 million run rate EBIT [14] - Capacity grew by 2.4% year-over-year in Q4 2022, with expectations for a 5.5% to 8.5% increase in 2023 [17][19] - Revenue per available seat mile increased by 16.1% year-over-year in Q4 2022, driven by strong demand [19] Market Data and Key Metrics Changes - The Northeast Alliance (NEA) is expected to significantly contribute to JetBlue's growth, with plans to triple daily departures compared to 2019 levels [37][64] - The company anticipates continued revenue strength in the Northeast, with a focus on both business and leisure travel [64] Company Strategy and Development Direction - JetBlue is implementing a structural cost program targeting $150 million to $200 million in savings by the end of 2024 to offset inflationary pressures [8][29] - The company aims to restore margins towards 2019 levels throughout 2023 while preparing for the acquisition of Spirit Airlines, which is expected to close in the first half of 2024 [11][33] - JetBlue's ESG efforts include a commitment to reduce per seat emissions by half by 2035 compared to 2019 levels [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties while focusing on operational and financial foundations [6][10] - The outlook for 2023 includes expectations for strong revenue growth driven by leisure demand and network initiatives [20][33] - Management acknowledged the challenges posed by air traffic control delays, particularly in the Northeast, and plans to maintain a conservative operational approach [46] Other Important Information - JetBlue's liquidity at the end of Q4 2022 was $1.6 billion, with plans for $1.3 billion in capital expenditures in 2023 [30][31] - The company is actively engaging in sustainable aviation fuel sourcing, aiming for 10% SAF usage by 2030 [40] Q&A Session Summary Question: Financial details on the NEA ramp-up - Management did not provide specific financials but noted strong growth in daily departures and connecting passengers [37] Question: Sustainable aviation fuel sourcing - Management confirmed active engagement with SAF producers and noted industry targets for SAF usage [40] Question: Capacity growth and productivity improvements - JetBlue expects improved utilization relative to 2022 but will not return to 2019 levels due to operational conservatism [44][46] Question: NEA's impact on corporate travel revenue - Management indicated that JetBlue is gaining market share in the Northeast, benefiting from the NEA despite overall corporate travel revenue challenges [62] Question: Normalized earnings power expectations - Management aims to achieve margins close to 2019 levels by the end of 2023, with a focus on long-term growth [67]