Savi Syth

Savi Syth asked about trends in corporate demand and market share, and how LATAM's premium offering strategy compares to competitors, particularly regarding whether demand is outstripping supply.

Answer

CEO Roberto Alvo confirmed that corporate demand recovered over a year ago and remains stable, with LATAM consistently gaining market share due to its network, execution, and frequent flyer program. He emphasized that LATAM's premium offering differentiates itself through its people-centric approach and continuous hardware improvements, such as new lounges and Wi-Fi on wide-body aircraft, maintaining a lead over competitors.

Savi Syth asked about trends in corporate demand, specifically if there was any acceleration or notable market share gains, and how LATAM views the competitive landscape regarding premium offerings, questioning if demand still outstrips supply.

Answer

CEO Roberto Alvo confirmed stable growth in corporate demand and consistent market share gains, attributing this to LATAM's network, execution, and frequent flyer program. He emphasized that attracting premium customers requires both hardware and "software" (people/culture), where LATAM excels. He acknowledged ongoing improvements in hardware (new lounges, Wi-Fi, Premium Comfort cabins) while asserting the organization's DNA and people are unmatched.

Savi Syth asked about the CASM-ex progression through the year, specifically if the 3.5% pressure in Q1 is expected to be the high watermark. She also inquired about corporate revenue growth in Q4 and the trends observed so far in Q1.

Answer

CFO Tom Doxey stated that while Q1 guidance is provided, he wouldn't go beyond that, but expressed confidence in understanding the full year's costs. President and CEO Bob Jordan reported mid-single-digit corporate business growth in Q4 (excluding government) and a very strong start to corporate bookings in January, expecting further upside from the new product and existing infrastructure.

Savi Syth asked about the CASM-ex progression through the year, specifically if the 3.5% pressure in Q1 is expected to be the high watermark. She also inquired about corporate revenue growth in Q4 and the trends observed so far in Q1.

Answer

CFO Tom Doxey stated that the company will provide quarterly guidance for unit costs but feels confident in its handle on full-year costs. CEO Bob Jordan reported that corporate business (excluding volatile government) was up mid-single digits in Q4, with a very strong start to Q1 bookings, driven by the new product offering.

Savi Syth asked for insights into the progression of year-over-year RASM for Q1 2026, assuming no demand environment change, based solely on the ramp-up of initiatives and current capacity plans.

Answer

CFO Tom Doxey stated that the $1 billion benefit from extra legroom and seat assignments remains intact for 2026, with other initiatives approaching run rate by Q1. COO Andrew Watterson highlighted modest Q1 capacity growth, continued load factor improvements, and yield improvements from seat fees and buy-ups starting January 27. CEO Bob Jordan further explained that the 2026 EBIT stack would include the $1 billion from assigned seating/extra legroom and approximately $700 million from a full annualized year of bag fees, along with other maturing initiatives.

Savi Syth inquired about the evolving strategy for Fort Lauderdale, specifically how it's changing beyond just capacity growth, including its role in connections, and followed up on whether the planned $500 million financing for the year is already factored into the interest expense guidance.

Answer

Marty St. George, President, explained that Fort Lauderdale, JetBlue's first destination, is expanding due to increased gate availability from competitor pulldowns, allowing for diversification beyond the Northeast and leveraging its premium market status and strategic location for connections. Ursula Hurley, CFO, confirmed that the $500 million financing is included in the $580 million interest expense guide, noting it might be dual-tranche to support convertible debt paydown.

Savi Syth from Raymond James Financial, Inc. sought clarity on the incremental EBIT contribution from Jet Forward in 2026 and 2027, and the expected macro tailwinds and headwinds for the EBIT bridge to 2027 profitability. She also inquired about JetBlue's liquidity and leverage position, and the anticipated financing needs over the next 12 to 18 months.

Answer

Ursula Hurley, CFO of JetBlue Airways, indicated that the $850-$950 million Jet Forward target is expected to contribute roughly one-third per year. She reiterated the 2026 goal of achieving a break-even or better operating margin, contingent on an improving macro environment, and highlighted premium initiatives and domestic first class as significant drivers. Hurley stated that the August 2024 capital raise provided a strong liquidity runway through 2025, with liquidity expected to exceed the 20% target. She projected a "modest" capital raise in 2026 to support new aircraft deliveries and a $325 million convertible debt maturity, emphasizing flexibility from over $5 billion in unencumbered assets.

Savi Syth questioned American Airlines about the expected timing and benefits of its operational investments at DFW, particularly how they will improve operations throughout the year. She also raised concerns about the industry-wide increase in flights at Chicago this summer, asking if the airport infrastructure can handle the elevated level of operations.

Answer

CEO Robert Isom explained that DFW's operational improvements, including facility upgrades, new technology like Smart Gating, and a 13-bank schedule, are expected to show performance throughout the year, with notable benefits during the summer. Regarding Chicago, he stated that American is putting significant effort into ensuring readiness for its planned growth, which is a return to previous levels, and cannot speak to other carriers' plans.

Savi Syth questioned American Airlines about the operational impact of DFW investments, the timing of their benefits, and concerns regarding the airport's capacity to handle the industry-wide increase in flights at Chicago O'Hare (ORD) this summer.

Answer

CEO Robert Isom detailed DFW's facility upgrades (Terminal F, A, C satellites) and technology implementations (Smart Gating, Connect Assist, new block time targets, 13-bank schedule) expected to show notable operational benefits, especially during the summer. For Chicago, he emphasized American's readiness and coordination with partners to manage the planned growth, which brings flying back to pre-pandemic levels.

On behalf of Savi Syth from Raymond James, Connor asked for details on Joby's 2025 flight test goals, particularly the objectives for testing in Dubai, and the advantages of involving FAA pilots in simulators early.

Answer

Founder and CEO JoeBen Bevirt explained that key goals include preparing an aircraft for hot weather testing in Dubai to support the service launch. He emphasized that FAA pilots have already flown test points in simulators and observed remote flights, which streamlines the process for official TIA flights where they will fly the aircraft themselves.

Savi Syth of Raymond James inquired about the outlook for the Government Services business in the U.S. amidst political spending discussions. She also asked for management's view on which global regions might be the easiest or have the most demand for initiating Advanced Air Mobility (AAM) operations.

Answer

President and CEO Chris Bradshaw responded that the company expects a continuation of current business in the U.S. government sector, with some optimism for incremental opportunities if the government seeks efficiencies through private sector partnerships. Regarding AAM, Bradshaw suggested that initial scaled operations might occur outside the U.S. and Europe, in regions like the Middle East or Africa, where state sponsorship is strong and regulatory hurdles may be lower.

Asked if the company is seeing booking improvements at the end of the quarter and sought clarification on whether the recent leasing transaction means the entire aircraft order book has been monetized.

Answer

It is too soon to see significant improvement in advanced bookings, but they are seeing some positive trends in the booking curve closer to departure dates. The transaction was not a monetization of the full order book; it was a structured sale-leaseback for 36 aircraft and a PDP advance for 52 others to enhance near-term liquidity, with the latter 52 remaining in Spirit's order book.

In a follow-up, Savi Syth from Raymond James requested an update on the cargo business, particularly the addition of a new 737-800 freighter, and asked about the progress of the European joint venture.

Answer

Chairman and CEO Jonathan Ornstein confirmed the addition of a 737-800, expanding the DHL cargo operation to four active aircraft and aiming for at least breakeven performance. He and President Michael Lotz added that the European JV is expected to receive its operating certificate by April 2023, positioning it as a platform for new technologies and near-term regional jet contracts.