JetBlue Airways Corporation (NASDAQ:JBLU) Q4 2022 Earnings Call Transcript

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Dave Clark: Sure. Thanks, Katie. And overall, we have a relatively small part of our total revenue coming out of contracted corporate shares, so this is a smaller pool for us than the industry at large. We are seeing measurably in our internal data, as well as in the public data that’s out there that JetBlue is taking share from, in the Northeast as a benefit of this. So we’re seeing it in our new accounts. We’re seeing a higher share from our existing accounts, and it’s a bit visible in the public data, which is, of course, delayed versus what we have proprietarily. So as we continue to see the Northeast ramp back up, we expect to see a bigger pie in general and then with JetBlue’s added share, that will certainly help us grow in these geographies a bit more than the industry overall.

Joanna Geraghty: I’ll also add from JetBlue’s perspective, this isn’t just about growing business. It’s also about growing leisure for JetBlue. If you look at the route announcement we’ve made, we are collectively growing business, but also leisure and VFR routes. So in all scenarios, we would be better off with the NEA than without the NEA. And there’s flexibility within that. So you’ve seen a number of new route announcements out of LaGuardia that are beginning later this spring. That’s reflecting a pivot to some more leisure destinations. So at the end of the day, this is for JetBlue and think about our network footprint in JFK specifically and, to a lesser degree, in LaGuardia, this is about both business, but also very importantly, leisure.

Catherine O’Brien: Very helpful. Thank you.

Operator: Thank you. Next question comes from Dan McKenzie at Seaport Global. Please go ahead.

Dan McKenzie: Hi. Good morning. Thanks. So a couple of questions here. The last comment in the script regarding earnings momentum later this year, leading to, I think you said, normalized earnings power next year or something to that extent. Are you using 2019 as a proxy for what normalized margins could look like? And, I guess, the reason I ask is, they range from basically 10% to 20% in the last cycle. So I’m just wondering if 2019 is a fair proxy or perhaps something a little better than that.

Ursula Hurley: Hi, Dan. Thanks for the question. So I was referencing, as we continue to build momentum throughout 2023 and the back half of this year, our intent is to build our margins close, very close to 2019 levels. So that’s the first benchmark, right, coming out of COVID is achieving a margin level equivalent to pre-COVID, with the intent beyond 2023 continuing to grow margins over the long-term. So we have a lot of conviction in our top-line forecast and the JetBlue-specific revenue initiatives as well as delivering on the structural cost to get back up to those 2019 margin levels in the back half of this year.

Dan McKenzie: Okay. And then, I guess, following up on Jamie’s question, the embedded in the outlook this year is continued contributions from the NEA. I know you expect to win the case and based on how it played out in court, my sense is JetBlue will probably win as well. But if there is an adverse decision, what’s built into the full year capacity and revenue guide? And should we expect it to change based on a potential adverse decision?

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