Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q2 2017 Earnings Presentation
18 slides from Jetblue Airways's earnings presentation, Jul 25, 2017
Slide 1: 2Q 2017 Earnings Presentation
1 2Q 2017 EARNINGS PRESENTATION JULY 25, 2017
Slide 2: Safe Harbor
2 SAFE HARBOR This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exc
Slide 3: 2Q 2017 Earnings Update
2Q 2017 EARNINGS UPDATE ROBIN HAYES PRESIDENT & CEO
Slide 4: Focused on Creating Shareholder Value Through Margin Initiatives and Accretive Growth
4 FOCUSED ON CREATING SHAREHOLDER VALUE THROUGH MARGIN INITIATIVES AND ACCRETIVE GROWTH PRE-TAX MARGINS JBLU VS PEERS Average of peer set (AAL, ALK, DAL, LUV, SAVE, UAL) 18.0% 17.5% 15.6% 14.1% 18.3% 16.1% 2Q 2017 JBLU 2Q 2017 Peers TTM JBLU TTM Peers 2016 JBLU 2016 Peers • Working to sustain above
Slide 5: 2Q 2017 Highlights
5 2Q 2017 HIGHLIGHTS Structural cost initiatives Commercial initiatives Targeted growth STRATEGIC POSITIONING AND RESULTS • Early 2017 revenue and capacity initiatives exceeding expectations in 2Q/3Q • Over 20% YoY RASM improvement in Ft. Lauderdale Mint markets • Achieved $45m in annualized savings
Slide 6: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 7: Capacity: Managing Operations and Growth
7 ASM YOY GROWTH 8.9% 4.2% 4.8% 2016 2017E* 2017E 1Q 2017 2Q 2017 3Q 2017E CAPACITY: MANAGING OPERATIONS AND GROWTH 6.5% - 8.5% 6.5% - 7.5% 5.5% - 6.5% * Guidance as of 1/26/17 • Modest reduction in 2017 capacity guidance to support the operation and margin commitments • 2H17 growth targeted to Bost
Slide 8: Network Update: Boston and Mint Continue to Outperform
8 NETWORK UPDATE: BOSTON AND MINT CONTINUE TO OUTPERFORM New York Ft. Lauderdale Boston Other Mint FOCUS CITY / OTHER KEY DEVELOPMENTS IN 2Q 2017 • Increasing capacity through up-gauging • Competitive environment continues in Newark/NYC to Florida • Reaping benefits of point-to-point strategy in exc
Slide 9: Unit Revenue: Solid Underlying Demand into 3Q 2017
9 RASM YOY GROWTH -7.0% -8.2% -3.5% -1.5% -4.8% 7.0% 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017E UNIT REVENUE: SOLID UNDERLYING DEMAND INTO 3Q 2017 • 2Q RASM impacted by holiday placement • 2.5 point benefit to 2Q from Easter/July 4th • 1.25 point benefit from lower completion factor an
Slide 10: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 11: 2Q 2017 Results
11 2Q 2017 RESULTS INCOME STATEMENT ($billion) PRE-TAX PROFIT MARGINUNIT REVENUES AND COSTS ($ cents) 9 .4 % 1 7 .5 % 1 9 .1 % 1 9 .2 % 6 .9 % 1 5 .5 % 1 7 .6 % 1 8 .0 % 4 .1 % 9 .4 % 1 1 .0 % 1 1 .4 % 2Q 2014 2Q 2015 2Q 2016 2Q 2017 OM Pre-Tax Margin Net Margin **2Q 2014 figures exclude gain on sal
Slide 12: Unit Costs: Managing Near Term Headwinds
12 QUARTERLY CASM EX-FUEL YOY GROWTH* -1.4% -0.8% 2.5% 4.6% 3.3% 5.1% 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017E 2017E UNIT COSTS: MANAGING NEAR TERM HEADWINDS • 2Q CASM ex-fuel below mid-point of guidance, despite lower completion factor • Inflationary pressures in maintenance and lab
Slide 13: Structural Cost Program Update
13 STRUCTURAL COST PROGRAM UPDATE CATEGORY SAVINGS OPPORTUNITY COMPLETED + WORK IN PROGRESS ADDITIONAL DETAILS Tech Ops $100 – $125M Evaluate current and new maintenance agreements terms Optimize heavy maintenance and spare parts inventory via new technology Corporate $75 – $90M Achieved $13M in 202
Slide 14: Fleet: Return Accretive Fleet Growth
14 FLEET: RETURN ACCRETIVE FLEET GROWTH AIRBUS ORDER BOOK*FLEET DETAIL* *As of 7/25/17 CEO: Current Engine Option; NEO: New Engine Option • Flexibility in order book allows for selecting most margin- accretive configuration • Expect a mix of Mint/200-seat deliveries in 2018 *As of 7/25/17 60 60 60 6
Slide 15: Leverage and Capex: Balanced Capital Allocation
15 3Q 2017E 2017E 2017-2020E LEVERAGE AND CAPEX: BALANCED CAPITAL ALLOCATION ADJUSTED DEBT / CAP RATIO CAPITAL EXPENDITURES Aircraft Non-Aircraft Adj Debt / Cap = On Balance Sheet Debt + 7x Aircraft Rent / Debt + Equity $150m - $175m $1.05bn - $1.15bn $195m - $245m $50m - $75m Average of ~$1.1bn* *I
Slide 16: 2017 Guidance Summary
16 2017 GUIDANCE SUMMARY Metric 3Q 2017E 2017E Capacity 6.5 – 7.5% 5.5 - 6.5% RASM (0.5) – 2.5% N/A CASM Excluding Fuel 1.5 - 3.5% 2.0 - 3.5% All-in Fuel Price $1.61 N/A Capex (aircraft) $195m – $245m $1.05bn – $1.15bn Capex (non-aircraft) $50m – $75m $150m – $175m Other Income/(Expense) ($20m - $25
Slide 17: Questions
QUESTIONS
Slide 18: Appendix A: Note on Non-GAAP Financial Measures
18 APPENDIX A: NOTE ON NON-GAAP FINANCIAL MEASURES Consolidated operating cost per available seat mile, excludes fuel and related taxes, and operating expenses related to other non-airline expenses (CASM Ex-Fuel) is a non-GAAP financial measure that we use to measure our core performance. Note A wit