JetBlue Airways Corporation · NASDAQ:JBLU
JetBlue Airways — Q1 2017 Earnings Presentation
18 slides from JetBlue Airways's earnings presentation, Apr 25, 2017
Slide 1: 1Q 2017 Earnings Presentation
1 1Q 2017 EARNINGS PRESENTATION APRIL 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: 1Q 2017 Earnings Update
1Q 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 • Working towards goal of superior margins • Executing on a series of commercial and cost initiatives through 2020 • Tactical capacity and revenue initiatives launched in February are improving RASM performance •
Slide 5: 1Q 2017 Overview
5 1Q 2017 OVERVIEW Structural cost initiatives Commercial initiatives Targeted growth ACHIEVEMENTS • Revenue and capacity initiatives delivering results • 2Q 2017 RASM showing sequential improvement beyond calendar benefit • CFO selection highlights commitment to cost initiatives • Have ~$100m of $2
Slide 6: Commercial Update & Outlook
COMMERCIAL UPDATE & OUTLOOK MARTY ST. GEORGE EVP COMMERCIAL AND PLANNING
Slide 7: Capacity: Balancing Growth with Returns
7 CAPACITY: BALANCING GROWTH WITH RETURNS • Summer capacity growth focused on Boston, Fort Lauderdale and New York • 15 new markets in 2Q17; 2 new markets in Boston; 8 new markets in Fort Lauderdale • Tactical capacity adjustments helping reverse early 2017 RASM trends • Reduced planned capacity in
Slide 8: Network Update: Boston and Mint Continue to Outperform
8 NETWORK UPDATE: BOSTON AND MINT CONTINUE TO OUTPERFORM New York Fort Lauderdale Boston Other Mint FOCUS CITY / OTHER KEY DEVELOPMENTS • Competitive environment in Newark/NYC to Florida • Expect limited impact from competitive Transcon capacity in Newark • Highest margin focus city; building breadt
Slide 9: Unit Revenue: Actions Driving Sequential Improvement
9 UNIT REVENUE: ACTIONS DRIVING SEQUENTIAL IMPROVEMENT • 1Q RASM negatively impacted by over 3 points from calendar impacts • 2.3 point negative impact to 1Q from Easter; 1 point negative impact to 1Q from January calendar • Weather events net to 0.25 points headwind • Sequential improvement continu
Slide 10: Financial Update & Outlook
FINANCIAL UPDATE & OUTLOOK STEVE PRIEST EVP CHIEF FINANCIAL OFFICER
Slide 11: 1Q 2017 Results
11 1Q 2017 RESULTS INCOME STATEMENT ($billion) PRE-TAX PROFIT MARGIN Positive calendar impact in 1Q 2016 UNIT REVENUES AND COSTS ($ cents) 3 .1 % 1 6 .6 % 2 1 .6 % 9 .2 % 0 .5 % 1 4 .6 % 2 0 .0 % 7 .9 % 0 .3 % 9 .0 % 1 2 .8 % 5 .3 % 1Q 2014 1Q 2015 1Q 2016 1Q 2017 OM Pre-Tax Margin Net Margin Operat
Slide 12: Unit Costs: Managing Near Term Headwinds
12 UNIT COSTS: MANAGING NEAR TERM HEADWINDS • 1Q CASM ex-fuel below mid-point of guidance, despite weather impacts • Weather impacted CASM-ex fuel by 0.5 points • Inflationary pressures in maintenance and labor • 2Q CASM ex-fuel expected to be peak of 2017 growth pressures • No change to 2017 cost g
Slide 13: Cost Control: The Path from Good to Great Margins
13 COST CONTROL: THE PATH FROM GOOD TO GREAT MARGINS Tech Ops Airports Corporate TOTAL Distribution STRUCTURAL COST SAVINGS PLAN (2018-2020) ACHIEVEMENTS $250-$300m • 6 airport lobbies completed • 12 expected by year-end $100-$125m $75-$90m $55-$65m ~$20m • Approximately 1/3 of cost effort is ‘work
Slide 14: Fleet: Return Accretive Fleet Growth
14 FLEET: RETURN ACCRETIVE FLEET GROWTH AIRBUS ORDER BOOK*FLEET DETAIL* Mint 60 130 37 60 130 40 60 130 52 E190 A320 A321 2016 1Q 2017 2017E 19 3117 *As of 4/25/17 CEO: Current Engine Option NEO: New Engine Option Recent Changes: • Deferring 8 aircraft from 2019 to 2023 and 5 aircraft from 2020 to 2
Slide 15: Leverage and Capex: Balanced Capital Allocation
15 2Q 2017 2017E 2017-2020E LEVERAGE AND CAPEX: BALANCED CAPITAL ALLOCATION ADJUSTED DEBT / CAP RATIO CAPITAL EXPENDITURES Aircraft Non-Aircraft 70% 62% 46% 35% 34% 2011 2013 2015 2016 1Q 2017 Adj Debt / Cap = On Balance Sheet Debt + 7x Aircraft Rent / Debt + Equity $150m - $200m $1.05bn - $1.2bn $2
Slide 16: 2017 Guidance Summary
16 2017 GUIDANCE SUMMARY Metric 2Q 2017E 2017E Capacity 4.0 - 6.0% 5.5 - 7.5% RASM 3.0 – 6.0% N/A CASM Excluding Fuel 4.5 - 6.5% 1.5 - 3.5% All-in Fuel Price $1.73 N/A Capex (aircraft) $220m – $270m $1.05bn – $1.2bn Capex (non-aircraft) $35m – $45m $150m – $200m Other Income/(Expense) ($20m - $25m)
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