Jetblue Airways - Earnings Call - Q1 2021
April 27, 2021
Transcript
Speaker 0
Good morning. My name is Faith. I would like to welcome everyone to the JetBlue Airways First Quarter twenty twenty one Earnings Conference Call. As a reminder, today's call is being recorded. I would now like to turn the call over to JetBlue's Head of Treasury and Investor Relations, Ursula Hurley.
Please go ahead.
Speaker 1
Thank you, Faith. Good morning, everyone, and thanks for joining us for our first quarter twenty twenty one earnings call. This morning, we issued our earnings release and a presentation that we will reference during this call. All of those documents are available on our website @investor.jetblue.com and have been filed with the SEC. In New York to discuss our results are Robin Hayes, our Chief Executive Officer Joanna Garrity, our President and Chief Operating Officer and Steve Priest, our Chief Financial Officer.
Also joining us for Q and A are Scott Lawrence, Head of Revenue and Planning Dave Clark, VP of Sales and Revenue Management and Andres Barry, President of JetBlue Travel Products. This morning's call includes forward looking statements about future events. Actual results may differ materially from those expressed in the forward looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For additional information concerning factors that could cause results to differ from the forward looking statements, please refer to our press release, 10 Q and other reports filed with the SEC. Also during the course of our call, we may discuss several non GAAP financial measures.
For a reconciliation of these non GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website. And now I'd like to turn the call over to Robin Hayes, JetBlue's CEO.
Speaker 2
Thank you, Ursula, and good morning, everyone. And for those regulars on the call, you will notice a change of voice. So Ursula, congratulations on your new position and assuming the Investor Relations portfolio. Also my thanks to Juan Carlos and Scott here in the room with me who run our IR team. And also, obviously, we have to say farewell to Dave Finson.
He's not leaving JetBlue, but Dave has done an amazing job as the head of our IR team for many years. And like many leaders in JetBlue, he's been doing double duty for the best part of a year. So Dave is now leading, our efforts as VP of our of the NEA, which is a partnership with American Airlines. And David's single mindedly focused on delivering the benefits of the NEA in terms of growth and low fares for JetBlue and our customers. So Dave, the very best in your new role as well.
And as Ursula said, we also have Andreas Barry joining us on the call today as a new addition, President of JetBlue Travel Products. So with that, let's get on with the call again. Good morning, everyone. And as we've done since the start of the pandemic, I'd like to take a moment to remember another crew member we have lost to COVID nineteen. Alexander Rotas was a member of our JetBlue family for nearly a decade.
Alex joined us in October 2011 as a ground ops crew member in Tampa, and our hearts go out to Alex's family, friends, and the fellow crew members that he worked with as it does to all of us who have been impacted by COVID nineteen. I would now like to thank start by thanking our amazing 20,000 crew members for their extraordinary work through the most challenging time in our history. They continue to work together to serve our customers with just such incredible passion and determination. Our crew members have demonstrated our decisiveness as a team to overcome the many challenges presented by the pandemic while setting the foundation for JetBlue's recovery and future success. Starting with the presentation, let's move to slide four.
I'll start with an update on our ESG efforts, an area where JetBlue continues to lead the airline industry and generate value for our stakeholders. We are taking actions to reduce our impact on the environment and address societal changes and demand, mitigating business risks and enhancing our long term financial returns. I will provide an overview of the targets we announced last quarter. Starting with the environment, our ultimate goal is to achieve net zero carbon emissions by 2040. Since last July, we achieved carbon neutrality for all domestic flying using carbon offsets.
We've also set interim twenty thirty goals, which include reducing emissions per ASM by 25% from twenty fifteen levels, converting 10% of our jet fuel to sustainable aviation fuels, and changing over half of our ground support equipment vehicles to electric. In the short term, we are investing in next generation fuel efficient aircraft to reduce our emissions and increase returns. Our technology venture subsidiary is positioning JetBlue to help us chart a path towards net zero emissions over the long term with investments in start up companies like Joby and Universal Hydrogen. Moving on to social. We're focused on empowering our crew members and protecting our talent pipeline through our enhanced diversity, equity, and inclusion strategy.
The recent Derek recent Derek Chauvin verdict reminds us how George Floyd's murder has been a catalyst for change. And over the past year, we have examined we have reexamined how we can help tackle systemic societal racism by focusing on diversity and equity at JetBlue. We have accelerated our efforts towards building a more diverse slate of leaders and are creating greater access to select career paths with our emergent emerging talent platform, including our new gateway college program. We have also committed to grow our spend with minority and women owned businesses, and we are ensuring our brand strategy enhances trust and build connections with customers and the diverse communities we serve. Lastly, regarding governance, we have embedded controls and increased our accountability with oversight from an ESG subcommittee of our Board of Directors.
In addition, we recently incorporated ESG factors as performance measures into our senior leadership incentive compensation plan. Turning now to Slide five. In the last quarter, we reported an adjusted loss per share of $1.48 Although EPS remains in negative territory, we have seen meaningful progress in the demand recovery and have started to gain momentum from the groundwork we have laid to emerge from the crisis as a stronger JetBlue. Since mid February, we have seen a meaningful rebound in leisure travel. We are encouraged by the improving booking trends and with COVID-nineteen vaccinations rolling out, we believe that ongoing demand acceleration will continue into the summer.
We are bringing back capacity in response to demand and we plan to capture a growing share of improving revenue from our customers in our leisure and VFR or visiting friends and family visiting friends and relatives markets. More importantly, we are taking a number of actions aimed to bring us back on a path towards superior margins. Moving to slide six. Looking back to our work from 2020, I could not be more confident in our future. Our teams continue executing our comprehensive recovery plan, reducing our cash burn, rebuilding our margins and repairing our balance sheet.
Starting with cash burn. We have seen positive cash from operations for March, and this milestone is our first step towards achieving positive EBITDA and returning to profitability. We expect our improving operating results and balance sheet will support JetBlue over the coming months as leisure demand approaches pre pandemic levels. To rebuild our margins, we have been executing network, commercial, fleet cost and capital allocation initiatives designed to help us rebuild our margins and repair our balance sheet. With respect to network, we are focused on strengthening our six focus cities and accelerating our recovery.
We have taken advantage of unique opportunities
Speaker 3
that would
Speaker 2
have not been available to us before the pandemic. We have also expanded and diversified our route map to better serve areas of relative demand strength, and some markets will remain long term strategic investments for JetBlue. In New York and Boston, we forged a unique alliance with American Airlines that delivers low fares, a trusted brand and outstanding service to more customers. Lastly, we will soon announce our inaugural flight to London, bringing both our award winning mint and cod products and low fares to the Transatlantic market starting later this summer. Moving to the revenue front, we continue to implement our plan to improve our unit revenues over the coming years.
I will highlight three areas where we have made significant progress and Joanna will provide additional details in a couple of minutes. The first is our latest update of fare options, which provides our customers with more low fares. Secondly, we are in the contracting stages of our co brand credit card RFP, which we expect will meaningfully enhance the economics of our loyalty program. Third, we are seeing momentum with JetBlue Travel Products. Over the last two months, JetBlue Vacations has performed well ahead of twenty nineteen levels.
We are very excited about last month's launch of Paisley, a new travel site that leverages smart technology to provide tailored offers to customers based on the individual itineraries. In its early days, we are already seeing great customer engagement and believe this will be a significant contributor for future earnings growth. On the cost front, we remain committed to executing our plan to keep our costs low as capacity comes back. Our low cost business model enables us to compete with low fares while driving higher margins. We continue to reshape our fixed and variable cost base to provide a path to produce better than 2019 CASM ex fuel in 2022.
Regarding fleet, our order book solely consists of next generation aircraft that will help us execute our network plans while producing structurally better margins. We are thrilled that our first A220 entered into service yesterday. We've also started selling TransCon flights on our first A321neo low density aircraft. And tomorrow, we expect to take delivery of our first A321 long range aircraft, both aircraft types equipped with our incredible next generation mint cabin. Lastly, we plan to maintain a balanced approach to our capital allocation, investing in aircraft as we build our margins while reducing debt.
Last quarter, we took a step towards optimizing our capital structure, reducing our overall cost of funding with a successful convertible debt offering. In conclusion, as we continue to navigate the challenges of the current year, we are so optimistic about our future. We will make the changes needed to weather the crisis while staying true to our mission and values and placing people people and culture at the heart of our company. We have a truly great opportunity ahead of us and have laid the foundation to make JetBlue a stronger airline for years to come. Joanna, over to you.
Speaker 4
Thank you, Robin. I'll start with my deepest thanks to our crew members for ensuring a safe operation as we ramp up capacity in response to accelerating demand. We are pleased that more people in The U. S. Have been vaccinated and quarantines and testing requirements for travel have been removed in the Northeast and other key locations across our network.
We are setting up our operational our operation accordingly to serve a growing number of customers returning to JetBlue. Moving to Slide eight. In the first quarter, our revenue declined 61 year over two, a six point sequential improvement from the prior quarter, sitting at the better end of our latest planning assumption. While we initially anticipated trends improving during the quarter, we saw a bigger than expected step up in demand for leisure travel beginning in mid February. Our cash revenue increased from $6,000,000 per day in early January to $15,000,000 by the March.
Additionally, the length of our booking curve is now largely back at pre pandemic levels as customers increasingly plan further ahead for their travel with JetBlue. As expected, first quarter average load factors finished at 64%, and we ended the quarter with load factors in the mid-70s. We are pleased with the broad improvement in demand across all of our geographies. Our Latin And Caribbean franchise again proved resilient and recovered quickly from the setback that followed the CDC's order requiring testing for international arrivals. Demand to our Florida markets increased driving the quarter, and our Transcon region also strengthened as quarantine measures relaxed in our East And West Coast focused cities.
For the 2021, our planning assumption for revenue is a decline between 3035% year over two, the largest sequential improvement in our revenue since the pandemic started. We expect unit revenue to improve meaningfully, driven by both increasing load factors and improving yields. Our system load factors have been in the mid-70s since the April, and we expect them to remain at that level or higher through the quarter. Based on forward bookings, we are optimistic about the upcoming summer months. In April, we have seen cash revenue average as high as $17,000,000 per day.
Our latest bookings and survey data show that customers are increasingly willing to take trips they have put off since last year. We are also seeing increasing attach rates for our JetBlue Vacations products, which signals that leisure traffic is ramping up well. However, we will remain flexible given the potential for future restrictions that could slow down a return to travel. As Robin mentioned, we have continued to deploy initiatives to grow our unit revenues as capacity normalizes towards pre pandemic levels. We updated our fare options platform to more competitively cater to price sensitive customers with our Blue Basic offering.
With our in flight product and changeability, Blue Basic is now the best value proposition in the ultra low fare segment. Our new Blue and Blue Extra offerings also provide unique features, such as guaranteed overhead bin space and flexibility, addressing long standing customer frustrations. We estimate these updates will drive an approximate one percent increase in unit revenue in steady state. In addition, we continue to make progress with our new revenue management system. The value of these tools will become increasingly beneficial as industry wide demand recovers and load factors continue to rise.
We also extended our booking window to 03:31 days and have seen an immediate and significant booking impact following the rollout. In the medium term, we expect a meaningful increase in our revenue base from our network investments and notably from our alliance with American Airlines. We also anticipate to start reaping the benefits of our investments in JetBlue Travel Products. So far this year, we have seen attach rates, gross sales, bookings and margins at all time highs. We believe this performance is a result of the product revamp we put in place in early twenty twenty, our updated pricing strategy and significant advancements in merchandising and targeted marketing capabilities.
Finally, we are getting ready to announce the outcome of our co brand RFP. We believe this will help us close the gap in loyalty revenue to our peers over the next few years. We anticipate sizing our revenue initiatives and the expected dollar contribution to earnings as our baseline revenue stabilizes over the next year. Turning to capacity on Slide nine. In the first quarter, our flown capacity declined 41% year over balancing supply and demand through managing our capacity to maximize revenue and rebuild our margins.
For the 2021, our planning assumption is for capacity to decline approximately 15% year over two, given the strong sequential improvement in demand. Our schedules are firm through the June. Over the next few weeks, we plan to make some additional changes to manage the peaks and troughs for the rest of the summer. We are well positioned to ramp our capacity in the coming months and expect only 10 aircraft from our fleet to remain in storage for the summer. Our thoughtful approach to offering crew members opt out and voluntary time off programs early on during the pandemic has allowed us to remain nimble and help us scale back as demand normalizes.
Over the past year, our crew members have continued to undergo training and are returning to work in numbers to scale up our operation, and we are hiring in specific areas to address rapidly increasing demand. We will, of course, maintain our flexibility to scale utilization up or down as needed while protecting the financial health of JetBlue. In terms of markets, we are very pleased with our VFR and leisure performance. This quarter, we added service to Miami and Key West, which further expands our relevance in South Florida. Two weeks ago, we operated our first flight to Guatemala City.
And in mid June, we plan to launch our inaugural flight to Los Cabos, Mexico. We're making great progress implementing our Northeast alliance with American Airlines, which we expect will provide a path for JetBlue to grow profitably over the coming years and to better utilize scarce infrastructure at New York and Boston airports. We launched code sharing in late February and announced a further expansion last week. Our customers are benefiting from new destinations, improved schedules, more frequencies, and, of course, more low fares. To date, the NEA has announced a total of 58 new markets, 32 flown by JetBlue, and we are looking forward to additional announcements in the future.
Through the alliance, both JetBlue and American will have new growth opportunities in the Northeast. For example, we expect to triple our flights at LaGuardia Airport from 16 flights per day prior to the pandemic to more than 50 by the 2022. Notably, we expect to reach our largest ever number of flights in New York later this year. Our customers will benefit from more than just a greatly expanded network and more low fares. For our TrueBlue members, we will offer the ability to earn points and redeem travel on American.
And we are currently working to establish reciprocal benefits between our loyalty programs. I will close with a big thank you to the many JetBlue teams who are working tirelessly to ramp up the operation and serve our customers. While we are pleased with demand returning so quickly, we acknowledge the tremendous hard work the team put in over the past two months. Thank you for remaining true to our values and setting the foundation for our future success. With that, over to you, Steve.
Speaker 3
Thank you, Joanna, and good morning, everyone. I'd also like to thank our crew members and leaders. I could not be prouder of their resilience to overcome the challenges presented by the pandemic and to ensure the future success of JetBlue. I'll start on slide 11 with a brief overview of our financial results for the quarter. Revenue was $733,000,000 down 61% year over two.
Operating expenses were down 43% year over two. Excluding the benefit from PSP2, operating expenses were down 26% year over two. Adjusted EBITDA loss was $458,000,000 and GAAP loss per share was $0.78 and adjusted loss per share was $1.48. As Robin mentioned, in March, we reached breakeven cash from operations, and we took a first step towards repairing our balance sheet. Starting with our operational performance, our first quarter adjusted EBITDA was ahead of the range we anticipated in mid March.
This was a result of improving revenue trends and continue to successfully manage our cost structure despite increasing fuel prices. For the second quarter, we estimate that EBITDA will range between negative $100,000,000 and negative $200,000,000 reflecting an acceleration of demand partly offset by cost pressures from fuel prices and airport rents and landing fees. On an EBITDA basis, we believe that we will reach breakeven in the third quarter and expect to remain in positive territory through the end of the year. Turning to slide 12, we are managing through the volatile demand environment with a laser focus on cost control as we bring back capacity to meet demand. During the first quarter, our adjusted operating expenses declined 26% year over two, better than our initial assumptions and despite higher fuel prices.
This excludes a payroll benefit of $289,000,000 from PSP2. Our planning assumption for the second quarter is a reduction in our total operating expenses of approximately 8% year over two. This quarter over quarter increase of 18 points is primarily due to scheduled increases in capacity as we ramp up the operation to serve customers during the summer. As we navigate the current environment, we'll continue to manage our cost structure while mitigating near term headwinds, namely higher fuel prices, rent and landing fees, maintenance and labor costs driven by the scale up. We are pleased as a result of our aggressive cost management, we are starting to see CASM ex fuel declining meaningfully from 41% year over two in the first quarter to 17% in the second quarter.
Moving to Slide 13. Since the start of the pandemic, we have gone deep on our cost structure with a focus on our fixed cost base, adding to the continued momentum from our structural cost program. We expect to achieve better than 2019 CASM ex fuel in 2022, providing a path to expand our EBITDA and ultimately our pretax margins. Last quarter, we announced our plan to reduce our 2021 fixed costs between a 150,000,000 and $200,000,000 compared to 2019. We intend to preserve these savings as we grow our capacity back to pre pandemic levels.
Our work focuses on five key areas. One, driving automation and rolling out technology to improve processes and support functions. Two, driving efficiencies in our IT infrastructure, for example, by consolidating our data centers and moving data and applications into the cloud. Three, consolidating our real estate footprint in both support centers and airports. Four, continue to rationalize our business partner spend.
And five, remaining disciplined in limiting our discretionary spend. Regarding our variable costs, we continue to focus on driving efficiencies and productivity across the business as we bring back our frontline crew members to support the operational ramp up. We expect to continue to see the run rate savings associated with our structured cost program, and we will continue to execute our plan to increase our fuel efficiency. For the rest of 2021, we expect some headwinds related to maintenance as we approach 2019 capacity levels, a continuation of higher rents and land increase in our airports, as well as some inflationary headwinds. I'd like to thank our teams again for their hard work and engagement to rebuild our margins as we execute our revenue and cost initiatives.
Now turning to liquidity on slide 14. At the March, our unrestricted cash and short term investments were $3,200,000,000 or 40% of 2019 revenue. Given our strong liquidity and improving revenue trends, we are switching our focus to repairing our balance sheet and lowering our total cost of debt. In March, we successfully executed a $750,000,000 convertible debt offering with a coupon of 05%. We partially used these funds to pay down our $550,000,000 revolver facility.
In the first quarter, we also received over $500,000,000 from the second round of payroll support from the federal government to support the salaries, wages and benefits of our crew members. We expect to receive an additional $76,000,000 in the forthcoming days related to PSP two. We are grateful to the administration for their continued support of our industry and for crew member jobs. We remain very comfortable with our liquidity position. Given our expectation for recovery through 2021 and continued support from the federal government, at this time, we do not intend to draw down on the remaining $1,800,000,000 available to us under the CARES loan, act program.
As a result, our loyalty program remains our most valuable unencumbered asset. In the event we need additional liquidity, we believe we can access attractive and competitive financing in various markets. Moving to slide 15, In the first quarter, we took delivery of three A321neos, including our first aircraft with our reimagined mint cabin. The fleet currently stands at two seventy aircraft, and we expect to take delivery of six additional shells during the second quarter, including two A220s, two A321neos, and two A321LRs. We continue to forecast approximately $1,000,000,000 in CapEx spend for 2021, the majority of which consists of aircraft, which we expect to fund using cash.
As the first a two twenty enters into service, we are particularly excited about the outstanding economics it provides with 30% better cost efficiency per seat compared to our E190s. We expect to take 69 additional deliveries through the middle of the decade, including seven this year. We believe this fleet will be pivotal to helping us reshape our cost structure and growing our margins. Moving to Slide 16. At the March, our debt to cap ratio was 59%, a small increase from the prior quarter, driven by the opportunistic convertible debt offering we made in March to pay down the revolving credit facility and lower our cost of funding.
Going forward, as we produce positive cash from operations, we plan to prioritize paying down high cost debt with the goal of reducing our weighted average cost of debt to below pre pandemic levels. We also intend to continue a strategic and measured approach to return to investment grade metrics and a debt to cap ratio of between 3040%. We believe that as we grow back, our amazing culture will continue to power our strategy. We are confident that our network and commercial initiatives, cost reduction efforts, and long term investments will put us back on a path to superior margins. On behalf of the JetBlue leadership team, we want to again thank our crew members as well as our business partners, our communities, and our owners for all of their support.
With that, we will now take your questions.
Speaker 1
Thank you, Robin, Joanna, and Steve. Faith, we're now ready for the question and answer session with the analyst. Please go ahead with the instructions.
Speaker 0
Thank you. Your first question is from Savi Syth from Raymond James. Your line is open.
Speaker 5
Good morning, everybody. I was just kind of curious, on especially on the cost side, you know, what's what expectations are kind of embedded behind your EBITDA outlook for the 2021. Just wondering if there are some kind of ramp up costs that go away and and generally, you know, what you expect from a demand standpoint.
Speaker 3
Hi. Good morning, Savi. Steve here. It's a good question. I I think the first thing I would say is, obviously, in a high fixed cost capital intensive business, with capacity down even 15%, there continues to be inherent inefficiencies in the cost structure.
But as you start to continue to grow capacity, that alleviates over time. We are continuing from a on a quarter to quarter basis in terms of cost structure as we grow, to drive more efficiency. So if you think about, q one, to q two, our capacity is up 50% quarter over quarter, but our nonfuel costs are only going up 22%. So you have got those inherent efficiencies as you scale back. But, I'm sure some of the essence of your question is regarding some of the headwinds that we've discussed.
Obviously, as we embed the fixed cost initiatives that we are working through in 2021, we will continue to see efficiencies associated with that. Certainly, are some material inefficiencies, that will remain in the second quarter until we scale back. Think about the likes of pilot minimums, in terms of hours, which are obviously additionally impacted by the CARES Act. Thirdly, as we get ready for, the summer, we are incurring some costs as we ramp up the summer peak. Think about some crew member costs associated with labor and maintenance to make sure that we have the fleet ready.
And then as we've always talked about, rent and landing fees, I think you'll start to see some alleviation in that when industry traffic continues to normalize because, you know, with the particularly those cities that have seen a precipitous drop in traffic, they have been impacted quite clearly. And and, again, when that normalizes, you'll see some sort of rationalization of costs. So there's a number of areas that I think will become more efficient as we navigate through the rest of the year and the business ultimately scales up.
Speaker 5
That's helpful color, Steve. Thank you. And and and, Joanne, if I might quickly ask, on the you know, mentioned that majority of the new markets are performing in line to better than expected. Just curious if there are any common trends or characteristics in the new routes that are working versus those you had to kinda pull back on.
Speaker 4
Yes. Thanks, Savi. Great question. I think the two trends I'd say, leisure is obviously performing well. And those jurisdictions or locations where there are travel restrictions in place and or higher case counts tend to lag some of the other markets that we're seeing performance in.
But overall, very pleased with the performance of the new markets that we've added. Very encouraged there will be some that will be lasting markets. We've also, as we always do, been pretty disciplined in the markets that are underperforming and making sure that we scale those back.
Speaker 5
Excellent. Thank you.
Speaker 0
Your next question is from Jamie Baker from JPMorgan. Your line is open.
Speaker 6
Hey, good morning, folks. I assume you have pretty detailed financial forecasts at least for the first year or two of the Transatlantic expansion. Can you compare how those forecasts are looking today to what they were in early twenty twenty? Obviously, the Heathrow outcome might be different than what you had planned pre COVID, but I'm curious if your overall Atlantic forecasts have strengthened and if so, by how much?
Speaker 2
Hey, Jamie. Good morning. It's Robin and I'm gonna ask Scott to take that one.
Speaker 7
Great.
Speaker 8
Hey, Jamie. I appreciate the question. And, you know, obviously, the the Transatlantic has seen quite a bit of of change here. I think the the first thing I would say is that we have a strong fundamental offering here and the ability to disrupt the the premium cabinet is something that we feel very confident that we're gonna be able to do. I think if you sort of look at the transatlantic vis a vis what what we expected pre COVID, you know, it's clear that the initial portion of this is still gonna be in a recovery mode.
I think for us, you know, we had, you know, based our business plan around the concept of people actually paying their own money to to sit in business class rather than, you know, people, you know, looking at that the fares that historically have been somewhat extortionate with corporate discounting in the front cabin. So, again, I think if you look overall at our forecast and our potential as we move forward, I think it is continues to be very strong. It continues to be very similar to what we initially expected. And we look to move forward confidently as we begin transatlantic service.
Speaker 6
Okay. That's helpful. And then second, a few years ago, the LaGuardia perimeter rule was a topic. JetBlue publicly objected to a potential relaxation of the rule, if I recall. But if we fast forward to today, I mean your fleet capabilities have obviously expanded.
You've got the relationship at LaGuardia with American. I mean is Perimeter something you've discussed with American? Are you permitted to? And could it be part of the evolution in the relationship at LaGuardia?
Speaker 2
Thanks, Jeremy. I'll take that. And first of as is a tradition on our April call, let me wish you a very happy birthday week.
Speaker 9
Thank you very much.
Speaker 2
But no. Look. Our view on that hasn't changed. I mean, whilst our alliance with American has allowed us to make some positive changes in our LaGuardia footprint. It's still a very, fraction of our largest competitor there.
The New York airports work as an ecosystem and, you know, we're talking about making some significant investments to our partners at JFK. And as such that if the primitive rule was to ever be modified or or changed, you know, it's our view that that would need to come with a significant slot divestiture to make sure that sort of new ecosystem continue to work together.
Speaker 7
Okay. Fair enough. Thanks for the update. Appreciate it. Take care.
Speaker 0
Your next question is from Joseph DeNardi of Stifel. Your line is open.
Speaker 10
Thanks. Good morning. Joanna, you talked about co brand economics improving and I think you said closing the gap between your earnings and peer earnings over the next few years. I just want to understand kind of what the expectations are. In 2019, you guys reported about $200,000,000 in fee revenue from the card.
Alaska reported $465,000,000 Is it your expectation that you can close that gap within a few years?
Speaker 4
Joe, thanks for the question. Yes. I mean, we're very encouraged by what we're seeing with the results of the co brand RFP. As Robin mentioned in his opening remarks, we are in the middle of contract negotiations with the finalists. And I describe it as a meaningful improvement over existing economics of our deal, and we'll be prepared to discuss more in the coming weeks.
Speaker 10
Okay. That's helpful. And then, Steve, just on the CASM expectation for kind of improving CASM on the same level of capacity. Can you talk about maybe what's working against you when you take into account the structural cost initiatives and just kind of having that capacity production with a leaner organization? What are some of the headwinds kind of moving against you all?
Thank you.
Speaker 3
Yeah. Thank you, and good morning, Joe. It it really just, goes back to a couple of other things in a in a relatively short term that I just discussed with Sare. I think, you know, that in an industry like ours, high high fixed cost, capital intensive, even, short levels of, capacity reductions sort of have a headwind. I think as we sort of enter 2022, undoubtedly, rent and landing fees are sort of a key aspect in terms of a a headwind that needs to sort of normalize.
General labor and price inflation are other items that we need to sort of think about, as we sort of go through. And on the assumption that, we continue to get the fleet and we'll work forward as we go through 2021, making sure that our maintenance is in good shape as we sort of get to the year. But, obviously, outside of those three areas as we get into 2022, there's a whole host of work that we completed coming into the 2020 around the structural cost program that will meaningfully change the paradigm from a variable standpoint. And, the 150 to $200,000,000 of fixed cost initiatives which I've outlined in our prepared comments, which will also offset some of those cost pressures.
Speaker 10
Helpful. Thank you.
Speaker 3
Thanks, Joe.
Speaker 0
Your next question is from Brandon Oglenski of Barclays.
Speaker 11
So I guess for Robin or Steve or Joanna, can you talk to your ability to get back to 2019 profitability levels or not even or maybe even exceed it like you had in your prior plan? What are the proper thresholds here? Do you guys need to get back to where you were from a capacity standpoint and then see revenue recover? Or are there other levers that you guys can pull?
Speaker 3
Hi, Brian, and good to hear from you this morning. Steve here. I would sort of go back a little bit in the way back time machine and think about how we were coming into 2020 with our $2.50 to $3 of EPS and the five building blocks that were behind the whole of our business from a commercial, cost fleet, capital allocation perspective. And as we've gone through the pandemic, not only have we looked from a defensive standpoint, but we've all also been on the offense. So I've talked extensively about our cost structure both from a structured cost standpoint, really focusing around the variable efficiencies, but also on the fixed side.
So we'll we'll sort of pull that to one side. The fleet initiatives very much stand in good stead. And as Robin referred to, we took our first a t 20 yesterday, Incredibly excited about the potential economics that bring to JetBlue as we go forward from a margin standpoint in addition to the three twenty one neos, which are gonna continue to ramp in the fleet. And then there's a whole host of revenue initiatives that we're driving forward with. Joanna talked about the co brand RFP.
We've talked about, the Northeast Alliance that we're incredibly excited about, which will continue to drive lower fares, and growth for the Northeast with American Airlines partnership. You think about the revenue management initiatives that we're sort of driving in place, and then the incredibly exciting, travel company that we're developing with JetBlue Travel Products and the great work that Andres is going for. So when you think about cost, you think about commercial, you think about fleet and the acceleration that we've taken place with regards to balance sheet repair and capital allocation, I feel very optimistic about, the future margin capabilities of JetBlue as we as we evolve into next year and beyond.
Speaker 11
Steve, appreciate that response. And I guess, Joanna, as a quick follow-up, you know, I think the restrictions in the Northeast and specifically New York have been lifted. In fact, I don't think I get harassed by the government anymore getting off a plane. So have you seen any pent up demand in these regions? And, you know, could revenue be exceeding to the upside here as people realize that it's a lot easier now?
Speaker 4
Yeah. I mean, it's it's a great question. We were very pleased to see the Northeast restrictions come off, and I think that's giving us some wind in our sails as we step into the summer time frame. Overall, the network is performing well across multiple geographies, which has been fantastic for us, particularly as we step into the summer in our peak travel period. So very encouraged by New York, very encouraged by Massachusetts.
Also encouraged by The Caribbean, frankly, and what we're seeing down there. The Bahamas updated their guidance last week. So that's that's all good news, and we continue to encourage the islands to kind of work in a coordinated fashion to reopen in a safe, thoughtful way that makes it easy for customers to travel there.
Speaker 7
Thank you.
Speaker 0
Your next question is from Helane Becker from Cowen. Your line is open.
Speaker 12
Thanks very much, operator. Hi, everybody, and thanks for the time. On the revenue guidance that you're giving for the second quarter, I know this is a short term question, but how should we think about the percentage that's traffic improvement versus the percentage that's fares improvement? In in other words, is there opportunity to raise fares as demand increases here through the summer?
Speaker 4
Thanks, Helane. Great question. Just think about in terms of fifty fifty. I think the good news for the summer is we're growing TRASM while we're growing ASMs, and that's being driven by double digit improvements in both load factor and in yield. I'll also point out that the booking curve is normalizing, which is giving Dave Clark and his team an ability to build better yield manage our our flights.
So that's been a a great a great change as well.
Speaker 12
Okay. Thank you. I think I think that was it. Those were my, like two questions. Thanks.
Speaker 0
Your next question is from Duane Pfennigwerth from Evercore. Your line is open.
Speaker 9
Hey, thank you. Good morning. Question for Robin, if still around, maybe more of an industry question. The EU commentary on letting vaccinated U. S.
Passengers travel to Europe, what have we actually learned, I guess, this weekend? What do you view as the next steps from a U. S. Perspective? And how would you handicap the odds of this getting implemented in time to book summer travel?
Speaker 2
Yes. No. Thanks, Duane. By the way, where do you think I went? It's our earnings call.
Speaker 9
Well, you're doing a good job of deferring and delegating.
Speaker 2
Well, it's a team sport, isn't it? Fair enough. Anyway, no, no. Look, it was a positive development. And I think it's I I just wanna build on, you know, what Joanna just said because I think we're seeing this now in more and more markets.
You know, we started seeing it in the domestic market as states, you know, starting to move some of the restrictions. We started seeing in in some of the Caribbean markets as they sort of, you know, figured out what works and and doesn't work and, you know, trying to strike strike that right balance between public health and and making markets accessible. And, you know, there's a number of EU countries, as you know, where tourism is a significant driver. And, so, you know, I'm confident. Look.
I think it ultimately depends on a country's ability to bring down their case count and vaccinate people because that's what gives you a sense that sort of some of the case count reductions are permanent. You know, what we've seen here in The US and other markets is the case count start to come up again, restrictions go back in, that definitely impacts traffic. And so, you know, I think providing the EU and the country and the EU can kinda catch up with their vaccination program, you know, hopefully make that makes the summer open and accessible. And if I look at The UK, because obviously that's the top of our list, you know, they've done a terrific job with the vaccines. And I think they're really on track to some form of opening up here for summer.
Speaker 9
And then if you're willing to comment on it, question for the team, what percent of capacity would you envision pointed at Europe in the fourth quarter? And then how do we think about that balance of growth longer term? So in other words, is it is domestic a priority until you get back to full twenty nineteen levels? Or how should we be thinking about it kind of 2022, 2023, that balance of growth between domestic and Europe?
Speaker 2
Well, I'm gonna deflect that to Scott Duane, even though I could think I could give you a very good answer.
Speaker 9
Thank you.
Speaker 8
Team team sport indeed. So, again, I think if you look at Europe for us, it's gonna be de minimis in terms of the ASMs as a percent of system. It it really is limited. So I think that's the the first thing that I would would lay out there that that, again, in the near future, you're looking at six LRs that are coming in. They just do not produce enough ASMs to be to to really push up the chart.
In terms of domestic versus international, you know, I think the this continues to evolve for us. We were very concerned when we saw the testing come in for international. We've seen, particularly in the Caribbean region, that has recovered nicely. And so as we go forward, I think you're gonna see a balance of growth domestic versus international that has looked kinda like it has historically for us. So, again, we're in the midst of a leisure oriented recovery.
I think that we're built for leisure. We're excited about that. I think that actually plays right into our strengths. And as we allocate growth going forward, I think that mix of domestic and international is going to be what's optimal for us in the short to medium term.
Speaker 9
Maybe if I could sneak one more in. Can you speak to start up costs that you're incurring here, June, September, for the Europe launch? And thanks for taking the questions.
Speaker 8
So again, I think as we, look at this, we went through the crisis. We did not lay people off. I think while we wanna make sure that we're leading the burden and we're as operable as possible, I don't think you're gonna see a significant impact from that as we go forward. And I think, again, as we look at the summer and the fall, we look forward to getting the airplanes up in the air and doing so in a way that has our customers happy.
Speaker 7
Thank you.
Speaker 0
Your next question is from Catherine O'Brien from Goldman Sachs. Your line is open.
Speaker 13
Good morning, everyone. Thanks for the time. So maybe first, a question for Joanna just about the RASM drivers you've laid out. Completely understand you'll need to wait to give more details on the co brand agreement until the contract is finalized. But just high level, should we think about that as the largest of the three RASM drivers, so so versus the additional fare option uptick and the JetBlue travel products impact?
Speaker 1
Thanks. Great question.
Speaker 4
Sorry. My mic was off. Apologies. Thanks. Great question.
So I I would you know, we're we're gonna go out with firm numbers as we start seeing a more stable revenue environment. Clearly, the cobrand card is a significant contributor. Fare Options one point zero or 2.1, we've already communicated is one point of unit revenue. And then some of the work in the Travel Products world, we're calling about 100 EBIT based upon what we said in twenty eighteen investor meetings. And so that is on track, and we're optimistic that we're going to hit those numbers.
I would not underestimate the contribution of the American Airlines NEA agreement or frankly, some of the smaller initiatives, the three thirty one schedule changes or the new revenue management changes. So overall, we're encouraged by the momentum behind these initiatives. They're unique to JetBlue. We'll be prepared to give greater detail in the coming months as the revenue environment stabilizes. Co brand is a significant contributor in line with, you know, some of the other larger initiatives.
Speaker 13
Okay. Got it. And then maybe second question for Steve. So you guys noted that, you know, the first priority for cash flow when it turns positive is is paying down high cost debt. Can you talk about what opportunities you have to delever over the next couple of years, maybe both through scheduled payments or any opportunities to prepay debt?
And then just how do think about pacing those opportunities?
Speaker 3
Katie, it's a good question. We've been very measured and strategic as we've gone through the last sort of twelve to fifteen months of going through. And not only have we had an eye on bringing liquidity and cash into JetBlue, but based on the facilities that we have used to bring cash into JetBlue, we thought very much in terms of not only rate, but sort of tenure as well as we've gone through it. So we do have a number of opportunities, based on how we go forward. I mean, I'm delighted that we're generating positive cash from ops in March, and going forward in that good position.
We, we obviously have the PSP two top up and PS three p three coming. And so we are gonna take, every opportunity to pay down the debt and ultimately reduce the weighted average cost of debt. Coming into the pandemic, our weighted average cost of debt was in the high threes. It's sitting around four now. And as I mentioned in my prepared comments, we expect our weighted average cost of debt over the forthcoming months to actually be at a a level that's lower than where it was coming the pandemic.
So I feel not only incredibly comfortable with where our liquidity sits, and the strength of balance sheet, but also in terms of driving down, financing costs as JetBlue, goes forward.
Speaker 0
Okay. Thank you. Your next question is from Ravi Shanker from Morgan Stanley. Your line is open.
Speaker 14
Thanks. Good morning, everyone. Joanne, if I can just follow-up on previous response on RASM. Completely appreciate that the current environment is really messy. But given the initiatives you have with international and ventures and then the co bank card and everything else, kind of much like the detail you've given us on the CASM side in terms of thinking about 2022 rates in 2019.
Can you comment or can do you have really good confidence that 2022 RASM can be comfortably above 2019 given those idiosyncratic advantages that you have?
Speaker 4
Yes. So good question. We're not in a position right now specifically to the revenue initiatives to break out exactly where they are. As we said, we'll do that at a later date. What I would say about 2022, however, is we are encouraged by what we're seeing this summer.
And if we believe that carries into the fall and into the winter, we are optimistic that 2022 has the potential to be a strong recovery year. Leisure has led the recovery. We believe there's still pent up demand for travel that will carry into the fall. If you look at GDP growth in 2022 versus 2019, it's four points higher. Frankly, we think travelers have extra savings.
And with the access to the vaccine, there'll be additional locations opening up. You add that to our series of revenue initiatives, and we think that 2022 could be a strong recovery year. The other piece I'll mention is if you think about JetBlue and how we're positioned, a trusted brand, unbelievable crew members committed to our success, a great product, largely domestic leisure with a history of serving these markets. It's what we do, coastal markets, our network. We think this is going to serve us very well for our recovery year.
Speaker 14
Got it. Thank you. And maybe as a follow-up, kind of a longer term question on the venture side. Obviously, you are a leader in kind of investing in SAF and committing to using that for your ESG targets. But the hydrogen investment was pretty interesting and kind of caught my eye.
Can you shed a little more light on kind of what are you thinking there and kind of how you think hydrogen fits into your long term fuel plants?
Speaker 2
Great question, Ravi. I'll take that. I'll try and be brief because I could talk about this topic for hours. You know, I think, certainly JetBlue takes a view that the sustainability of our industry as we come out of the pandemic will be an extremely critical topic and something that we need to, demonstrate a real continued commitment to reduce our carbon emissions in order to continue to earn the right to grow. So over the short to medium term, we're very focused on areas like sustainable aviation fuel, continuing to try to work with the US government on more efficient air traffic control procedures.
As you know, JetBlue is investing billions of dollars in more fuel efficient airplanes. We are aggressively replacing our ground equipment with much greener electric ground equipment. But for airlines to reach some of the longer term aspirations around zero net carbon and do it in a way that doesn't rely on offsets, which we clearly just view as a bridging strategy, we have to consider alternative types of aviation alternative ways of powering aviation. So we stay close to the electric airplane industry. I think we will recognize that that's, I think over at least over the next couple of decades, gonna be confined to smaller airplanes over shorter distances.
But, you know, we're intrigued. Airbus has made similar comments as well about the ability for hydrogen to provide a sort of a longer term cleaner fuel option. And so this is why we have our TechVentures subsidiary. It allows us to get smarter on these things and we have a real focus at JTV at the moment on considering investments in the sustainable aviation space.
Speaker 14
Great. Thank you.
Speaker 0
Your next question is from Hunter Keay from Wolfe Research. How
Speaker 15
are you guys thinking about the fall after kids get back into school? Obviously, not looking for any revenue or capacity guidance or anything like that. But how do you think about a good case scenario and a bad case scenario in terms of just sort of how your consumers behave?
Speaker 4
Yeah. Thanks, Hunter. I'll take it, and then I'll let Dave Clark add some color. So I think we're still in a pandemic, and so we're very mindful of that. While we are, as we've said, encouraged by what we're seeing stepping into the summer, We also don't know what we don't know.
And so that's sort of at the heart of our comments around remaining nimble and flexible with how we manage capacity stepping into the fall time frame. We do believe, based upon what we're seeing, that there will continue to be pent up leisure demand. Dave will get into a bit on what we're seeing on the corporate side. But we're cautiously optimistic that assuming there aren't any increase in travel restrictions, that the vaccine continues to take a hold, that case counts, you know, stabilize or or or come down, that the fall has the potential to be to be be good for JetBlue. It's obviously a trough period historically for us.
You know, as we think about the holidays and customers that have not had a chance to visit their families over the Christmas, Hanukkah, holidays, Thanksgiving, we think that has a opportunity to be, a very strong, strong period for us. Dave, do you wanna add some color on the corporate side?
Speaker 7
Sure. Thanks, Joanna. And and I agree. I think the fall is actually the the trickiest period of forecasting right now. We we know leisure is holding up well, but the leisure demand base in general in the fall is lowest, compared to any other time of the year.
So the real question is how quickly will business and corporate ramp back up? Just we've been seeing good growth in these areas, but off a quite low base. Early in in January, our our year over two corporate travel is still down about 95%. It's been improving. We're now about minus 80% or so in terms of bookings.
So good improvement, but off a low base. As we stay close and talk with our our largest customers, we do expect to see, you know, a phased approach, as they go through the summer, especially returning to office in late summer and early fall, and they expect to really accelerate travel in the September, October time frame. But exactly when that occurs and how robustly it comes back is something that we're still looking at very closely as we think about fall revenue and capacity.
Speaker 15
All right. And then Steve, just to flush out the cost commentary a little more for 2022, you think about CASM. On your P and L, as you guys report it, which do you think which single line item on a unit cost basis has the best prospects of being below 2019? And which one you think is going to be the toughest?
Speaker 3
Thanks, Hunter. Good morning. I think the toughest and the one that we're keeping the the closest control on it, the closest focus on, should I say, is really around rent and landing fees because that has continued to be one of, the headwinds, for the industry, and I've I've I've mentioned that specifically. So we'll have to see how that evolves. I think from a positive standpoint, I would suggest distribution.
I think the, the commercial team has done some tremendous work over the last few years in terms of driving our direct strategy, also looking through the lens of the business partners in terms of how we think about cost of sale, not only in terms of sales, but also servicing for our customers, and really using automation and driving our direct proposition. So on the on the negative side and the pressure side, it will rental lending fees. On the positive side, it will be our cost of sales distribution.
Speaker 7
Your
Speaker 0
next question is from Andrew Didoro from Bank of America.
Speaker 11
Steve, just in terms of your 30% to 40% debt to capital, what time frame do you think you can achieve that in? And more importantly, do you think this is a goal that you can get to organically? Or do you think there needs to be some other form of capital raise to get there?
Speaker 3
Andrew. Good morning and great question. So we've briefly talked about this. I'm I'm really, again, very pleased and delighted that we started generating positive cash from operations in March. And, also, we've sort of taken the momentum as we've gone through this and been very appreciative of the administration for the support they've given the industry.
We've always said that we we expect it to be between the 2023 year and the 2024 year. That's when we're sort of thinking about getting back into that situation. We came into the pandemic with the second strongest balance sheet in the industry. We continue to be in that place. We we continue I mean, we'll we'll we'll see how things evolve, but I would anticipate based on generating positive cash from ops, sort of going through the position that we've been through.
I've been happy with the market transactions we've, we've done. I expect this to be through organic means, but, you know, I won't get ahead of myself, and and, 2023, 2024 is quite a a way off. But that's our current working and planning assumption at the moment.
Speaker 11
Great. Thank you. And then just, my second, just a quick follow-up. Apologies if I missed this, but just your comments on getting back to 2019 or better CASM levels in 2022. Have you said what level of capacity you're assuming, next year relative to 2019?
Speaker 3
Thanks. Yes. So it's it's back at sort of, levels of capacity. So that's the sort of level that we talked about. 2019.
Okay.
Speaker 11
Thank you.
Speaker 3
We said twenty o nine, but Oh, sorry. 2019.
Speaker 11
Understood. Thank you.
Speaker 3
It must be the it must be the British accent. Apologies for that.
Speaker 0
Your next question is from Mike Linenberg from Deutsche Bank. Line is open.
Speaker 16
Good morning, everyone. Joanna, you brought this up and maybe you or Dave just about the move to three thirty one days in the booking window. What was it before? And presumably, this is graduations, weddings, family reunions, maybe people who book cruises out nine, ten months, a less price sensitive segment. Is that that's the pickup there?
Is there something else related?
Speaker 7
Hi, Mike. This is Dave Clark. I'll take that one. Previously, we're selling between seven to ten months of schedule sort of on a seasonal block basis. Now we're we're consistently at two hundred and thirty one days.
And and you're right on the the type of traffic that books ten, eleven months in advance. These are big events, either family events, big milestones, things where the trip and getting the the reservation booked important, getting it booked ahead of time is the most important part to the customer. So we're happy to be able to take more of that traffic, put some revenue on earlier in the booking curve. And, generally, yes, it it's not as price sensitive as closer in traffic.
Speaker 16
Dave, have you thought I know there's at least one carrier I can think of that's now gone beyond the 331. And with the cruise industry saying that people are now booking out more than a year, have you and because you guys are big in Fort Lauderdale, have you thought about actually extending it for that type of passenger, or is it just it just too far out?
Speaker 7
I think for now, we're really pleased with where we are. It's only been a couple months, and the initial results are good.
Speaker 2
So we'll keep our eyes open in
Speaker 7
the future, but, no short term plans.
Speaker 16
Okay. And then just a quick follow-up on the fleet. I think, it was mentioned that this summer, you'll only have 10 aircraft in storage. But if we look at the fleet that's operating through the summer, how does the utilization compare versus what it was back in 2019? I mean, if you have sort of a block hour per day 2021 versus 2019.
Thank you.
Speaker 4
Yeah. Thanks thanks for the question. So we're slightly below 2019 levels at this point. We expect them to approach closer to 2019 as we step into the summertime from a little bit a little bit lower, but but getting getting back there.
Speaker 16
Okay. Great. Thanks, Joanna. Thanks, Steve.
Speaker 0
Your next question is from Myles Walton from UBS. Your line is open.
Speaker 7
Thanks. Good morning.
Speaker 11
I was wondering if you could comment in the context of the down 15% capacity and down 30% to 35% year over two, what LatAmCaribbean looks like versus 'nineteen. I imagine those are probably trending above 'nineteen levels. If you think you know, you're disproportionately benefiting from lockdowns elsewhere in the world, if, you know, these kind of gains become, you know, more sustainable on a go forward basis in in leisure destinations that you currently serve.
Speaker 7
Hi, Miles. This is Dave Clark. I'll take that one. The Latin Caribbean region's been at the very top end of our strong performing regions, both from a revenue and a capacity standpoint. If you look ahead at our selling schedule, we actually have capacity to that region up year over two in July and August, reflecting the strong demand and performance there.
Okay. And then could you be a
Speaker 11
little bit more specific on the PSP three cash that you're going to get in this current quarter, Steve? Thanks.
Speaker 3
Yes. So thanks for sort of the administration. If you think about it from a U. S. Industry standpoint, PSP2 was around $15,000,000,000 p three is, 14,000,000,000 for the industry.
So you're sort of talking low nineties percent, versus the p s PSP two numbers. So should be in the ballpark for JetBlue around $500,000,000. And, obviously, there's a blend there's a blend of grants and loans embedded in that. Yep.
Speaker 0
Our last question is from Dan Kenzy from Seaport Global. Your line is open.
Speaker 17
For squeezing me in here. Couple of questions. You know, I appreciate, you know, the corporate demand is pretty depressed right now. But, you know, regarding the relationship with American, are there any examples of accounts that, you know, you've already talked to jointly and, you know, whether or not you seen any corporate wins. And so I guess I'm just trying to get some perspective on are these smaller Fortune accounts?
Are they, say, Fortune 100 accounts, the bigger ones? And just related to that, what is the cumulative collective corporate spend that you've been blocked from historically that you could potentially tap into for the first time?
Speaker 11
So this is Scott.
Speaker 8
I will say that we're early enough that we're still sort of working through the process to to handle joint sales. And, again, I think that the goal here is to make sure that we're providing competition, in our case, fares and a great experience to customers in the NEA market. So I think it's something we're going to be rolling out here in short term, and we look forward to working jointly with our partner on that. And I think, again, providing appropriate competition in a number of the markets, particularly in New York that we haven't played in previously.
Speaker 17
And that collective spend, is it, you know, 10,000,000,000, 15,000,000,000 potentially that you could you know, the the wallet you're looking to tap into?
Speaker 8
So we're kinda looking at each other here. I think we'll we'll follow-up on that. I don't have a good answer for you.
Speaker 17
Okay. Second question here, you know, the new flying in the first quarter, I think it was 15% of the total flying. What percent of that flying was in support of the new American partnership? And what percent of the overall network does the, the American relationship cover?
Speaker 8
So the relationship itself covers, you know, about 66% of our network, which touches sort of the the NEA airports, and that that number has has grown a little bit as we've, you know, as as we move forward. So you're gonna see as as we're able to enter LaGuardia based upon the the NEA, you know, that that number comes up a bit. So, you know, a big chunk of what we added was either added associated with the NEA or in anticipation of the NEA. So a number of the markets we're able to provide competition, whether that's in Newark with the dominant carrier there, at LaGuardia with the dominant carrier there. I think, you know, what we're we're doing is sort of enjoying the benefits of of breaking up a number of monopolies here.
And I think that's, you know, that's something that that can work for us as we're playing the role of of of disruptor.
Speaker 17
Very good. Thanks.
Speaker 1
And that concludes our first quarter twenty twenty one conference call. Thank you all for joining us this morning, and we hope you all have a great day.
Speaker 0
And again, that will conclude today's conference. Thank you for your participation.