Jetblue Airways Corporation · NASDAQ:JBLU
Jetblue Airways — Q1 2018 Earnings Presentation
21 slides from Jetblue Airways's earnings presentation, Apr 24, 2018
Slide 1: 1Q 2018 Earnings Presentation
1 1Q 2018 EARNINGS PRESENTATION APRIL 24, 2018
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: 1Q 2018 Earnings Update - Robin Hayes, President & CEO
1Q 2018 EARNINGS UPDATE ROBIN HAYES PRESIDENT & CEO
Slide 4: Working Towards Superior Margins
4 • Maintaining mid-to-high single digit growth • Focusing on up-gauging Boston and New York, and growing Fort Lauderdale • Further developing each Focus City to strengthen relevance PRE-TAX MARGINS JBLU VS PEERS* *Average of peer set (AAL, ALK, DAL, LUV, SAVE, UAL), consensus, guidance and reported
Slide 5: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 6: Focused Growth Supports Margin Commitments
6 FOCUSED GROWTH SUPPORTS MARGIN COMMITMENTS *Flown capacity 6 ASM YOY GROWTH* − RASM growth outperforming system for four consecutive quarters − Network growth continues via added frequencies and destinations − Low completion factor in the Northeast reduced growth below initial capacity guidance ra
Slide 7: Unit Revenue: Driven by Strong Close-in Demand
7 6.1% 1Q 2018 2Q 2018E RASM YOY GROWTH UNIT REVENUE: DRIVEN BY STRONG CLOSE-IN DEMAND • 1Q RASM exceeded expectations, driven by strong close-in peak demand − Close-in leisure drove incremental RASM strength − Solid pricing environment in both Mint and non-Mint transcon − 1.0 point tailwind from we
Slide 8: Solid Unit Revenue Trends Despite Calendar Shifts
8 -7.8% -3.7% 1.1% 2.8% 1H 2016 2H 2016 1H 2017 2H 2017 1H 2018E RASM YOY GROWTH SOLID UNIT REVENUE TRENDS DESPITE CALENDAR SHIFTS • 1H 2018 RASM growth between 1.5% and 3.0% − 1Q to 2Q calendar shift masks underlying positive unit revenue trends year over year − Margin-accretive revenue initiatives
Slide 9: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 10: 1Q 2018 Results
10 11.79 12.50 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2018 RESULTS CASM EX-FUEL* PRE TAX MARGIN EARNINGS PER SHARE • Solid revenue growth driven by close-in leisure demand • Growing ancillary revenues • Pressure from lower completion factor (weather) • Positive impact of shift of maintenance expenses •
Slide 11: Unit Costs: Managing Headwinds to Achieve Goals
11 CASM EX-FUEL YOY GROWTH* UNIT COSTS: MANAGING HEADWINDS TO ACHIEVE GOALS • 1Q CASM ex-fuel at the mid-point of initial guidance − Lower completion factor from a more active winter than normal in the Northeast, resulted in ~one point headwind to CASM ex-fuel − Strong focus on cost management; timi
Slide 12: Expect CASM Ex-Fuel Inflection During 2H 2018
12 4.1% 5.3% 1H 2017 2H 2017 1H 2018 2H 2018 EXPECT CASM EX-FUEL INFLECTION DURING 2H 2018 • CASM ex-fuel growth negative by 2H 2018 − 1H expected to grow between 2.0-4.0%; only material change is lower completion factor in 1Q 2018 − 2H expected to decline 2.0% or more, including storm impact and on
Slide 13: Structural Cost Program Update: Tracking to $250-$300M
13 STRUCTURAL COST PROGRAM UPDATE: TRACKING TO $250-$300M 13 Renegotiating sourcing and IT contracts Maximizing data storage infrastructure, software utilization Enabling Customer support tools to increase service efficiency Re-negotiating distribution contracts to minimize transaction costs
Slide 14: Capex: Accretive Fleet Growth and Reinvestment
14 2Q 2018E 2018E 2017-2020E CAPEX: ACCRETIVE FLEET GROWTH AND REINVESTMENT Year A320neo A3 1ceo A321neo Total 2018 - - 10 2019 - - 13 13 2020 6 - 7 13 ~$1.1b 60 60 60 60 130 130 130 130 21 21 23 28 32 34 34 35 2017 1Q 2018 2Q 2018E 2018E E190 A320 A321 HD A321 Mint 243 245 253 247 FLEET CAPITAL EXP
Slide 15: Capital Allocation Priorities
15 1,422 267 1,120 202 367 CAPITAL ALLOCATION PRIORITIES 15 General Guidelines • Maintain investment grade financial metrics • Balanced approach to growth, reinvestment and capital return to shareholders • Support EPS growth via share repurchases Priorities • Investments in fleet to support organic
Slide 16: 2018 Guide Summary
16 2018 GUIDE SUMMARY CAPACITY 2Q 2018 FY 2018 5.0 – 7.0% 6.5 – 8.5% RASM 2Q 2018 FY 2018 (3.0) – 0.0% N/A CASM EX-FUEL 2Q 2018 FY 2018 2.0 – 4.0% (1.0) – 1.0% ALL-IN FUEL PRICE 2Q 2018 FY 2018 $2.23 / gal N/A CAPEX AIRCRAFT 2Q 2018 FY 2018 $190 - 225m $750 – 900m CAPEX NON-AIRCRAFT 2Q 2018 FY 2018
Slide 17: Slide 17
Slide 18: Appendix A: 1Q 2018 Financial Results
18 APPENDIX A: 1Q 2018 FINANCIAL RESULTS US$ millions 1Q 2018 1Q 2017 Var % Total Operating Revenues 1,754 1,600 9.6 Aircraft fuel and related taxes 417 323 29.2 Salaries, wages and benefits 499 466 7.0 Landing fees and other rents 100 95 4.4 Depreciation and amortization 117 105 11.7 Aircraft rent
Slide 19: Appendix B: Other Non-Airline Operating Expenses
19 APPENDIX B: OTHER NON-AIRLINE OPERATING EXPENSES (JBTP/JTV EXPENSES, $m) $8 $9 $9 $9 $9 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018E 2017 2018E $36 $35 - $45 $9 – $14
Slide 20: Appendix C: Relevant JetBlue Materials
20 APPENDIX C: RELEVANT JETBLUE MATERIALS Investor Presentations http://blueir.investproductions.com/investor-relations/events-and-presentations/presentations Earnings Releases http://blueir.investproductions.com/investor-relations/financial-information/quarterly-results Annual Reports http://blueir
Slide 21: Appendix D: Note on Non-GAAP Financial Measures
21 APPENDIX D: 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 businesses (CASM Ex-Fuel) is a non-GAAP financial measure that we use to measure our core performance. Note A w