Helane Becker: Thanks very much team. Thanks, Ursula.
Operator: Our next question will come from Scott Group with Wolfe Research.
Scott Group: Hey, thanks. Good morning. So I understand not breakeven for the year. I’m just wondering, do you see a path back to breakeven in the second half? And then I just want to clarify the second quarter RASM. So I guess given Latin it seems like domestic RASM flat to up slightly year-over-year. Is that right? And I guess why not better just given domestic capacity down over 10%?
Ursula Hurley: Yeah. So I’ll take the first part of the question in terms of operating margin. Make no mistake our number one priority is getting this business back to consistent profitability. We were profitable in the month of March and we’re focused on driving sustainable long-term profitability. And we were in an environment where we were constrained over the last few years given Spirit. And so I feel confident that we’re showing action between the network changes, the revenue initiatives, controllable costs, as well as reducing our fixed costs. I do believe that these actions are going to continue to ramp up and put us on a path to drive accretive value. In terms of the second half of the year, I mean, it’s a little early to tell.
I mean, it’s very dependent on the strength of the peak period demand during the summer and obviously, over the holidays in November and December and fuel. I mean, we can’t ignore that the volatility of fuel over the last few weeks has been extremely volatile. So it’s challenging to tell whether we’re breakeven in 2H, obviously, that’s the ultimate goal.
Dave Clark : And then Scott, this is Dave. With regards to the second quarter RASM question. So yes, Latin is the entire headwind, right? It’s down mid-teens. As we said in the presentation, it’s about 35% of our capacity. So that’s a big piece. If you look at the rest of our network, excluding — and it continues to be RASM positive as it was in the first quarter. And then in terms of why not better regardless, given the capacity being down, keep in mind, we’re still comping against very significant pent-up demand last year in the first half of the year as especially spring break destinations had pent-up demand that had been sort of built up during COVID. And then secondly, competitive capacity does tick up a bit for us in the second quarter. It’s one point higher than it was in the first. So there is a bit of pressure there as well.
Scott Group: Okay. That’s helpful. And then just separately, on the cash balance, can you just let us know where the ATL stood at the end of the quarter? And then on the financing side, are there any covenants we need to be aware of just in terms of limits on how much more debt you can raise?
Ursula Hurley : Yes. Thanks for the question, Scott. We’ll take the ATL question offline. I’ll have Koosh circle up with you. There hasn’t been a material change. And then in regards to your covenant question, there’s nothing material. I mean, in a few of our agreements, we have a min liquidity target, which we are more than well above. So there’s nothing else material beyond that.
Scott Group: Okay. Thank you guys. Appreciate it.
Operator: Our next question will come from Chris Stathoulopoulos with Susquehanna International Group.
Chris Stathoulopoulos : Good morning. Thanks for taking my questions. So Joanna or Dave, I understand the revised revenue guide primarily due to LatAm and full trough lying, but if you could put a finer detail as we think about perhaps the 0 to 60-day booking window, but then also the second half, when we look at the various segments. So, maybe if you could put a finer detailed domestic leisure business short-haul international long-haul peak, offpeak. And then tying it all together, just kind of what gives you the confidence here that other parts of the network? I know you have the ancillary initiatives in place but that can offset what looks like this persistent LatAm weakness? Thank you.
Joanna Geraghty : Yes. Maybe I’ll take the kind of second — Dave for a deep dive on the network by geography. So we’re confident that the Latin headwinds are transitory in nature. We’ve seen capacity while it’s still up, it is moderating and it continues to moderate in Latin through the rest of the year. And the reality is this is a very strong market for JetBlue from a margin perspective, and it will continue to be. These headwinds are transitory and we’re going to continue to double down in this area, because this is part of our core geography. We’re pleased with the progress of domestic that has generated positive unit revenue into Q1 and then into Q2, we expect to see about the same transatlantic. RASM is up 20% against significant capacity adds in that region.
So, again, very happy there. So as we think about kind of looking at the full year, this Latin headwind, given the presence of JetBlue in those markets 35% is really the big challenge that we’re currently facing. But we’ve been there before. It will cycle out and JetBlue will win in these geographies. Dave, if you’d like to maybe grab a deeper dive in some of the other areas.
Dave Clark: Yes. Thanks. I think you noted there’s a lot of different moving pieces as sort of we come out of this COVID period. To address a couple of them. peaks remain stronger than off peaks. That’s been consistent for about a year or so now. We are taking those learnings and continuing to plan our trough period a bit differently than we had before in order to try to drive the best financial performance during that. We’ve already been doing that for the fall trough. As mentioned, we’re going to pull a bit more capacity at the fall trough as well. So working hard with those learnings. The comp gets easier as we go through the year as we sort of get away from cycling against this pent-up COVID demand that we’ve seen in the first half.
So that’s another piece too. And then lastly, I mean the booking window – we still have customers booking relatively close in. That’s where the majority of our revenue comes. It can give us more challenges looking further ahead, which is why we sort of go one quarter at a time generally with our guidance. The booking curve has moved out a little bit, I’d say over the past year as sort of COVID concerns have dissipated and as more and more customers are buying our Blue Fare, which is our main cabin fare and has no change fees. So there’s less risk to book further out. But within all those things, we feel really good about the moves we’re making about our Latin geography over the long-term as it cycles through this temporary increased competitive capacity and feel that all parts of our network with the moves we’re making are going to be contributing meaningfully in the future.
Chris Stathoulopoulos: Okay. Thank you. And my follow-up. So on Slide 7 here where you referenced the potential for exploring additional cost savings opportunities. Could you walk us through sort of what areas you’re thinking about there, whether it’s on maintenance or there’s perhaps additional opportunities within these voluntary “opt-out”. And within that if you could kind of clarify the work groups that those have been applied to. But also does that opportunity also move with depending on all these – where these full trough capacity revisions are made. Thank you.
Ursula Hurley: Yes. So we have committed given the accounting change due to the Pratt & Whitney GTF compensation. We have to your point committed to offset a good portion of that. And so the team has identified opportunities to better leverage technology to drive better productivity in our frontline workforce and also being more strategic and thoughtful about maintenance, timing, as well as what level of investments take place when, obviously not at the expense of safety. And so these are areas that the team is doubling down on to help overcome the Pratt offset. In terms of the “opt out” that has trended where we thought it would. The areas that we’re covered within the “opt out” are support centers so corporate functions as well as some of the frontline work groups – and so we also – so I do think we’re pleased with the results.
The other area we’ve been diving into is real estate footprints and downsizing in high-cost cities. And then the third focus continues and always continues in terms of strategic sourcing and just working to be more thoughtful and strategic about the contracts that we enter into, whether it be pricing service expectations as well as variability to move with the business.
Chris Stathoulopoulos: Okay. Thank you.
Operator: Next question will come from Conor Cunningham with Melius Research.
Conor Cunningham: Hi, everyone. Thank you. As you’ve made all these network changes, I was wondering how you’re engaging your change in relevancy with your core customers. You didn’t cite any loyalty numbers or credit card sign-ups. I’m just curious on why the lack of comments there. Is there anything to dive deeper into that? Thank you.
Joanna Geraghty: Yeah. Sure. So I think we mentioned in Marty’s prepared remarks some loyalty commentary. But I think importantly, the network changes are focused around retrenching into our core strengths, which should drive improvement in relevance for our customers, who tend to be over-indexing in those areas. So I think New York, Boston, South Florida. We’re really pleased with loyalty, and we’ve had strong growth of our True Blue base below mosaic in Q1 versus Q1 2023. Our mosaics continue to grow. We have a much higher tax rate this quarter compared to year-over-year. We’ve seen healthy growth in customer spend, healthy remuneration from Barclays. So we’re very pleased with the trajectory. The majority of our mosaics now hold a JetBlue co-brand credit card.
So I think that’s a great indicator of the value that they place in the loyalty program and the value that the Barclays Co-brand card drives. The other piece I’ll mention is we’ve introduced a number of new perks this quarter. We will continue to introduce new perks, and we think we’ve got more opportunity with diversification of the card portfolio products. So overall, I think a lot of great progress there, but we’re focused on being highly relevant in our key focus cities. And over the last several years, some of that relevance came at the expense of those focus cities because we paused things for Spirit because the NEA was in place that we had to draw down from certain areas. I’m actually excited by this retrenching because I think it will actually drive even more relevance for our customers in those locations.
Marty, you have something to add.
Marty St. George: Yeah. Conor, I think if you actually were to look at the schedule patterns that we’ve had — most specifically in Boston for a lesser extent in Fort Lauderdale. And you look over the last five years. We’ve actually done a lot of compromising on the schedules to take advantage of things like the NEA. And frankly, going from 20-something flights to 50-something flights in LaGuardia, those planes came from somewhere and a lot of that came from schedule quality. So I would actually say the exact opposite, which is — this is actually going to supercharge schedule quality in some markets that we’ve actually neglected over the years because we were trying to do a lot of things at the same time. And I’m actually very excited about what this is giving us ability to do as far as reclaiming some of the strength that we’ve had historically.
Conor Cunningham: That’s helpful. And then I’ve heard a lot of talk about Latin America headwinds being somewhat transitory. And I don’t I’m trying to understand why you think that. Do you expect the market to shrink? Or do you believe it just takes a little bit of time for it to mature a little bit from here? Just trying to understand the transitory comment there. Thank you.
Marty St. George: So, I’ll make two comments. First of all, I think if you look at total ASMs to Latin America since short Latin, Caribbean since 2019 they’re up 50% to like 60%. Now, to be clear, there has been a permanent shift in the business leisure mix and a lot of those — or not a lot of those ASMs have actually been absorbed by the marketplace. That being the case, I think if you look at — go back six or nine months, when the industry was all talking about Florida, and how much capacity is sold into Orlando capacity tends to moderate when RASM is pressured. And frankly this is a period where RASM is pressured. And I think if you look at the way capacity ebbs and flows, it does tend to return to the mean and mostly because there’s opportunity cost for every ASM that we fly and every competitor fly. So frankly I think that we’re already seeing a bit of that moderation already and we expect to see it continue.
Conor Cunningham: Okay. Thank you.
Operator: Our final question will come from Stephen Trent with Citi.
Stephen Trent: Many thanks everybody, and appreciate squeezing me in. Just one very quick follow-up to Helane’s question earlier. When we think about your cash level, do you have a minimum cash balance in mind that you think about maintaining is you’re looking at your aircraft needs and the 2026 convert. I would just love your color on that? Thank you.
Ursula Hurley: Thanks Stephen. And, yeah, we target about $1.5 billion to $1.6 billion in cash on hand at any point in time. We actually ended the quarter slightly on the higher end of that. As a reminder, we have a $600 million revolving credit facility. So between cash on hand and the revolver we think that that’s a healthy balance. And also as a reminder, we’ve got a healthy unencumbered asset base as well that we can utilize at any point to raise funding when necessary.
Stephen Trent: I appreciate that. Thank you.
Operator: That will conclude today’s question-and-answer session. I will now turn the conference over to Mr. Patel for any additional closing remarks.
Koosh Patel: And that concludes our first quarter 2024 call. Thanks for joining us and have a great day.
Operator: And again that will conclude today’s conference. Thank you for your participation.
