Item 7.01 Regulation FD Disclosure.
JetBlue Airways Corporation ("JetBlue" or the "Company") announced today an
operational and financial update of its expected fourth quarter 2022 results.
JetBlue's operational performance has remained strong with a solid completion
factor quarter-to-date, including nearly 100% during the November holiday travel
period. The Company continues to expect flown capacity for the fourth quarter of
2022 to increase 1% to 4% compared to the third quarter of 2019 ("year over
three").
Underlying demand trends continue to be strong with healthy load factors and
yields above 2019 levels for both trough and peak travel periods. JetBlue also
continues to generate strong ancillary revenue performance, with exceptional
co-brand performance which continues to reach record levels. However, JetBlue
experienced a negative impact from Hurricane Nicole in November, and the
expected very strong close-in demand for December reflected in its prior outlook
has materialized below expectations. In addition, the adverse impact of the
fourth quarter holiday calendar timing this year is greater than previously
forecasted. As a result, JetBlue now expects revenue per available seat mile for
the fourth quarter of 2022 to be at the low-end of its prior guidance range for
a 15% to 19% increase.
The Company continues to expect CASM Ex-Fuel (1) for the fourth quarter of 2022
to increase between 8.5% and 10.5%, year over three. Based on the forward curve
as of December 9, 2022, JetBlue continues to expect an average all-in price per
gallon of fuel of $3.65 in the fourth quarter of 2022.
(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 Current 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," "intends," "anticipates," "indicates," "remains,"
"believes," "estimates," "forecast," "guidance," "outlook," "may," "will,"
"should," "seeks," "goals," "targets" and similar expressions are intended to
identify forward-looking statements. Additionally, forward-looking statements
include statements that do not relate solely to historical facts, such as
statements which identify uncertainties or trends, discuss the possible future
effects of current known trends or uncertainties, or which indicate that the
future effects of known trends or uncertainties cannot be predicted, guaranteed,
or assured. 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 COVID-19
pandemic including existing and new variants, and the outbreak of any other
disease or similar 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; external geopolitical events and conditions; the occurrence of any
event, change or other circumstances that could give rise to the right of
JetBlue or Spirit Airlines Inc. ("Spirit") or both of them to terminate the
Merger Agreement; failure to obtain applicable regulatory approval in a timely
manner or otherwise and the potential financial consequences thereof; failure to
satisfy other closing conditions to the transactions with Spirit; failure of the
parties to consummate the transaction; JetBlue's ability to finance the
transaction with Spirit and the indebtedness JetBlue expects to incur in
connection with the 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; 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 transaction with Spirit; failure to realize anticipated benefits of the
combined operations; demand for the combined company's services; the growth,
change and competitive landscape of the markets in which the combined company
participates; expected seasonality trends; diversion of managements' attention
from ongoing business operations and opportunities; potential adverse reactions
or changes to business or employee relationships, including those resulting from
the announcement or completion of the transaction with Spirit; risks related to
investor and rating agency perceptions of each of the parties and their
respective business, operations, financial condition and the industry in which
they operate; risks related to the potential impact of general economic,
political and market factors on the companies or the transaction with Spirit;
and ongoing and increase in costs related to IT network security. 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 the 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 in this Current 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 Current Report might not occur. Further
information concerning these and other factors is contained in JetBlue's and
filings with the Securities and Exchange Commission, or SEC, including but not
limited to, JetBlue's 2021 Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q. Our forward-looking statements speak only as of the date of this
Current 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 in the 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 to JetBlue'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.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses