JETBLUE AIRWAYS CORPORATION Item 7.01 Regulation FD Disclosure.
JetBlue's operational performance has improved steadily since early April as a result of the investments the Company has made to enhance operational reliability into the summer peak. While the industry continues to face some challenging operating conditions mainly due to weather and air traffic control disruption,JetBlue's completion factor in May is trending above 98% compared to approximately 90% in the first three weeks of April. As a result,JetBlue now expects flown capacity for the second quarter of 2022 to increase in a range between 2% and 3% compared to the second quarter of 2019 ("year over three"). This compares to the Company's prior guidance for capacity to range between 0% and 3% year over three. The demand environment continues to be strong, with bookings exceeding Company expectations. To date, revenue for the month of June is shaping up to be meaningfully better compared to earlier months in the quarter, and we expect June revenue per available seat mile to be up more than 20% year over three.JetBlue now expects revenue for the second quarter of 2022 to be at or above the high-end of its prior guidance of a revenue increase between 11% and 16%, year over three.JetBlue continues to expect record revenue this summer. The Company continues to expect CASM Ex-Fuel(1) for the second quarter of 2022 to increase between 15% and 17%, year over three. As ofMay 23, 2022 ,JetBlue has not entered into forward fuel derivative contracts to hedge its fuel consumption for the first quarter of 2022. Based on the forward curve as ofMay 23, 2022 ,JetBlue expects an average all-in price per gallon of fuel of$4.08 in the second quarter of 2022.
The table below provides
Second Quarter Outlook Estimated 2Q 2022 Previous Estimated 2Q 2022
Capacity and Revenue
Available Seat Miles (ASMs) vs 2019 2% - 3% 0% - 3%
Revenue vs 2019 At or above high-end of 11% - 16%
previous guidance
Expense
CASM Ex-Fuel(1) (Non-GAAP) vs 2019 15% - 17% 15% - 17%
Estimated Fuel Price per Gallon $4.08 $3.79
(1) Operating expenses per available seat mile, or CASM, is a common metric used
in the airline industry. We exclude aircraft fuel and related taxes, operating
expenses related to other non-airline business, such as our subsidiaries,
JetBlue Technology Ventures and JetBlue Travel Products, and special items from
operating expenses to determine CASM Ex-Fuel, which is a non-GAAP financial
measure.
The information included under this Item 7.01 is being furnished and shall not
be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act"), nor shall such information be deemed incorporated by
reference in any filing under the Securities Act of 1933 (the "Securities Act")
or the Exchange Act, except as may be expressly set forth by specific reference
in such filing.
Forward Looking Statements
This Report (or otherwise made by JetBlue or on JetBlue's behalf) contain
various forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, which
represent our management's beliefs and assumptions concerning future events.
These statements are intended to qualify for the "safe harbor" from liability
established by the Private Securities Litigation Reform Act of 1995. When used
in this document and in documents incorporated herein by reference, the words
"expects," "plans," "anticipates," "indicates," "believes," "forecast,"
"guidance," "outlook," "may," "will," "should," "seeks," "targets" and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements involve risks, uncertainties and assumptions, and are based on
information currently available to us. Actual results may differ materially from
those expressed in the forward-looking statements due to many factors,
including, without limitation, the coronavirus ("COVID-19") pandemic including
existing and new variants, and the outbreak of any other disease or similar
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public health threat that affects travel demand or behavior; restrictions on our
business related to the financing we accepted under various federal government
support programs such as the Coronavirus Aid, Relief, and Economic Security Act,
the Consolidated Appropriations Act, and the American Rescue Plan Act; our
significant fixed obligations and substantial indebtedness; risk associated with
execution of our strategic operating plans in the near-term and long-term; the
recording of a material impairment loss of tangible or intangible assets; our
extremely competitive industry; volatility in financial and credit markets which
could affect our ability to obtain debt and/or lease financing or to raise funds
through debt or equity issuances; volatility in fuel prices, maintenance costs
and interest rates; our reliance on high daily aircraft utilization; our ability
to implement our growth strategy; our ability to attract and retain qualified
personnel and maintain our culture as we grow; our reliance on a limited number
of suppliers, including for aircraft, aircraft engines and parts and
vulnerability to delays by those suppliers; our dependence on the New York and
Boston metropolitan markets and the effect of increased congestion in these
markets; our reliance on automated systems and technology; the outcome of the
lawsuit filed by the Department of Justice and certain state Attorneys General
against us related to our Northeast Alliance entered into with American
Airlines , our being subject to potential unionization, work stoppages, slowdowns
or increased labor costs; our presence in some international emerging markets
that may experience political or economic instability or may subject us to legal
risk; reputational and business risk from information security breaches or
cyber-attacks; changes in or additional domestic or foreign government
regulation, including new or increased tariffs; changes in our industry due to
other airlines' financial condition; acts of war or terrorism; global economic
conditions or an economic downturn leading to a continuing or accelerated
decrease in demand for air travel; adverse weather conditions or natural
disasters; and external geopolitical events and conditions; the outcome of any
discussions between JetBlue and Spirit Airlines, Inc. ("Spirit") with respect to
a possible transaction, including the possibility that the parties will not
agree to pursue a business combination transaction or that the terms of any such
transaction will be materially different from those described herein or
previously announced; the conditions to the completion of the possible
transaction, including the receipt of any required stockholder and regulatory
approvals, and, in particular, our expectation as to the likelihood of receipt
of antitrust approvals; JetBlue's ability to finance the possible transaction
and the indebtedness JetBlue expects to incur in connection with the possible
transaction; the possibility that JetBlue may be unable to achieve expected
synergies and operating efficiencies within the expected timeframes or at all
and to successfully integrate Spirit's operations with those of JetBlue ; and the
possibility that such integration may be more difficult, time-consuming or
costly than expected or that operating costs and business disruption (including,
without limitation, disruptions in relationships with employees, customers or
suppliers) may be greater than expected in connection with the possible
transaction. It is routine for our internal projections and expectations to
change as the year or each quarter in the year progresses, and therefore it
should be clearly understood that the internal projections, beliefs, and
assumptions upon which we base our expectations may change prior to the end of
each quarter or year. Any outlook or forecasts in this document have been
prepared without taking into account or consideration a possible transaction
with Spirit.
Given the risks and uncertainties surrounding forward-looking statements, you
should not place undue reliance on these statements. You should understand that
many important factors, in addition to those discussed or incorporated by
reference in this Report, could cause our results to differ materially from
those expressed in the forward-looking statements. In light of these risks and
uncertainties, the forward-looking events discussed in this Report might not
occur. Our forward-looking statements speak only as of the date of this Report.
Other than as required by law, we undertake no obligation to update or revise
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Reconciliation of Non-GAAP Financial Measures
This Report includes forward-looking non-GAAP financial measures. Non-GAAP financial measures are financial measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles inthe United States , or GAAP. We believe these non-GAAP financial measures provide a meaningful comparison of our results to others in the airline industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. With respect toJetBlue's CASM Ex-Fuel guidance,JetBlue is unable to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors. Accordingly, a reconciliation to CASM is not available without unreasonable effort.
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