Dan McKenzie : Hey, thanks. Good morning, guys. On the 30 A320s providing a growth tailwind, are they enough to make up the shortfall from the deferred deliveries and the GTF issues looking ahead, say, to 2025 and 2026?
Ursula Hurley : Yeah. Dan, it’s a good question. It’s definitely an opportunity to backfill some of the loss driven by the GTF. We are still working through the GTF exposure that we have in 2025 and beyond. So we look forward to sharing more about our multiyear growth rate projections at Investor Day in May.
Dan McKenzie : Yeah. Understood. And then the capital and cost discipline, that’s coming through loud and clear this morning. Does the CapEx now slope sufficiently downwards in 2025 and beyond, to get you to free cash flow? And at least how can we think about that journey?
Ursula Hurley : Yeah. So the deferral today, Dan, basically, it has us taking on average 24 aircraft over each year over the next five years. We’ve prioritized the A220 aircraft as we want to continue with the E190 exit. We believe that this sets us up to be more successful in getting this business back to profitability and hence, in return, driving free cash flow. So that was the essence of why we did the deferral. And I think there are other capital-light effective ways that we can continue to grow. And that’s a nod to the 30 aircraft that we could potentially extend or buy out on lease. So the way we’re going to go about driving a level of growth over the next few years is capital friendly.
Dan McKenzie : Okay. Thanks for your time, guys.
Operator: Our next question comes from Duane Pfennigwerth, Evercore ISI.
Duane Pfennigwerth : Hey, appreciate the time, and best of luck to Robin. Just a couple of questions for me. As you dig into the detail of your network, peel back the onion, can you just speak to the variability of your margins on a route level? Are there parts of your flying that are generating sufficiently high enough unit revenue to generate positive decent margins? Or are the margins fairly uniform across your network?
Joanna Geraghty : Yeah. Maybe I’ll take it and then I’ll throw it over to Dave. So Caribbean leisure franchise continues to do very nicely. Obviously, there’s some near-term RASM pressure with the capacity that’s flew to those markets. But that continues to be a strong hold for JetBlue. And as you think about the future, obviously, the focus on leisure, JetBlue Travel Products and the markets that it is in, that remains a very, very strong part of the network. On the good news front, domestic is trending well. Capacity has moderated across domestic. So that’s seeing some nice improvements. And then New York, and New York continues to improve. It’s most certainly been a bit slower than we’d hoped for, but it continues on a nice trajectory.
And as we think about the future, New York overall continues to be a really, really important part of our network. Transatlantic small part, but also doing extremely well. So we’ve got a number of kind of core geographies that continue to produce very nice margins for JetBlue. But in a world where we’re not growing, we need to be more selective where we fly. Dave, I don’t know if you have anything to add?
Dave Clark : Yeah, I’ll just add on that. Over the past couple of years, demand has been pretty fluid in different geographies. And as we come through the post-COVID environment, I think it’s now pretty clear as to what the new customer travel habits and preferences are, and we’ve been working to really actively align our network to those new demand areas. We did a fairly big network redeployed back in October. We had another one in January. I think you’ll see another one or two as we go through this year and just realign to really reinforce the core markets that are working well and to be more selective and redeploy some of the markets that we’ve seen demand shift away from over the last couple of years.
Duane Pfennigwerth : Okay. Thanks for that. And then just for my second question, can you talk a little bit about the deferrals in this backdrop? Not asking for like contract specifics, but normally, there would be penalties and escalators for deferring aircraft, but given how tight things are, could we actually envision incentives or maybe some reverse brokering for doing that right now, just given how tight things are?
Ursula Hurley : Dan, I’m not going to comment on my commercial negotiations with Airbus. We appreciate their partnership. I do believe that this was a win-win for both them and ourselves over the next few years.
Duane Pfennigwerth : Okay. Appreciate the thoughts.
Operator: Our next question comes from Conor Cunningham, Melius Research.
Conor Cunningham : Hi, everyone. Thank you. Congrats, Robin and Joanna. Can you maybe help a little bit in terms of the comments on headcount? I’m just you mentioned early out, but I was just trying to understand a little bit more in terms of actual magnitude and maybe comping the overall reductions in headcount there. And if you could just maybe speak to the cadence in CASM ex as that kind of plays out through the year? Thank you.
Joanna Geraghty : Sorry, I couldn’t hear — I think it’s CASM ex. So I’ll throw the second part of the question, Ursula, just on headcount, we just launched our voluntary sort of opt-out program. It covers our support center, to salaried with the goal of trying to reduce fixed cost in a world where we’re not growing and then it extends to a few of our operational — operational groups in the front line, but it’s literally three days old. So we’re not really in a position to provide more details, but we’re trying to do it in a thoughtful way and provide our crewmembers of opportunities outside of JetBlue to the extent that they want to pursue that. Urs, maybe on the CapEx question.
Ursula Hurley : Thanks, Joanna. Yeah. Just on CASM ex, I do want to take a victory lap on 2023. We actually hit the full year controllable cost guide that we set last January despite 1.5 points of headwinds driven by ATC and weather throughout the year. So pleased that we delivered and executed on what we said we were going to do in 2023. In terms of 2024, I want to note, we’re up mid- to high single digits with growth down low single digits. I do believe that this is a good and confident guide. We have been ruthless in terms of addressing the fixed cost base, given we’re not growing. We are on track to exceed the higher end of our structural cost guide. And then we’re continuing to capture value given we’re progressing with the E190 exit from a fleet modernization program.
