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

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Robin Hayes: Hi, Dan, it’s Robin. I’ll take that. Look, we felt good about the case that we put forward. I don’t really want to speculate on the downside because one, we felt we put a very case forward — a good case forward. I think everyone in Boston and New York is enjoying more JetBlue flying as a result of the NEA. They’ve seen more routes. And back to the question earlier, it’s largely leisure because they were all — there were some leisure markets out of New York that we never had the ability to serve before without taking away from something else, and we can do that now. So, so many people have enjoyed the lower fares and the more choice. So it’s hard to foresee a negative outcome. It is possible, clearly. It’s going to be down to the judge and he’s going to make a decision.

And I think that if that comes to pass, we’ll look at it. There’s a number of options and we’ll deal with it. But we’re focused right now on hoping for a positive outcome and continuing the momentum behind the NEA because it will so much more competition and so much more benefits to everyone in the New York and Boston catchment areas.

Dan McKenzie: Yes. Understood. Thanks for the time, guys.

Operator: Thank you. Next question comes from Duane Pfennigwerth at Evercore. Please go ahead.

Duane Pfennigwerth: Hi. Thanks. I appreciate the questions. Just on fuel, which I guess was marked on the 13th of January, how do you calculate the jet crack spread? And if you calculated that today or yesterday or something before you were in the crush of earnings, where would you estimate that to be in a more recent time frame? And is there any hedge benefit embedded in the fuel guidance?

Ursula Hurley: Good morning, Duane. So you’re correct. We marked fuel on January 13 and this is consistent the same day that we historically marked fuel for our Q4 earnings call. If we were to mark as of this past Friday on the 20th, we would have about a $0.15 higher impact in the first quarter. So that’s just about over one point of margin in the first quarter. On a full year basis, we’re obviously still within the upper end of our range, even marking to last Friday, the 20th. How we mark fuel, so the prompt 12 weeks are off of the forward curve. And then beyond those 12 weeks, we actually use Bloomberg consensus. And the latter part of your question, there is a small hedge benefit vetted into the first quarter due to the 9% hedges that we have in place.

Duane Pfennigwerth: Great. And then maybe one for Robin. As you work down the path of the Spirit merger and learn more along the way, both about the process and about Spirit, any change in thinking about how complex this is going to be? I guess a different way to ask it, anything you learned that you wish you knew at the beginning of the process?

Robin Hayes: Thanks, Duane. No, I mean, I think as you know, these are incredibly complicated affairs. I think the good news is that there are a lot who have gone before us. And we’re always able to — when you’re following somebody else, you’re always able to learn from what worked and what didn’t work. We already have our integrated management team in place. There’s a number of work streams going on. We have a team appointed. And I couldn’t be more delighted with some of the work that’s already underway to prepare for this. We are working on an assumption of regulatory close in 2024. We also have to go through a single operating certificate process. In recent mergers, that’s been a 12 to 18-month time line after close, but you can start preparing for it now, which we have started to do.

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