Good morning. My name is Brittany, and I would like to welcome everyone to the JetBlue Airways' Third Quarter 2024 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. I would now like to turn the call over to JetBlue's Director of Investor Relations, Koosh Patel. Please go ahead, sir.

Thanks, Brittany. Good morning, everyone, and thanks for joining our third quarter 2024 earnings call. This morning, we issued our earnings release and a presentation that we will reference during this call. All of those documents are available on our website at investor.jetblue.com and on the SEC's website at www.sec.gov. In New York to discuss our results are Joanna Geraghty, our Chief Executive Officer, Marty St. George, our President, and Ursula Hurley, our Chief Financial Officer. During today's call, we'll make forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding our fourth quarter and full year 2024 financial outlook and future results of operations and financial position, including long-term financial targets, industry and market trends, expectations with respect to tailwinds and headwinds, our ability to achieve operational and financial targets, business strategy, and plans for future operations, and the associated impacts on our business. All such forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those expressed or provided in these statements. Please refer to our most recent earnings release as well as our fiscal year 2023 10-K and other filings for a more detailed discussion of risks and uncertainties that could cause the actual results to differ materially from those contained in our forward-looking statements. The statements made during this call are made only as of the date of the call and other than as may be required by law, we undertake no obligation to update the information. Investors should not place undue reliance on these forward-looking statements. Also, during the course of our call, we may discuss certain non-GAAP financial measures. For an explanation of these non-GAAP measures and a reconciliation of corresponding GAAP measures, please refer to our earnings release, a copy of which is available at our website on sec.gov. Now, I'd like to turn the call over to Joanna Geraghty, JetBlue's CEO.

Thank you, Koosh. Good morning, everyone, and thank you for joining us today for our third quarter 2024 earnings call. The team continues to work hard to execute on our multiyear strategy, JetForward, with encouraging early results. This summer, efforts to deliver reliable and caring service, a core tenet of JetForward, resulted in year-over-year improvements across key reliability and customer metrics. All these investments are showing signs of traction. The results would not be possible without the dedication of our 23,000 crew members, who showed incredible resilience and professionalism throughout the busy summer travel period and in the face of Hurricane Helene and Milton. We have thousands of crew members that live directly in the path of these storms and even faced with uncertainty outside of work, they still showed up for their fellow crew members and customers. And for that, we all thank you. The progress we've made this year is encouraging. And in the third quarter, our operating margin improved five points year-over-year and five points versus our initial expectations for the quarter. We remain committed to achieving our financial targets. And for the full year, we are improving our revenue guidance midpoint by half a point, and also maintaining the CASM ex-fuel target range we set at the beginning of the year. We are progressing toward our goals every day, but there is still significant work ahead on our path to full-year operating profitability. Now turning to slide 4. Reliable and caring service drives choice, satisfaction, and cost savings, and we believe that operational performance underpins the success of JetForward. In the third quarter, we built on operational achievements from the second quarter to deliver exceptional year-over-year improvements in A14 and completion factor. Compared to last year, A14 was up over 12 points, and completion factor was up nearly two points on the quarter. Additionally, the operation was particularly resilient during both Hurricane Sally and Milton, returning to regular operations with minimal follow-on disruption. This quarter's improved operational performance drove a double-digit increase in Net Promoter Score year-over-year. A reminder that operational reliability is a key driver of customer choice and satisfaction and is essential to delivering a premium customer experience while continuing to build long-standing relationships with our customers. Revenue performance was strong in the third quarter and was bolstered by the continued success of our 2024 revenue initiatives. Progress from changes to our Blue Basic carry-on baggage policy, which was announced in June and went live in September, is performing ahead of expectations. And across all initiatives, we've realized $275 million of the $300 million revenue target set at the beginning of the year. Our premium offerings between preferred seating, even more space, and Mint all continue to perform well, further evidence that our customers' desire for premium offerings is healthy and growing. On the cost side, better-than-anticipated operational performance, coupled with a shift of expenses for the fourth quarter, resulted in CASM ex-fuel beating the midpoint of our initial third quarter guidance by approximately two points. Over the quarter, we also took substantial steps to secure our financial future, raising over $3 billion of debt to allow us to retire a portion of our existing debt, pre-fund 2024 and 2025 CapEx, and provide the necessary runway to execute on JetForward. Moving to the fourth quarter, we expect the relatively improved macro backdrop in our core geographies, especially in Latin, alongside healthy underlying demand and our own self-help capacity trimming to continue driving positive unit revenues through the second half of the year. At the same time, we expect a large portion of our announced network initiatives to come online over the quarter. As we have previously communicated, these changes will take time to ramp, and the RASM benefit will be modest system-wide in the fourth quarter, with redeployments expected to mature throughout 2025. We continue to expect positive year-over-year unit revenue in the quarter, though we anticipate that transitory events will impact our sequential year-over-year RASM progression from the third quarter. We forecast that the disruption to travel and forward bookings from Hurricane Milton, combined with pressure from the election, will negatively impact our RASM performance by about two points. As we head into 2025, we remain confident in the underlying supply and demand backdrop, especially as our JetForward initiatives continue to deliver more value. In the fourth quarter, our year-over-year unit costs also faced transitory headwinds and are expected to take a temporary step up due primarily to the timing of expenses over the year. This should not be viewed as the unit cost levels we are expecting for 2025. Long-term capacity planning continues to be challenged by flat aircraft on the ground, and we remain in discussions over future AOGs, expectations, and compensation. As a reminder, we expect capacity to be roughly flat year-over-year in 2025. Not having clear line of sight to our longer-term capacity is certainly frustrating, but we must remain focused on controlling what we can, and this is at the heart of JetForward. On Slide 5, you can see that we've maintained our bias toward action. Over the quarter, we have made substantial progress on our JetForward plan. Last month, we announced enhancements to our loyalty and airport experience to offer products and perks our customers value. These enhancements include the introduction of lounges at JFK Terminal 5, opening at the end of 2025, and at Boston Logan, opening soon thereafter, as well as the introduction of a premium co-branded credit card. Today, we are announcing additional steps to better match our onboard product to what our customers value, including a further differentiated premium extra legroom offering and a more intuitive purchasing experience for that product. You will hear more from Marty on this topic. I am proud of the progress we've made on these key initiatives, all aligned with our JetForward strategy, which provides a clear roadmap to delivering value to all our stakeholders. In many ways, we are returning to the core strengths that made JetBlue one of the industry's most beloved brands. At the same time, we are rapidly evolving to compete more effectively in a transformed competitive landscape. By consistently delivering reliable service, focusing on our East Coast leisure franchises, and offering compelling new product options to customers, we expect to be well-positioned to deliver on our mission of bringing humanity back to air travel. With that in mind, I'm excited about the future of our business, and I am confident that you'll share my enthusiasm for the next phases of JetForward as we work toward delivering our goal of $800 million to $900 million in incremental EBIT and expanding margins, all while continuing to meet the needs of our shareholders, crew members, and our customers. Now I'll hand it over to Marty to discuss our commercial progress.

Thank you, Joanna, and thank you to our crew members for their service and dedication to JetBlue. Our crew members differentiate us, and I'm extremely proud of the way they continue to deliver caring service in the face of challenges to our industry, like Hurricane Helene and Milton. They've also managed an immense amount of network change over the past nine months as we continue to execute JetForward and build the best East Coast leisure network. As part of this network recalibration, we have announced and implemented over 50 route exits and 15 Blue City closures. Just last week, we officially left Burbank, Charlotte, Minneapolis, San Antonio, and Tallahassee. I know these actions are tough for crew members, especially those based in those cities, and also for customers who love our brand. But these decisions are a necessary part of our plan to return to sustained profitability. We must have profits in order to serve our mission, and we simply cannot tolerate perpetually loss-making operations. Every aircraft must continue to earn its way into the network. In total, the redeployments announced and executed this year represented over 20% of our network and have freed up aircraft to serve markets where we perform the best, origin markets in the East flying to Florida, the Caribbean, transcontinental, and to Europe. These routes serve the large majority of our customers in our core geographies who know our brand and where we can and have built scale locally. To better serve these franchises and reinforce our deep and relevant East Coast leisure network, we have announced service to seven new Blue cities since the start of the year. Blue City openings in Manchester, New Hampshire, and Islip, New York, leverage our brand awareness and regional relevance in geographies where we have a loyal customer base. As we continue to adjust our network, we plan to focus our efforts on serving needs in similar markets, such as Providence and Hartford, where in the fourth quarter, we are operating our largest schedules ever. In Providence, we expect to be up nearly 200% in seats year-over-year and in Hartford more than 30% year-over-year, further deepening our East Coast leisure network. We also remain committed to better matching our onboard products to the needs of our customers who have increasingly asked for a more premium experience. Today, we are announcing another JetForward milestone in the priority move products and perks customers value. As we have mentioned, even more space has performed exceptionally well as interest in premium options continues to be strong. We believe that we can build on this success to attract more customers in the premium leisure segment and capture additional revenue by evolving how we merchandise and sell our even more space seats. Starting in mid-November, we plan to give even more space greater visibility in the booking process by offering it to customers directly on the flight search results page on jetblue.com, in addition to later in the booking process. As we move into 2025, we plan to rebrand the offering even more and package new benefits and amenities with the extra legroom seat. By making it easier for customers to find and book an enhanced offering, we expect to strengthen JetBlue's competitive position in the premium leisure segment and deliver even more value to our customers. We are also working to ensure our customers have a premium experience on the ground. Our recent announcements to bring lounges to JFK Terminal 5 and to Boston Logan and to offer a premium co-branded credit card will enable us to serve the premium leisure customer in a way we have not before and allow our loyalty and airport experience to complement the reliable service customers expect to receive on board. Throughout the travel experience, it is clear that we are quickly moving to address gaps and serve the full spectrum of leisure customers, but we are not yet finished and we expect to make further exciting product and perks announcements over the coming months. Now, turning to Slide 7 to discuss third-quarter revenue performance and our outlook for the fourth quarter. Reliability initiatives drove higher-than-expected completion factor and capacity for the period, with capacity finishing down 3.6% versus the midpoint of our initial guidance of down 4.5%. Over the third quarter, we also took self-help capacity measures that included a day we cut during the trough, and in September, we were down nearly 100 flights Monday, Wednesday, and Saturday versus peak days, better matching our flying with customer demand. These thoughtful capacity pulls, combined with an improving competitive capacity environment, healthy demand close in and during peaks, and the continued success of our 2024 revenue initiatives, support a positive year-over-year RASM of 4.3% for the quarter. Unit revenue improved across all geographies in the third quarter, where the Latin recovery was the most substantial, with year-over-year overlapping competitive capacity in the region, 7 points improved versus last quarter. Peak performance remains healthy, and as we previously announced, third-quarter revenue was aided incrementally by 1 point from the industry-wide CrowdStrike event in July. Our peak performance also improved relative to our expectations in September, supported by our trough capacity reductions. Preferred seating and seasonal checked bag pricing, as well as our Blue Basic baggage policy change, also contributed to the revenue progress over the quarter. Our premium segments, even more space and Mint, continue to outperform with revenue up double-digits year-over-year. Transatlantic performance improved over the summer peak, with PRASM in the third quarter up high single-digits year-over-year or nearly 9% more ASMs. We are encouraged by the ramp of these markets, but have also worked to further seasonalize our transatlantic schedule, allowing us to redeploy high ROI net aircraft to the Sun & Sand when weather in Northern Europe turns. Our TrueBlue customer base continues to grow and increase their share of wallet on JetBlue flights. In the third quarter, nearly half of our customer flight revenue came from TrueBlue members. The deepened engagement and sustained strength in our co-brand portfolio contributed to an 11% growth in royalty revenue versus last year. The improvements we've made to our TrueBlue and Mosaic programs over the past year now make it one of the most attractive programs for introductory elite status members, which is reflected in the record number of both our customers and our competitive customers who have chosen to earn status with JetBlue this year. The TrueBlue value proposition continues to improve, and the addition of new partnerships, lounges, and product offerings, such as the premium card, will continue to bolster that proposition. The work the team is doing to reward and attract customers, along with the continued evolution of our network to further match flying to the preferences of our TrueBlue customer base, leaves us excited about the trajectory and growth potential for our program. Shifting to the fourth quarter, we have made incremental trough capacity adjustments. As a result, fourth-quarter capacity is planned to be down 7% to down 4% year-over-year. We are also comping against the perfect completion factor in the fourth quarter of last year. While we had hoped to perform similarly this quarter, the tropical weather environment has been more challenging than last year. For the full year, capacity is planned to be down 4.5% to down 2.5%. In the fourth quarter, we expect revenue to be down 7% to down 3% year-over-year, which implies positive unit revenue at the midpoint of our revenue and capacity ranges. Positive fourth-quarter RASM is supported by trends continuing from the third quarter, healthy peak demand, and the increasingly constructive industry supply backdrop and the progress of our $300 million revenue initiatives. When adjusting for the CrowdStrike benefit in the third quarter, and the negative impacts of Hurricane Milton and the election in the fourth quarter, year-over-year RASM is expected to be consistent from the third quarter into the fourth. Our fourth-quarter revenue is also in line with our historic seasonality and prior expectations. For the full year, we are raising the midpoint of our guide by 0.5 points and narrowing the revenue range to down 5% to down 4% for the full year. I echoed Joanna's excitement for our plan and the progress made so far this year. As we look forward to the fourth quarter and the New Year, I'm confident we are taking the right steps to give our customers the best experience and the best value, in part because of the dedication of the best crew in the industry. Thank you all for always putting our customers first and prioritizing a safe operation. With that, over to Ursula, who will share more on the financial status and outlook of the business.

Thank you, Marty. We ended the quarter with an adjusted operating loss of just $11 million, about $130 million better than our July expectations or the equivalent of about a 5-point margin improvement. Over 3 points of the improvement were driven by outcomes in our control. As Marty described, we posted better revenue performance than expected, a trend we know must continue in order to effectively offset the significant cost increases we've seen since 2020. We also saw improved operational reliability and, in turn, cost efficiencies and better customer satisfaction scores as our JetForward reliability priority moves are beginning to produce benefits that directly impact the bottom line. Fuel prices moderated down $0.23 from our initial midpoint, resulting in the remaining 2 points of improvement to margin over our July expectations. While fuel prices aren't in our control, we continue to manage our exposure to volatile prices through our opportunistic hedging program. At the end of the day, we still weren't profitable. But the progress we made this quarter is evidence that we are taking the necessary steps to get the business back to operating profitability. It is also indicative of our commitment to hitting our financial targets. From the $300 million revenue initiatives for 2024, which we expect to exceed, to the second iteration of our structural cost program, which we expect to achieve at the top end of our range, we have a consistent record of hitting our program targets. The groundwork is set to realize the JetForward plan and hit the EBIT targets we set out for the next three years. Turning to our third-quarter results and fourth-quarter outlook. In the third quarter, our CASM ex-fuel growth of 4.8% beat the better end of our initial guidance of up 6% to 8%, driven by better operational performance and a shift in the timing of expenses to the fourth quarter. Our structural cost program has also progressed well over the year, achieving $24 million in savings in the third quarter and year-to-date savings of $169 million. During the quarter, we continued our commitment to a more sustainable industry, signing an agreement alongside World Fuel Services and Valero to bring to New York the first-ever ongoing supply of blended sustainable aviation fuel, with initial delivery expected in 2024. Turning to the cost outlook. I am pleased we are maintaining the midpoint of our prior full-year guidance of 7.5%. In the fourth quarter, we do expect CASM ex-fuel to be temporarily pressured due to several transitory factors, including, one, 2.5 points of largely maintenance-related expenses that shifted into the fourth quarter; two, the impact of contractual wage rate step-ups where 2 points; three, the lapping of one-time credits from the fourth quarter of last year, including our 2023 Pratt & Whitney compensation worth about 1.5 points; and four, one point from comping against a near-perfect completion factor in Q4 last year and the impact on capacity from Hurricane Milton cancellations. In total, these factors represent about 7 points of transitory headwinds to our controllable costs, resulting in CASM ex-fuel expected to be up 13% to 15% year-over-year for the quarter. Independent of these headwinds, CASM ex-fuel would be firmly in the mid to high single digits for the quarter. I want to be clear. We remain firmly within the full-year CASM ex-fuel range we shared last quarter and have now narrowed our range to up 7% to 8%. As we look to next year, I would like to reiterate our previous commentary on 2025 costs on flat capacity, which we currently expect in 2025. Our model has historically resulted in annual CASM ex-fuel growth in the mid-single-digit range. While we will not guide 2025 metrics until the January call, these fourth-quarter unit cost levels are not indicative of where we expect CASM ex-fuel growth to be in 2025. Now shifting to our fleet. In the third quarter, we took delivery of six A220 aircraft, supporting the continuation of our fleet modernization program. So far, the program, which we have increased from $75 million to $100 million earlier in the year, has avoided roughly $95 million of cost to date through the continued optimization and avoidance of engine maintenance on our E190s. The program and its benefits will continue through 2025 when our E190 fleet is set to be fully retired. In the fourth quarter, we expect to take seven deliveries for a total of 27 aircraft deliveries this year. These deliveries make up the majority of our CapEx forecast of about $450 million for the fourth quarter and $1.6 billion for the full year. Turning to our balance sheet. At the end of the quarter, our total liquidity, excluding our undrawn $600 million revolver, was $4.1 billion. This includes the proceeds from our $3.2 billion debt raise in August, which consisted of senior secured notes and a term loan, both backed by our TrueBlue loyalty program, as well as $460 million worth of new convertible notes. The proceeds from the new convertible notes were used to retire a portion of our existing 2026 convertible notes. The remaining capital is expected to pre-fund CapEx for the remainder of 2024 and through 2025 and provide ample runway for JetForward. The deal structure also gives us balance sheet flexibility with prepayment options and exposure to more floating rate debt. We expect aircraft deliveries to be funded with cash, further adding to our existing unencumbered asset base of about $5 billion. Being well-capitalized allows our team to fully focus on getting the business back to profitability, improving our balance sheet, and working to eventually produce free cash flow. We firmly believe JetForward is the right plan to get the business back to operating profitability, and we are confident in the $800 million to $900 million EBIT uplift in 2027. JetForward consists of initiatives that are in our control, providing reliable service even in the face of ATC challenges, building out our network, building out our leisure network in the Northeast, where our brand is already well-positioned to win, and offering our customers the products and perks that they desire. JetForward is clear, it is actionable, and as we move through the fourth quarter and into 2025, I believe we have a solid foundation to realize its benefits and drive value for our shareholders, crew members, and customers.

And we'll take our first question from Savi Syth with Raymond James. Your line is now open.

Hey, good morning, everyone. I know Joanna mentioned network deployments kind of maturing in 2025, and you do have the JetForward initiatives. I'm not sure if there's a question for Marty or David. But when should we start seeing kind of the year-over-year revenue RASM trends as they move sequentially to kind of perform better than seasonality?

Hi, Savi. Thanks for the question. It's funny. I think if you look at all of the contributors to JetForward, there are a lot of puts and takes here. I'll go back actually to the first $300 million we promised in 2024. The beauty of having a lot of different initiatives is that some can be above, some can be below. I think we said already that the network changes are not among the biggest changes that we're making. Certainly, things like the preferred seating program, preferred seating fees have changed even more, some other stuff we'll be announcing soon on a relative basis will be bigger. But we're really focused on the more macro elements of both the $300 million 2024 promise and the $800 million to $900 million of promise of JetForward, and we'll be updating you going forward about that. But I'd say from a network perspective, we're very happy with what we're seeing so far. But I will say that if you think about the path for that to phase in, the redeployment of the capacity is going to start ramping. Now the good news is, if you look at our fourth quarter capacity, the last big tranche of capacity changes are coming out in the stations we just closed and then being redeployed. And I'll give the example of Minneapolis. We flew in Minneapolis for 57 months. And we had phased pretty aggressively, as far as revenue going up there. That plane is now flying, I think, in Islip, and we're in month one of Islip, and yet we're still maintaining the RASM growth that what we've already seen in the third quarter. So actually, I'm really, really happy with the redeployment opportunities. We're putting the airplanes in places where we already have a very, very strong frequent flyer base. In fact, Islip is already in part of the top quartile of frequent flyer attach rates for our network. So we're very, very positive about what we're seeing there. And I'm actually very much looking forward to the redeployment. I think it's really a big part of building the depth that we need in the North – the East Coast leisure market.

That's helpful perspective. Thanks, Marty. And if I might just ask on the competitive capacity side, so you're doing what you can to control that, what you can control. But it seems like industry capacity is also moderating. I wonder if you could give a little bit more color, especially on what you're seeing from Frontier and Spirit, because there were some aggressive cuts this quarter.

So I don't want to go into too much detail airline by airline, but I would say on a macro level, competitive capacity, our competitive capacity is actually up fourth quarter over third quarter, and competitive capacity in our markets is really not being contributed to by the ULCCs, but we're seeing it from other carriers. And I'd say, even with that, we've got a pretty big increase. And frankly, even among that, we're still maintaining our third quarter unit revenue. I think that just speaks to the underlying strength of the revenue performance we have right now.

Thank you. We'll take our next question from Jamie Baker with JPMorgan. Your line is open.

Yeah. Good morning, everybody. So when I think back to merger, Joanna, I always viewed your predecessor as sort of leading the charge on that, and it's water under the bridge at this point. But when I think of the international strategy, I was under the impression that there was pretty widespread agreement that it made sense for the domestic network to support it and so on. So I guess that's my question with the downsizing that's taking place and what you internally are contemplating from here, is there still widespread logic for the transatlantic operation, and are we anywhere near the point where the domestic franchise might not be able to adequately support it?

Thanks, Jamie. I appreciate the question. I think maybe just a headline, you've seen us communicate the different pillars of JetForward on a very good trajectory, and I'm pleased with the direction that we are moving. Obviously, one of the pillars is focused on building the best East Coast leisure network. But transatlantic is an important part of that as a spoke. It drives nice relevance in our loyalty program. But if you actually look at the underlying performance from this summer, we were really pleased with how it did. As we think about the future, I think the team has done a nice job seasonalizing it appropriately and looking for opportunities to redeploy the fleet during those long, cold winter months and focusing on the revenue that we can drive during the summer from some great leisure destinations across the Atlantic. So it's evolved since my predecessor, but I think evolved in the way it needed to as we move forward with our JetForward plan.

Okay. Helpful. And then second, I do have to ask, can you envision any scenario where you might reengage with Spirit? Or maybe a better way to ask the question, do any of the tenants of the original deal still stand or still appeal to you given how your balance sheet and margins have evolved since then?

Sure. Thanks for the question. So maybe to be clear, we're not interested in revisiting the Spirit potential acquisition. We want to really focus on improving our margins within JetBlue, delivering on JetForward, controlling what we can, and keeping the team laser-focused on that. I will say that if there are opportunities that come up with assets that are reasonable and may allow us to grow in a capitally prudent manner. Obviously, we would consider and evaluate those. But of course, there's a complexity there, lease price, aircraft age, reconfiguration, and the list goes on. So headline, we're not interested in revisiting the Spirit acquisition, focusing on JetForward, laser-focused on delivering sort of the organic plan for JetBlue and then the opportunity to potentially consider things that may shake free to the extent it makes sense for JetBlue.

Thank you. We'll take our next question from Daniel McKenzie with Seaport Global. Your line is now open.

Hey. Good morning. Thanks. Great job on the third quarter, and thanks for the commentary on 2025. It would be great to go back to that confidence in the 2025 supply-demand backdrop that you guys mentioned in the script. And I know you're not going to guide to the 2025 metrics, but it would be great just to revisit the goals. And so if we could just set aside any further hiccups from Pratt & Whitney, based on what you're seeing today, is the goal of a breakeven margin still a reasonable base outlook for next year? And I guess, what are the moving pieces that you're watching most closely that could potentially change that?

Hi, Dan, thanks for the question. I appreciate it. So in regards to 2025, we're just going to reiterate what we've been saying. So we're still expecting mid-to-high teens number of aircraft on the ground due to the GTF issue. And that is going to result in flat capacity year-over-year. We're in the middle of the planning process at the moment. In terms of CASM ex-fuel, historically, with flat capacity, you should expect a mid-single-digit CASM ex-fuel number. It's still a little too early to provide guidance beyond that. So, we're reiterating what we've previously said, which is building a plan with a goal to have an operating margin, which is breakeven or better. So, we're pleased with the momentum that we're seeing in JetForward. We also continue to assume that the macro backdrop continues to be constructive. So, more to come in January, but we're just reiterating what we've previously said around our 2025 outlook.

Yes. Helpful. And I guess second question here on JetForward, I don't believe the benefits that you guys are currently targeting included another large partnership, but I believe that's something that you're looking at. And so I guess my question is, how quickly if a new partnership is announced, how quickly could that be turned on and how quickly could any incremental revenue potentially fall to the bottom-line?

Hi Dan, thanks for the question. So, I will say there is a plug in JetForward for the concept of some level of partnership going forward. It's certainly something that we're looking at. It could be with American, it could be another carrier. I do want to remind you, we do have 52 partners right now that we work with mostly at JFK and Boston. So, we understand that dynamic as well. I think we learned a lot through the NEA as far as what worked for us, what might not work for us. So, I'm cautiously optimistic that we might have an opportunity at some point in the future. It's not a gigantic number that's going to make this plan pivot. But I think it's certainly one of the tools that could be in the toolbox to try to achieve JetForward. Now, second thing is with respect to speed, I think it would be too early to say. I think it depends on what the structure of the partnership is, but we have a lot of experience at this, and I'm sure it will be the appropriate speed for whatever size partnership we use.

Thank you. We'll take our next question from Duane Pfennigwerth with Evercore ISI. Your line is open.

Hey thanks. Good morning. Marty, can you talk about how bookings are shaping up after the election? Are we seeing an increase now, or do we expect booking activity to rise once we move past it?

When we projected 2024, we factored in the impact of the elections, which we anticipated based on past presidential elections. There are two aspects to this change. The first is reduced travel during the election week, something that has been historically consistent, and we are anticipating this year as well. Fortunately, we had already adjusted for lower activity levels in advance, as discussed in the fourth quarter, where we were proactive in addressing those troughs. The second, and likely more significant long-term effect, is a period of seven to ten days where booking activity declines compared to historical trends. This situation is somewhat similar to what we experienced during the hurricane, where flights in and out of certain areas were canceled, but also many potential travelers were preoccupied with the hurricane's impact. Similarly, during the election, some bookings were lost as people focused on other matters. While this trend aligns with our historical observations, we felt it was important to highlight it to ensure a clear comparison between the third and fourth quarters.

Great. And then maybe just to stay with you, I wonder if you could comment on how you're seeing Caribbean RASM playing out this winter. We had at least one carrier give some forward look on early 1Q, January, February yield commentary. I just wonder what sort of RASM improvement you're thinking about, would that be a leading entity for you? Or would it be sort of more similar to system average? Thank you.

So Caribbean has always been above system average for us. So it's a very strong market, and it's a market where we have a strong franchise and a very strong customer following. I think it's really too soon to talk about first quarter RASM. I will say, in general, we've been pretty aggressive in adding capacity in San Juan, and we were very happy with what we've seen so far, including putting capacity in there. But this market is going to be important to us, and we have a lot of confidence about how Caribbean will shake out.

Thank you. We'll take our next question from Scott Group with Wolfe Research. Your line is now open.

Hey, thanks. Good morning. So on the capacity front for flat next year, any initial thoughts on how to think about the first half of next year? And then I think you said we're going to have mid-to-high teens aircraft on ground related to GTF. Would you expect to end the year any higher or lower than that mid-to-high teens? I just want to understand the trajectory of better GTF. Thank you.

Maybe I'll start with the fleet, and then I can hand it over to Marty. So no, our expectation continues to be, on average, we will have mid-to-high teens number of aircraft on the ground next year. That's our planning assumption that we're using heading into the 2025 plan. I also want to remind everyone, we are also in the process of extending 30 leases that were set to retire. We're keeping those in the fleet in order to backfill some of the lost capacity due to the GTF. So we are in the process of working through those negotiations, and so that is helping the capacity outlook for next year. Maybe over to Marty, just on any more detail that you would add?

Yes. We won't provide specific guidance during the fourth-quarter call regarding expectations for the first half of 2025. However, based on our current knowledge of the fleet plan, ASMs are projected to be negative in the fourth quarter and are expected to remain negative in the first quarter as well. The fleet situation continues to be very dynamic, and we are quite frustrated with our current understanding of the situation with Pratt. We will share more details on this during the fourth-quarter call.

Okay, that's helpful. Secondly, when we discuss the mid-single-digit type CASM for next year, I want to confirm whether we are accounting for the 2-point impact from the wage step-up. I assume that will still be in effect for a couple of quarters next year. Are we also factoring in anything regarding pilots, considering that the extension will begin to expire early next year?

So with flat capacity, as a reminder, our historical unit cost performance would indicate that we would be at mid-single-digit CASM ex-fuel next year, and that is inclusive of all labor assumptions, maintenance assumptions — I mean that's all in. Next year, at the highest level, we'll continue to see inflationary pressures across the labor workgroups. We will also have a step-up in maintenance expenses as well, just due to the nature of the V2500 fleet. But these are reasons why we also put in place the cost pillar as part of JetForward. So we have ways in which we're going to offset these pressures that we're seeing across labor and maintenance, and which will result in a mid-single-digit number for 2025.

Thank you.

Thank you. We'll take our next question from Brandon Oglenski with Barclays. Your line is open.

Hi. Good morning and thanks for taking my questions. So Marty, if I'm hearing you right, I think the majority of the improvement you're seeing on the commercial side is really being driven by changes to product and pricing. Is that correct? And the network changes are going to maybe potentially be more impactful in 2025. Is that correct?

That's absolutely correct.

I mean, can you elaborate a little bit on what changes have been made this year though, where you're seeing that run rate of $300 million or more?

Sure. So there's a bunch of changes we've made already. I think the most impactful one so far has been the preferred seating program where, for the non-even-more seating that's in the front of the airplane, we are charging a fee to get into those seats. Now, to be clear, we have not taken away free seat assignments; we still offer free seat assignments for even our basic customers. However, if you want to sit in the front of the airplane, there will be a fee for that. That has been above our expectations. We just recently, in September, announced a change to Blue Basic where we're now offering a free carry-on bag for Blue Basic customers, which has also performed well above expectations. We're quite happy with how that's gone. With respect to the changes for even more, we are actually very excited about that with respect to how we'll hopefully be able to better merchandise that product and make it a little bit more attractive, and we'll be announcing some product changes as we go forward. We've also put in variable pricing for checked baggage during peak periods. Again, at the end of the fourth-quarter call, as we close out 2024, we're going to give a full accounting of the $300 million we promised and so a little more detail as far as where the benefits have come. But again, this is the point of having a multifaceted approach. Some things can be above forecast, sometimes can be at, something can be below, but the goal we have as a leadership team is to make sure that we commit to our investors and we deliver on that treatment, if not more. So that's why we actually really enjoy having a basket. And the last thing I want to mention, and Joanna mentioned it in the script, but I can't stress it enough. Our crew members have really stepped up in delivering a fantastic product, whether it's airports, folks, and flight and in-flight crews as far as improving high performance, whether it's maintenance, getting airplanes in tiptop shape. Having our on-time performance grow up by 12 points and the improvement in NPS — I can't stress enough how important that is. So again, I should give a thanks to our crew members for their hard work, because we're really seeing in some of our numbers. I think we're definitely seeing the benefit of our improved customer experience.

I appreciate all that, Marty. And maybe if I can get one last thing for Joanna. I mean, if things aren't turning towards profitability next year, and I know you guys don't want to provide guidance right now. But what are incremental levers you can pull to get the business in the black solidly?

Yes. So I think it's JetForward, and if you look at what we laid out, the goal is to get us back on the trajectory towards profitability. So as we think about next year, we're building a plan with the goal to get to operating margin breakeven or better. And that's the first step. And then we'll continue after that. But all of these pillars contribute to that; some of which, as you know, we've announced, but there's more to come down the pipeline, even more space is obviously an announcement today, but we've actually got a number of additional announcements coming. Obviously, this is all against a macro backdrop of cooperative fuel prices, other airline capacity, and then obviously managing through our own AOG issues. If those improve in any meaningful way, that will be tailwinds on the plan.

Thank you. We'll take our next question from Andrew Didora with Bank of America. Your line is open.

Hi good morning everyone. So first, just kind of going back to GTF. I know it's very fluid, but any thoughts on what 2026 could look like maybe relative to 2025 in terms of AOGs and then I guess for the next year, any kind of framework on how we should think about potential — what any potential compensation from Pratt could look like?

Good morning, Andrew. Thanks for the question. We do have clear line of sight beyond 2025. We're continuing to work constructively with Pratt & Whitney on both our aircraft on the ground forecast as well as compensation. So both are a work in progress.

Okay. Got it. And then maybe just a follow-up for Marty, just on the fee election impact. Just curious, are there any particular markets where you see an outsized impact? Or is it pretty broad-based? Just curious your thoughts there. Thank you.

It's definitely broad-based. There's no systemic markets we see here.

Thank you. We'll take our next question from Stephen Trent with Citi. Your line is open.

Thanks very much, everyone, and I appreciate you taking my question. I'm sort of curious, when you think about your focus on premium leisure customers, do you anticipate any movement or adjustments in how you think about your frequent flyer program?

Hi Stephen, thanks for the question. Actually, I think if you look at how we've structured TrueBlue right now, it is already more friendly for leisure customers than what we see in competitive programs. And frankly, we've had a great year in TrueBlue. Even in a world where we were flat or down in capacity, our credit card spend is up in the low teens. We're actually — I think we released a number showing a major growth in Mosaic customers. We've got a program out there for elite customers from other airlines to come over to JetBlue and earn elite status here. I think it's actually worked extremely well with respect to what we've done in TrueBlue. And I think the beauty of this is, and it's funny. If you think about the customer target for us, one of the phrases I like to use is, every single person who flies is a leisure customer. There is a subset of them who are both leisure and business customers. So being focused on leisure customers is an opportunity for us. And frankly, if you look at — I think we're one of the very first programs in the country to have dollar-based earning and dollar-based burning, which we did at least 10, 12 years ago. Our value proposition is fantastic. So we're very happy with how TrueBlue is structured, and I'm very optimistic about the ability of that team to continue to shift more share.

Yes. If I could just add on top of that, I think that all ladders back, not to sound like a broken record, but ladders back to our JetForward plan and delivering the things that customers value. And if you look at our loyalty program, whether it's the lounges or some of the improvements to Mosaic that we're rolling out, including the premium card, that all plays to the premium customer. We've launched a business card down in Puerto Rico. We've got a great status match with Avis for Mosaic. And the list goes on and on. So as we think about loyalty in particular and how we designed the program, as Marty pointed out, it's very much designed with the leisure customer in mind. But we also are being very thoughtful and deliberate about how we drive more stickiness with our Mosaic and really make them feel important to JetBlue. There's this vast amount of people who fly a good amount every year who are lost by some of the bigger programs, and we see a real opportunity with them.

I appreciate it. If I may just follow-up real quickly on that. When you think about the growth of TrueBlue, for example. Any sort of high-level idea of what portion of that growth is attrition from other carriers?

So we don't have that number. We can circle back with you on it. Some of it is clearly that. But at the end of the day, that's not how we're thinking about TrueBlue. It's not about necessarily trying to outcompete others, but trying to demonstrate we've got a program that people want to be a part of because it drives value for JetBlue, value for the customers on JetBlue, and frankly, a unique approach to loyalty. So perks that you care about and perks that you want.

All right. Yeah, the one thing I would add is, I think that for us, TrueBlue represents, on a relative basis, a somewhat better opportunity than you'll see from some other carriers. The example I'll give is if you're a frequent flyer in an OA hub, whether you're in Minneapolis or Dallas or whatever, there's not a lot of share to shift. We tend to be in very competitive markets. South Florida, there are two other airlines having in South Florida. We've got multiple airlines hovering in Metro New York, two airlines hovering in Boston. So we're in a very competitive market. So as a relatively low share of wallet airline, I think we actually have a lot of upside that you would not have if you were a delta or customer in Minneapolis, where they probably have all that share of wallet already.

Thank you. We'll take our next question from Thomas Fitzgerald with TD Cowen. Your line is open.

Thanks so much for the time. Just curious how adding the carry-on bag to Blue Basic has performed versus your expectations, as well as some of the seasonal alignments you're rotating on transatlantic this winter?

Hi, Tom. Great questions. First of all, with respect to the carry-on bag, it is above what we had expected. And I think as we've seen, I think during the peak we were able to be competitive without having that product against our biggest competitor. Clearly, in the trough season, we really suffered from it. Frankly, we've seen more upside than we had originally forecasted. So that's been a great program for us. With respect to the rotation of seasonal mid-services, I almost jumped in when Joanna finished her comment to Jamie about the transatlantic. But I think we have really found a fantastic formula with being able to shift airplanes between the Atlantic in the summer and the seasonal mid-markets in the wintertime. So historically, I think this summer, we had 13 or 14 daily round trips across the Atlantic. This winter would not be six. Those airplanes are being redeployed into domestic markets that are actually very strong in the winter. One, I'll give one example. We've got, I think, three or four airplanes that are in Phoenix, both from Fort Lauderdale, Boston, and New York. The net bookings are actually fantastic on that. I think we just added that service this week, in fact. But that looks to be a rounding success regarding the ability to shift airplanes back and forth. Now, back to aligners and the scrub. Every airplane has to earn its way into the network. When you talk about the international strategy, when Jamie used that phrase 2019, when we started talking about the Atlantic, I said it is a spoke. The Atlantic still is a spoke. And this summer, it's been a profitable spoke. So I think we have a really good combination, and it's a testimony to how good the Mint product is because we just had this week a customer who did a Mint review that was published. We've had a couple of emails from customers who have come over to JetBlue. It is a fantastic product, and it's been a great, great profit generator for us.

That's super helpful. Thanks so much for that color, Marty. Just curious as a follow-up, there have been reports in the press about cutting off hot food on transatlantic in basic economy. I mean, just kind of curious on the broader strategy of how you are driving a revenue premium while also being judicious on costs. So I'd love to hear more on the thinking there? Thanks again for the time.

Thanks so much for the question. We have a fantastic core product across the transatlantic, whether it's cold or it's hot. I personally sat through an entire food tasting process with DIG, and it is second to none. So I would put it up against any other hot product currently flying the transatlantic. So I think there's not much to see there, frankly. It's a fantastic product. We moved it to cold because we think that there's an opportunity there to save some costs, but it's still a far superior product to what you've got flying transatlantic in coach currently. So really proud of what we're delivering there.

Thank you. And we will take our final question from Conor Cunningham with Melius. Your line is open.

Hi, everyone. Thank you. Just back to the network for a second. I realize a lot of the changes that you've made have been additive to RASM and returns, and that's great. But when you think about relevancy as you've made those changes, are you finding that you're growing the pie of people that are coming towards JetBlue? Like the point being is like, do the network adjustments really drive more dependence for people that are using your product overall? Thanks.

Thanks, Conor, for the question. The answer is absolutely yes. I'd say based on the numbers we're seeing in places like Providence, Bradley, Manchester, and Islip, we are absolutely pulling customers towards JetBlue. I will note that all four of those markets had competitors, both ULCC competitors and full-service competitors, our legacy competitors, I guess. I'm not sure we can call it Southwest full-service, but we had a lot of Southwest up there as well. We are actually doing a very good job of pulling these customers over. And frankly, in these markets, in New York State and New England, we are sort of the default carrier for leisure. And I don't want to be in a situation where we have customers who would like to fly JetBlue, who do not have an opportunity in a market that we forecast we can do profitably. So this is not the end of the growth we're going to see in those markets, and it's because customers respond to it extremely well.

Thank you, everyone. That concludes our third quarter 2024 earnings conference call. Have a great day.

Thanks everyone. That concludes our third quarter 2024 earnings conference call. Have a great day.