With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

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The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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U.S. airline JetBlue, which began service in 2000, flies to 100 destinations with 22,000 crew members as of 2025. Known for its East Coast network, especially for leisure travel, JetBlue was an early pioneer of customer experience, including seatback entertainment. After a terminated deal to acquire Spirit Airlines in 2024, JetBlue has sought other paths forward, including a partnership with United Airlines, announced in May 2025, that allows customers to link loyalty programs between the two airlines.

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JetBlue Airways (JBLU): Company Profile, Stock Price, News, Rankings

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JetBlue Airways

jetblue airways

Good morning. My name is Krista, and I would like to welcome everyone to the JetBlue Airways fourth quarter 2025 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, Krista. Good morning, everyone, and thanks for joining us for our fourth quarter 2025 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 will 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 first quarter and full year 2026 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, our business strategy, 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 implied in these statements. Please refer to our most recent earnings release, as well as the 2024 10-K and other filings for a more detailed discussion of the risks and uncertainties that could cause actual results to material... The statements made during this call are made only as of the date of this call.

Other than as may be required by law, we have to take no obligation to update this information. Investors should not place undue reliance on these forward statements. Also, during the course of this call, we may discuss certain GAAP financial measures. Now I'd like to turn the call over to Joanna Geraghty, our JetBlue CEO.

Kush, get me some water. Thank you. Okay, good morning, and thank you for joining JetBlue's fourth quarter and full year 2025 earnings call. I want to thank our crew members for their continued dedication to running a safe operation, especially during Winter Storm Fern. We've canceled over 1,100, 1,100 flights as a result of the storm, and the industry remains in recovery mode. While today's forward-looking guidance excludes the storm's impact, given January is typically a trough period for us, we don't currently expect the impact to be material to achieving our full-year earnings, earnings guidance. Before we get to 2026, let's take a look back at 2025. In the first full calendar year of our JetForward transformation, I'm very proud of what we've accomplished.

In the face of a government shutdown, macro uncertainty, and just related groundings disproportionately impacting JetBlue, we stayed focused and continued to work toward our goals. Operational performance has been a key proof point of our strategic transformation. In 2025, we beat all of our on-time performance targets, improved every one of these metrics versus the prior year, and narrowed the gap relative to others. What makes this even more significant is that it follows an equally strong 2024, when we also beat all of our on-time performance targets. Two consecutive years of reliability improvements are a direct result of JetForward investments, smarter planning, disciplined execution, and our team's daily focus on doing the basics well, all in the most challenging airspace in the world. Our customers are recognizing these meaningful reliability improvements. I want to emphasize this.

In 2025, we achieved an 8-point gain in Net Promoter Score and a 17-point gain since the beginning of 2024 and the launch of JetForward, making us once again a leader in customer satisfaction. This improved experience is driving loyalty and, in turn, has increased the rate at which customers return to fly JetBlue. The progress we've made on delivering reliable and caring service not only increases customer satisfaction, it also sets a solid foundation to enable the success of our other priority moves.

Our products and perks are increasingly capturing more premium revenue, following an enhancement of Even More, then a continued outperformance of preferred seating, the release of our premium credit card, which far exceeded sign-up targets last year, and the opening of our first-ever lounge at JFK. And not to forget, we won the J.D. Power Award for the best business class product last year. Our network changes continued to progress well, even as we capitalize on near-term strategic opportunities in Fort Lauderdale, where customer response to our close-in schedule additions has greatly exceeded our expectations. Now, underlying it all, we maintained a tight hold on costs in the face of meaningful capacity reductions. Taken together, these JetForward initiatives delivered $305 million of incremental EBIT, slightly better than our initial expectations. This outcome gives me great confidence that JetForward continues to be the right plan. Macro uncertainty pressured industry demand last year and impacted results versus our initial full-year operating margin guidance of 0%-1%.

As previously shared, we estimate this uncertainty represented more than four points of headwind to operating margin for the year, impeding our path to restoring operating profitability in 2025 and resulting in an adjusted operating margin of -3.7%... Looking ahead to 2026, we are focused on turning the progress from our JetForward initiative into improved profitability. At a high level, our full year guidance is based upon 3.5 points of capacity growth, 3.5 points of unit revenue improvement, and 2% non-fuel unit cost growth, all contributing to our forecast of breakeven operating margin or better. Our guidance assumes the macro environment continues to provide a constructive baseline for demand. Any incremental recovery in GDP or reduction in fuel prices beyond consensus estimates represents potential upside as 2026 progresses.

Critically, we expect to deliver $310 million of incremental EBIT from JetForward this year, for a total of $615 million in 2026. This keeps us on track to deliver $850 million-$950 million of total incremental EBIT for the full year 2027. The incremental EBIT growth in 2026 is driven by the continued ramp of our existing initiatives and the launch of several exciting new initiatives, including rolling out the remaining key components of our Blue Sky collaboration with United, the opening of our Boston Lounge, and the launch of our Domestic First Class product.

Though it has already been a dynamic start to the year, with the temporary closure of a portion of Caribbean airspace and Winter Storm Fern, our focus remains on controlling what we can and translating these efforts into several points of operating margin improvement in 2026. With that, I will turn it over to Marty.

Thank you, Joanna, and once again, a sincere thank you to our crew members who stepped up to keep our operation running safely throughout 2025 and into 2026. So turning to slide 7 of the presentation. Fourth quarter, year-over-year unit revenue finished up 0.2%, over 2 points better than our guidance midpoint, and nearly 3 points better than our third quarter performance. The majority of our RASM beat was driven by underlying demand strength, coupled with loyalty, ancillaries, and other revenue exceeding expectations. Importantly, those trends have carried forward into early first quarter bookings. We've seen a healthy recovery in domestic performance, with year-over-year RASM for the fourth quarter better than that of international flying. The booking curve further normalizes throughout the quarter, with strong close-in booking performance for holiday travel that was more in line with historic levels. 

As we've discussed throughout the year, the fourth quarter continued to show strong peak period performance, while off-peak demand remained more pressured. Our positive RASM was propelled by premium growth, with premium RASM outperforming core RASM by 13 points in the quarter, reinforcing the strategic importance of our investments in Mint, EvenMore, loyalty, lounges, and coming later this year, domestic first. To complement this addition, we are also refreshing our award-winning Mint cabins in-flight food menu later this year. We have over a decade of experience serving the premium customer, and we are excited to continue refining the premium experience, whether in Mint, BlueHouse or domestic first class. We are also proud of the improvements we have made to our core offerings, with changes to our Blue Basic fare and improvements in reliability and hospitality.

We continue to make refinements across the cabin to make sure that all customers have a reason to return to JetBlue. Additionally, the improvements we've made to our operation and customer experience with JetForward have translated into even stronger brand loyalty, and we capitalized on that in 2025. Loyalty revenue grew by 8% for the full year, in a year when capacity was down 1.6%, and now accounts for over 13% of total revenue, up from 11% in 2023. The introduction of our Blue Sky collaboration with United has made TrueBlue  even more relevant across new geographies, and combined with our loyalty programs, leading customer satisfaction gives us confidence in continued outsized loyalty and premium growth. Co-brand performance accelerated throughout the year, with double-digit spend growth and over 30% growth in new co-brand account acquisitions in the fourth quarter.

Our first lounge, called BlueHouse, has been open at JFK for over a month and is generating great reviews. Since opening, we've seen lounge NPS in the mid-80s, alongside a meaningful increase in the acquisition rate of our premium co-branded credit card. Turning to the network. In the fourth quarter, we added significant close-in capacity to our Fort Lauderdale focus city. The ramp of this strategic expansion, where we've announced over 20 new nonstop destinations, plus increased frequency on a dozen others, is materializing faster than our initial expectations. While we initially expected a 1-point RASM headwind in the fourth quarter, resulting from the close-in nature of growth, the impact was closer to 0.5 point, reflecting customers' strong response to our schedule additions and preference for our award-winning customer experience. Fort Lauderdale represents a strong premium leisure market as both an origin and a destination.

We are now offering up to 26 daily Mint flights touching Fort Lauderdale this winter, offering more domestic lie-flat seats than any other carrier in Florida. In addition, Fort Lauderdale sits strategically between our strong foothold in the Northeast and our robust Latin and Caribbean network, making it a well-placed connection gateway for customers with significant upside potential for JetBlue. With our far better customer experience and competitive low fares, and now more destinations, we are pleased to bring even more value and choice to customers in Fort Lauderdale and across South Florida. These initiatives and more all contributed to our JetForward performance in 2025. JetForward delivered a total of $305 million of incremental EBIT last year.

On slide eight of our earnings presentation, we've broken down each priority move and the key initiatives that delivered value in the second half of 2025. We're capitalizing on this progress and more in 2026. It will be a big year for Blue Sky, as we expect to roll out the remaining key features of this collaboration with United throughout the year. We expect to activate cross-selling interline flights on each other's websites very soon. This will be followed by mutual elite customer loyalty benefits, turning on as the year progresses. Through the second quarter, as we expect to begin selling United's non-air ancillaries through our Paisly subsidiary. We plan to launch with car rentals, followed by hotels, cruises, vacation packages, and travel insurance, with the expectation to be selling all ancillary products by the end of the year. Lastly, turning to guidance.

For the first quarter, we expect capacity to be up 0.5%-3.5% year-over-year, with unit revenue growth in the range of flat to up 4%, supported by demand momentum, actually the fourth quarter, and a constructive competitive capacity backdrop. We estimate the closure of Caribbean airspace in early January, and some lingering demand impact will be a headwind to RASM of less than a point for the quarter, which is incorporated in our guidance. As Joanna mentioned, not incorporated in our formal guidance are the recent impacts of Winter Storm Fern. For the full year, we plan to deliver unit revenue growth of 2%-5% on capacity growth of 2.5%-4.5%, contributing to break-even operating profitability or better.

We expect positive year-over-year RASM growth in each quarter in 2026, but more weighted towards the second half of the year as initiatives ramp. Our RASM guidance is dependent on four key drivers, highlighted on slide 10 of our presentation. These drivers are part of JetForward and larger than I control, which gives me confidence in our ability to execute. The largest driver is loyalty, driving about one point of year-over-year RASM. We expect to grow loyalty revenue as a percentage of total revenue by about one point to 14%, driven by added redemption options and the opening of office. Next are product enhancements, which are expected to contribute three-quarters a point of RASM. These enhancements help to drive yield and improve load factor as our offering evolves.

Additionally, Blue Sky and Paisly are expected to drive another three-quarters a point, and we believe the maturing of our network changes and improving customer satisfaction will contribute to the remaining half a point to get to a full-year RASM midpoint of up to 3.5%. Ultimately, we expect the combination of these drivers and over 200 underlying JetForward initiatives to result in a more competitive customer value proposition, translating to RASM growth exceeding CASM growth this year, and supporting our path back to sustained profitability. While the environment remains dynamic, the progress we've made through JetForward gives us confidence that we are positioned to deliver on our commitments in 2026. I will now turn it over to Ursula.

Thank you, Marty. I want to reiterate what Joanna said about 2025. I am very proud of our team for controlling what we could amidst a dynamic environment to deliver on our full-year cost outlook and build a strong foundation for what's next. We adjusted our business to navigate a challenging macro environment. We proactively reduced capacity by 2 points over the year as demand softened. We identified cost savings above and beyond our initial budget, and most importantly, we progressed on JetForward and delivered $305 million of incremental EBIT in the face of all these challenges. Turning to slide 12. The fourth quarter was marked by a high volume of unforeseen external events. Despite this, the team did an excellent job recovering from each event and moving forward under difficult circumstances. For the quarter, CASM ex-fuel was up 6.7%.

Disruptions from the government shutdown, the Airbus Airworthiness Directive, and two major weather events added cost, reduced capacity by nearly 2 points, and drove the gap to our initial CASM ex-fuel guidance. Fuel price was also a headwind in the quarter, with crack spreads rising sharply in late October and later moderating in conjunction with Brent, resulting in a fuel price of $2.51 versus our midpoint expectation of $2.40. For the full year, CASM ex-fuel finished up 6.2%. Given full-year capacity was reduced by nearly 2 points versus our initial expectations, I am especially proud of the team for managing costs within our initial range of up 5%-7%.

In our first official year of JetForward, we achieved substantial cost savings, driven by initiatives like improved tooling and utilization of AI to optimize planning, better manage disruptions, and enable greater self-service. On the support center side, we strengthened efficiencies and our fixed costs. We also began modernizing fuel processes, unlocking cost savings through technology, process, and operational initiatives. Shifting to 2026, we expect full-year CASM ex-fuel growth of 1%-3%, driven by several factors. We averaged 9 aircraft on the ground from GTF-related issues in 2025, and we expect that number to be in the mid-single digits in 2026. New deliveries will also drive capacity growth this year and provide tailwinds to labor productivity and fixed costs. Additionally, we are seeing benefits from fleet simplification efforts as we are now down to two fleet types.

These benefits will be offset by higher rents and landing fees, investments in our customer experience, and the impact of tariffs. CASM ex fuel in the first quarter is expected to grow the most of any quarter in the range of 3.5%-5.5%, largely due to elevated maintenance expense. CASM ex fuel growth is expected to moderate downward over the year, and especially in the second half, when we expect roughly flat year-over-year CASM ex fuel as JetForward cost savings initiatives ramp up and year-over-year capacity grows. We estimate fuel price to be at the midpoint of our ranges, $2.34 for the first quarter and $2.27 for the full year. Encouragingly, fuel efficiency remains a tailwind this year.

ASMs per gallon are expected to improve by approximately 1.5% in 2026, contributing to an approximately 5% total improvement over the last three years, driven by the retirement of the E190 fleet and substantial fuel savings initiatives as part of JetForward. For reference, 5% of our annual fuel cost equates to $100 million in savings in 2026. Powered by an improving macro backdrop and $310 million of incremental JetForward EBIT, we expect RASM growth of 2%-5% and CASM ex fuel growth of 1%-3% will drive break-even or better operating profitability this year. Turning to capital allocation and our financial perform priorities on slide 13. In 2025, we invested $1.1 billion in capital expenditures, primarily consisting of 20 aircraft deliveries.

For 2026, we expect capital expenditures of approximately $900 million, driven by 14 aircraft deliveries and the start of domestic first-class retrofits. Since the start of JetForward, we've worked to secure our financial future by cutting in half our planned 2026 through 2029 capital spending from $6 billion to $3 billion. As a result of these efforts, CapEx is expected to remain below $1 billion annually through the end of the decade, enabling low to mid-single-digit annual capacity growth, while also accelerating our return to positive free cash flow. We ended the year with $2.5 billion of liquidity, excluding our undrawn $600 million revolving credit facility. This year, we expect to repay approximately $800 million of principal throughout the year, including $325 million outstanding on our 2021 convertible notes, which mature this April.

To address cash needs, we intend to raise approximately $500 million in new financing, supported by roughly $6.5 billion of unencumbered assets. We are focused on aircraft-backed structures and are evaluating all available markets as we prioritize securing low-cost capital. For the year, we expect gross interest expense of approximately $580 million. We know there is still much work to do on our balance sheet, but I am encouraged by steps in the right direction. Gross debt peaked last year, and in 2026, we expect our leverage profile, measured by net debt to EBITDA, to begin to improve as benefits from JetForward substantially grow our EBITDA and help us reach our goal of restoring full-year operating profitability.

As we look ahead, our priorities remain the same: getting back to sustained operating profitability, followed by generating positive free cash flow and restoring the health of our balance sheet. We believe there is a path to generating free cash flow by the end of 2027. In closing, while 2025 brought unexpected challenges, it also marked a year of meaningful progress that strengthened JetBlue's foundation and reinforced our confidence that JetForward is working. We enter 2026 focused, energized, and committed to returning to break-even profitability or better. The macro backdrop is improving. We're excited to be growing again. Our operation is performing at a level we haven't seen in years, and our commercial initiatives continue to ramp with new initiatives rolling out, from Blue Sky to the launch of Domestic First Class and the opening of our second lounge in my hometown of Boston.

At the same time, we are returning to disciplined, low, single-digit cost growth. With these elements coming together, we believe we are well-positioned to restore profitability, and I am eager for what comes next for JetBlue. With that, Krista will open the call for questions.

Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one.... We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. And your first question comes from Dan McKenzie with Seaport Global. Please go ahead.

Oh, hey, thanks for the time, you guys. So premium is clearly outperforming leisure today, so my first question really starts there. And, you know, that is that premium seats today, I guess, are 25% of the total flying, but I'm wondering what percent of revenue they comprise and what you would expect that to be when you exit 2027. So I'm thinking it's probably 30% plus today, and the question becomes: could it be over, you know, could Premium revenue be, you know, over 40% of revenue in 2027?

Hey, I'll take that, Dan. Thanks for the question. So we generally have not released that number, and I think as premium becomes a bigger and bigger part, we'll have to think about how we want to manage that in the future. The one thing I do want to stress is that with the introduction of the domestic first-class product, later on this year, the total percentage of premium seats is not going up dramatically. That product is basically being funded from reduction in the EvenMore cabin. However, the quality of the seats actually goes way up, and as does the yield, so it is absolutely creative.

The benefit of domestic first class is clearly in the products and perks, as they live under JetForward, and we're really excited about just continuing the momentum we've seen for premium products. You know, whether it's lounges, Mint, Even More, you know, we have a really great track record as far as being able to deliver premium products to our customers. Our customers love them, and we are really excited to introduce first class later this year. So that's the question.

Mm. Mm, yeah. Yeah. Second question here just ties to leisure revenue and the, you know, recovery glide path at the current guidance and beds. And, I'm thinking leisure fares so far this month are, you know, largely flat year-over-year, and I'm just wondering if that full-year guidance and beds is sort of a flattish revenue, you know, leisure component or, or what that recovery, the shape of that recovery could look like?

So that's a great question, and I will start with a line I use pretty much every call, which is, "We guide what we see." And the trajectory of 2026 unit revenue is fundamentally based on fourth quarter performance and first quarter bookings. So, you know, you will hear us use a word today that we generally haven't used in well over a year, which is strong. Bookings are strong right now. And I think what I'm especially excited about is, you know, we've seen a nice recovery of leisure customers, and frankly, I cannot talk enough about how pleasantly surprised we've been with the speed of the adoption of our new capacity in Fort Lauderdale. That's been a very nice contributor.

But overall, you know, when you look at our operational improvements, you look at the improvements in loyalty program, the resulting increase in NPS, I think we sort of have a flywheel of goodness going on right now, that's resulting in great unit revenue. There are no big assumptions of, you know, a GDP snap back quickly, you know, significant changes in competitive ASMs. Basically, we're sort of forecasting based on what we see right now.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go ahead.

Hey, thank you. Good morning. Marty, that word demand strength, which you haven't used in a while, what is different about the trends that you're seeing now? Maybe you could speak to changes in the booking curve. And then for my follow-up, which I'll state right up front, you know, to what extent is competitive capacity in the first half, you know, contributing to that?

Hey, Duane. So let me start with a little more color around what we mean by the word strong. I think that the thing that has been most interesting to us is the recovery in the domestic coach market. You know, I made a comment in the remarks about how domestic and international performance has been converging, which I think we're very optimistic about. I'll also say the booking curve looks very normal. I think if you go back to the middle of 2025, what you would have heard us say in calls was, the bookings are coming, they're coming very close in, and there was a little bit of apprehension of, you know, you're sort of sitting here with bated breath, waiting to make sure the bookings actually came. That's really not what we're seeing now.

We're seeing a very normal booking curve, with the exception of the Caribbean for the first couple of weeks of January, where we did see a bit of a drop, which, by the way, we're back to positive year-over-year rise in the Caribbean. So that was a blip that's been temporal and much better now. It just looks like a normal demand year, which I'm very, very optimistic about. With respect to competitive capacity, yes, and we're in a relatively good competitive capacity environment right now. We have had our biggest competitor in Fort Lauderdale pull down dramatically. We have not made any assumptions about any further pulldowns or any significant changes in competitive capacity. I will say that the first quarter is very clear as far as what's out there right now.

I think second quarter still has some time to settle down. You know, we're still selling more in second quarter than we're probably going to fly. But that's generally what you've seen in the time periods when you've got strong peaks and weak troughs, where it appears that there's a sort of a big net strategy, and then you winnow it down a little bit closer in. But there is no. I, I, I want to make it really clear on this call, there is no, there is no magic hat with a rabbit in it, of some sort of a big surprise that's gonna make these numbers. This is just execution of the JetForward plan, on top of the existing strength in industry unit revenue right now. That's one of the reasons we're so optimistic about 2026.

Your next question comes from the line of Savi Syth with Raymond James. Please go ahead.

Hey, good morning. I was wondering, Marty, just to follow up on Fort Lauderdale, could you talk about just, you know, how Fort Lauderdale might be changing under kind of the current strategy other than just getting bigger? Like, are the connections going to be bigger as a result, in terms of total system? Just how should we think about Fort Lauderdale, you know, once this is kind of fully baked in versus kind of the strategy it set up, you know, two, three years ago?

Thanks, Savi. First thing I'll say is, I think we should acknowledge Fort Lauderdale is our very first destination. The original JetBlue flight flew from JFK to Fort Lauderdale. So we have the history of JetBlue in Fort Lauderdale is as long as the history of JetBlue. And we have had a lot of growth in Fort Lauderdale over the years. I think if you go back 10 years or so, we announced publicly this concept we called Fort Lauderdale 140, which was growing Fort Lauderdale to about 140 flights a day. We had trouble executing that, mostly because of gate resources in the airport. It is a relatively constrained airport, especially constrained for international gates.

And if you look at the opportunities to grow, you know, we have a pretty solid slate of destinations to the north of Fort Lauderdale. Our challenges are really to, you know, Caribbean, Central and South America, and for that reason, the lack of international gates has been a problem for us. I'd say with the pulldowns that we've seen from Spirit in Fort Lauderdale, our gate resources have become available and, you know, we've wanted this for many, many years. So when the opportunity came up, we jumped on it very, very quickly to make sure that we could backfill, because this is a, this is an aspiration we've had for a long time.

And I would say that, you know, starting with crew members and also investors, you know, we have continually gotten this feedback of, you know, you need to diversify beyond the Northeast. And, you know, I think if you're looking for diversification beyond the Northeast, this is it. I mean, Fort Lauderdale is a great premium market, South Florida, great premium market, the best premium market in Florida, and obviously, we have a very premium-heavy strategy going forward. Number two, geographically, it is a perfect location between North and South. So I think given the franchise that we already have in South Florida, the opportunity to grow there, we're really bullish on Fort Lauderdale. Specifically, yes, we have more of a bank structure in Fort Lauderdale than we have historically for connectivity. And as gates become available, we'll continue to emphasize to enhance that.

In fact, you know, we are currently in the process of expanding our banking plans there. We don't really want to become a legacy hub-and-spoke airline, so it's not going to that extent, but the extent to which we can create casual connections at good departure times in Fort Lauderdale, we will absolutely take advantage of it. And so far, it's performed very, very well from a connect perspective. I think for those customers who have connected in Miami versus connecting in Fort Lauderdale, I think I know which one everybody would pick, and it seems like customers are picking it, and Fort Lauderdale has done very well for that.

That's helpful. If I might just quickly follow up for Ursula, just on the $500 million that you plan to raise this year, is that reflected in the interest expense guide? Is that... Or is that kind of potentially an increase to the interest expense assumption?

Good morning, Savi. Yes, the interest expense is included in the $580 million guide. I will note the $500 million that we're anticipating raising will probably dual tranche it, so there could be a portion of that raise, which happens early in the year to support the convertible debt paydown that is due in April, and then the second tranche of the financing most likely will happen in the back half of the year.

Your next question comes from the line of Tom Fitzgerald with TD Cowen. Please go ahead.

Everyone, thanks, thanks very much for the time. It's good to see the premium credit card sign-ups are exceeding your expectations. I was wondering if that's primarily in the New York area, just given the lounge, or if you're seeing that kind of throughout the network or in new geographies, or any details you'd want to expand on there?

It's really throughout the system, and I think it's because the premium credit card itself actually has a great value proposition. And frankly, you know, a lot of our customers touch New York. So even if you don't live in New York, it's generally an important destination. And I think when we get New York and Boston both up, we're really bullish about the premium credit card. It's also. It also has a lower annual fee than other airlines and the bank premium credit, premium credit cards. And I sort of mentioned this in the script, and we put this in the release, but didn't put it in the script. Our friends at Bain, who do, like, industry-level NPS scores, have now given us permission.

We can say that TrueBlue has the highest NPS of any loyalty program of any airline in the U.S. So I think, again, back to the concept of the flywheel, you know, success sort of breeds success. So we're very excited about the card. You know, our partnership with Barclays is absolutely fantastic, and I'm really optimistic about the lounge as a contributor. We are, and back to Savi's point about Fort Lauderdale, exploring whether we can make a launch of Fort Lauderdale work. It's a pretty constrained airport, so we're not as sure that we have space for it. But if we can make it work and provide a great customer experience, it's certainly something we'll be talking about later on in 2026.

I'll just add on Marty's comment regarding Barclays. I think what's unique about our program is we're not competing with a bank's proprietary card. This is, you know, a fully dedicated Barclays card for JetBlue. And so when you think about the depth of the relationship, and, you know, two entities really rowing in the same direction, that's very much what you see with the JetBlue card.

... Okay, great. That, that's really helpful. Thank you for that. And then just, as a follow-up on Blue Sky, I was just kind of curious, do you see upside potential to that, 75 points of RASM expansion? And then just within the, within the various buckets, you know, do you see the, the wider funnel from the, you know, being on their distribution website driving a lot of the gains? Or do you see it kind of split evenly or, Paisly? Just wondering if you could kind of break out the, the different drivers within the, within Blue Sky and Paisly. Thanks again for the time.

Thanks, John. Honestly, all those things are important. We obviously, Paisly is very, very important. What we love the most about the Paisly upside is that, first, you know, we have really built a better mousetrap with the Paisly platform. And especially important for us is that Paisly is an extremely capital-light way to grow earnings. You know, the only capital there is basically IT capital, and it's de minimis compared to our overall capital expenditure. With respect to the other upside to Paisly, I do fundamentally believe that the benefits of Blue Sky are focused in TrueBlue.

As you look at TrueBlue program ability to compete with the big three legacy airlines, the biggest challenge we have is that we do not have a full roster of worldwide destinations to earn and burn. And through this partnership with United, we finally plugged that hole, and I think the utility of a TrueBlue point has skyrocketed in the last six months with the addition of this program. We're also relatively early along in the game, so, I think it's, you know, we'll see how that works with customers, but I, I love the value proposition of TrueBlue, and I very much appreciate this relationship with United to make this possible. I do also believe that the, the mutual distribution is going to be important.

You know, I think about places where we offer services, United doesn't, you know, JFK to the West Coast, you know, even when they do eventually enter JFK, and we're not sure where they're going to go, but, you know, sometime in 2027, they'll be in. Today, if you want to earn MileagePlus points from anywhere in New York to the West, from, you know, this side of the Hudson to the West Coast, we're really the only option. I love having those flights on united.com. And, you know, even though, you know, United may not have the same direct penetration that JetBlue does, it is a significantly big airline.

We don't really know the traffic to their website other than what we can pull publicly, but I love the thought of all the JetBlue flights getting the eyeballs of all these United customers on united.com all the time. And frankly, I will remind you, you know, we have a very high NPS, so I think when United customers actually get to fly JetBlue, their reaction is going to be: "Hey, this is great. I can have a great customer experience, and I can also earn my MileagePlus points." So we're really excited about that as well.

Your next question comes from the line of Mike Linenberg with Deutsche Bank. Please go ahead.

Yeah. Hey, good morning. Just two here. Ursula, just on, you called out the $6.5 billion of unencumbered assets, and I just-- that seemed a little bit higher than maybe what you shared in the past. I thought it was more like $5 billion, and so maybe, maybe it reflects some debt paydown or maybe, you know, you reappraised, I don't know, a pool of spare engines. It, did that, has that changed at all?

It did. Good catch, Mike. So the previous number that we publicly quoted was $5 billion. As we were assessing our liquidity needs for 2026, we did go through and update all of our appraisals on the unencumbered assets. So, as a reminder, we purchased our aircraft deliveries last year with cash, so those were added into the pool. In addition to that, there's still incremental value on our loyalty program as well. So those were really the two main drivers of the increase. As a reminder, as we look at the unencumbered asset base, the breakdown is about 30% of it are aircraft and engines, about 20% of it is loyalty, and then obviously the remainder is slot gates and routes and our brand.

So yeah, we're really pleased to continue to have this cushion, and the cushion is a really healthy culmination of assets.

Great. Thanks for that clarification. And then just, Marty, you talked about the LOPA changes with the rollout of first class. When actually do you start selling that first class seat, and how long is that rollout gonna take before you get to all of your domestic flights with first class? Thank you.

So hey, Mike, we're expecting the first airplane to roll out in the third quarter, and we're right now in the middle of certification, so we're not ready to pin a date down yet as far as when that will be. And the implementation is actually relatively quick. We'll have, you know, 20-something% of the fleet done by the end of this year. The overwhelming majority will be done by the end of 2027, but not all of it, and the rest comes in in 2028. And the benefits, you know, it's obviously an important part of the products and perks initiative in JetForward. It will not be fully ramped by the end of JetForward. There, there'll be continued ramp in 2028.

We're really excited about it, and we'll be making more specific announcements later on this year.

Okay. Did you say 20% or 27% by year-end?

Your next question comes from the line of Catherine O'Brien with Goldman Sachs Group, Inc.. Please go ahead.

Hey, good morning, everyone. Thanks for the time. So, Marty, you know, you talked about the Fort Lauderdale capacities ramping better than expected, less of a drag to fourth quarter. Would you say that's more a function of, you know, improving overall demand? Did you see faster than expected share shift? You know, was the competitive response better than expected? You know, can you talk about how Fort Lauderdale RASM is performing, you know, versus the system? And then higher level, like, as you're thinking about this additional capacity in the Mint adds, how do you expect that to impact the medium-term hub profitability versus system profitability in Fort Lauderdale? Thanks.

Thanks, Katie. And I'll say two things. First of all, we have multiple databases that help us measure share shift. The one that is the most close in, Spirit actually does not participate in, so right now, I cannot tell you if the fourth quarter upside has been share shift or has been simulation. But when we get the DOT data, which should be coming in the next, you know, several weeks, well, I think we'll have a better answer for that. So I don't want, I don't want to get ahead of my skis here because I don't actually have the real data. I do know that we're certainly carrying a lot more customers than we expected at higher yields than we expected.

So, whether it came from Spirit or from people coming off their couches, I'm happy to have it either way. With respect to profitability, we do expect Fort Lauderdale to be accretive to our overall system profitability. And frankly, I feel like with the change in the competitive environment down there, and also, you know, the ability to compete with, you know, a tough customer experience in Miami with one of our competitors, just, you know, Fort Lauderdale is a very easy airport. It's centrally located in the region. You know, we would not be doing this if we did not think that Fort Lauderdale would be a significant upside contributor to the system. Obviously, we could put airplanes anywhere. We're specifically choosing to put them in Fort Lauderdale for a reason.

Got it. Makes sense. Maybe, Ursula, one for you. You mentioned you're thinking this year's financing needs will be about $500 million. How sensitive is that to your 2026 profitability outlook? You know, realizing you're guiding to break even plus, not a range. But does it look different at break even versus above break even? And how does the E190 and XLR asset sales help offset fundraising requirements this year, if at all? Thanks again for the time, guys.

Yeah. Good morning, Katie. Thanks for the questions. So the first one is, we're targeting liquidity to be anywhere between 17% and 20% of trailing twelve months revenue. So obviously, that excludes our revolver as well. So, there's a little bit of buffer there just in regards to, you know, the operating performance of the business. So, you know, I will say, you know, I feel really confident based on what we know today in the team's ability to execute on the break even or better operating margin. And so, as we head into raise liquidity, you know, like I said, we'll target that 17%-20% range. We'll pivot if we have to. Obviously, we have the very healthy unencumbered asset base to choose from if we do need more liquidity.

You know, I'm pleased that I believe that we've hit peak debt levels last. So I'm really leaning hard into the EBITDA growth, driven by JetForward, to help improve the leverage metrics. And then in regards to your cost question, on fleet, last year we had a meaningful amount of fleet transactions, the most impactful being the sale of the E190s. We also took advantage of some market opportunities in regards to engine sale leasebacks. As we look at 2026, we do have about 0.5 point of controllable cost benefit baked into the full year guide, that's really driven by the remaining sales of the E190.

So we have about eight aircraft that we will be selling in the first half of this year, and we'll continue to monitor, you know, the markets as well in terms of sale-leaseback opportunities. Hope that answers your question.

Your next question comes from the line of Jamie Baker with JPMorgan Chase & Co.. Please go ahead.

Oh, hey, good afternoon. So, Marty, I wanted to go back to the question you were answering before Savi's question. You mentioned the rabbit. Can I just confirm there are no specific assumptions in your full year guide as to what potentially happens with any of your competitors that might be facing, shall we say, a precarious situation at the moment? Is that correct interpretation?

Yeah, I'll give you a little more clarity on that, Jamie.

There has been capacity added by some other airlines to Fort Lauderdale with the-

... reduction of Spirit ASMs. Those, those CASMs are there, and they're not going away. So that growth is still there. We're not assuming that that was temporal. We're also not assuming that, that Spirit goes through any significant shrink, versus where they are right now. I mean, our view is,

... We wanna make sure that as we give a guide, there's no sort of little secret upside in there. I mean, we've been trying to guide this thing very straight for the last two years, and we're not gonna change now. I mean, obviously, the rumors are out there. You know, I think that, you know, there's certainly probably more rumors than they have airplanes, but I don't think there's any upside for us to try to make any assumptions on that.

... we do have multiple plans in place, depending on the outcome of Lauderdale and Spirit. So, you know, we're ready for a number of scenarios to ensure that customers are protected, and that we bring the JetBlue product and the offering to more folks in South Florida and beyond.

Excellent. I appreciate that clarification, both of you. And then, you know, just round numbers, JetForward's contribution was about $300 million last year. But total EBIT went down about $250 million year-on-year. So that implies simplistically that your core was down $550 million. Now, last year was obviously, you know, a tumultuous one for JetBlue in the industry. Do you attribute that entire $550 million entirely to the macro as opposed to any, you know, idiosyncratic challenges your franchise was facing?

Yeah, yeah, Jamie, so I'll take that. Yeah, we, we attribute it entirely to the macro. And as we've looked back at 2025, we've been able to isolate out the JetForward initiatives and the value that they've driven, and if not for the macro, we're quite confident we would have hit our full year guide of our full year operating margin guide. So, you know, we're actually very excited about 2026. This is gonna be our year. You know, if you think about the initiatives that we continue to execute in 2025, whether it was operational performance and improved NPS, our premium loyalty benefits like the JFK Lounge, you know, EvenMore changes, the Blue Sky Partnership and our network changes, these are all initiatives that are built to ramp over time.

As Marty mentioned, you know, these initiatives create a flywheel effect, where operational reliability and NPS will enable premium growth, which will then strengthen loyalty and revenue, and then you layer in network optimization, amplifying that impact. So, you know, we really are excited that this really sets us up for continued acceleration and upside in 2026 as we then add things like the lounge, domestic first, and the full implementation of Blue Sky. So, you know, that's behind, you know, our, our guide for this year. You know, last year was definitely a step back for JetBlue, but also the industry as a whole. And this team continued to execute, and we look forward to taking advantage of all that execution and more in 2026.

Okay. Thank you very much. We appreciate it. Take care.

Your next question comes from the line of Conor Cunningham with Melius Research. Please go ahead.

Hi, everyone. Thank you. More rumors than aircraft. I'm gonna potentially steal that one. The bridge in the deck was interesting to me. The 50 basis point macro or industry setup, I think that you got or that you have there is-

JetBlue Airways (JBLU) Q4 2025 Earnings Call Transcript

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